Irregular Income, Steady Plan: How to Budget on a Fluctuating Paycheck

How Should I Budget For Irregular Income?

Money that shows up in waves doesn’t have to create a life lived on edge. We break down a steady, practical system for freelancers, gig workers, and commission-based pros to turn unpredictable income into a clear plan. Starting with your real monthly floor, we show how to map baseline expenses from a few months of statements, then size an emergency runway around your actual gap between gigs. You’ll learn how to use strong months to prepay lumpy bills, lower your monthly burn, and stash surplus in a side account so you don’t see it—and don’t spend it.

We also compare budgeting tools and explain why hands-on beats hands-off when your income fluctuates. A weekly money date, simple categories, and honest reconciliation build awareness that apps alone can’t teach. We cover practical anchors like keeping housing under control even in tight markets, setting aside taxes at the source if you’re 1099, and using a simple order of operations for surplus: taxes and runway first, lumpy expenses next, then investments, and only then lifestyle upgrades. The goal is a calm, repeatable process that works when income spikes and when it stalls.

Mindset makes it stick. We connect spending to core values so your choices feel meaningful, not restrictive. Short, reachable goals beat vague dreams, and visual cues—like placing a photo of your target on your card—help you pause before a swipe. If you’re tired of moving the goalposts on your budget, this conversation gives you a playbook: fixed baselines, flexible choices, and cues that keep you on track without white-knuckling it.

If this helped you breathe a little easier about your money, follow the show, share it with a friend who rides the income roller coaster, and leave a quick review so more listeners can find these tools.

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Episode Transcript

SPEAKER_01 (00:03):
Welcome to My Pocket FP, the podcast where your
wallet finally meets itsfinancial planner and they
actually get along.
Join your host, Jason Taylor,Certified Financial Planner,
Money Mentor, and your Guide toFinancial Freedom.
Whether you're planning forretirement or just trying to

(00:24):
figure out where all your moneywent last weekend, we've got you
covered.
Get ready to take control ofyour financial life with smart
tips, surprising insights, andyes, an app that fits right in
your pocket.
This is My Pocket FP becauseyour future deserves more than
guesswork.

SPEAKER_00 (00:52):
Freelancers, gig workers, and commission-based
pros, this one's for you.
Learn how to stay financiallystable even when your paycheck
isn't predictable.
Welcome back, everyone.
I am Millie M., co-host andproducer back in the studio with
Jason Taylor, certifiedfinancial planner and creator of
My Pocket FP.
How are you doing, Jason?

SPEAKER_02 (01:10):
Doing well.
Thank you, Millie.

SPEAKER_00 (01:12):
Always great being here with you.
This one is for me, actually.
Let's get into it.
How should someone budget forirregular income?

SPEAKER_02 (01:20):
Uh yeah, you know, that's uh pretty broad question,
unfortunately.
So, you know, a lot of thepeople who have, you know, like
commission based, they mighthave like a base income.
Uh that's a good way to start.
I know a lot of the positions,it's base income plus
commissions.
So we'll we'll start with withthat type of work and then we'll
move forward from there.
Um, so those obviously the easyway to do it would just you know

(01:42):
base your expenses off the baseincome would be the easy
solution.
Now, with these type of jobs, itit's when it's the most
important to have that savingsbuilt up, that emergency
savings, because it your incomedoes fluctuate.
Um, and to really you need toreally dive in on your fixed
expenses with any of thosecommission-based, you know,

(02:02):
contract type type of positions.

SPEAKER_00 (02:06):
Okay, so how do you help clients determine what
those baseline expenses are?

SPEAKER_02 (02:11):
There's a couple different ways of doing it.
Um we found that you know, bycollecting people's credit card
statements and bank statements,you know, for a couple months,
we can kind of come up withaverages for each month and
figure out the the base expensesoff that.

SPEAKER_00 (02:27):
Makes sense.
And so what role does a bufferor emergency fund play in
managing that variable income?
You talked about having asavings, how much do you
suggest, and and how does thatwork?

SPEAKER_02 (02:38):
You know, it's once again, it's not a
straightforward answer.
It depends on how marketableyour your skills are.
So if you're you know doingsix-month contracts and it takes
you an average of two or threemonths to get a another gig or
another job or another contractwork, you want that you know,
six to eight months of savingsto cover those months.

(03:00):
Um, but once again, it all goesback to knowing how much you
need each month.

SPEAKER_00 (03:05):
Absolutely.
Having that information andknowing what you need.
How important is paying thingsahead?
I know there were a few timeswhere, you know, I'm a gig-based
worker, commission-based worker,all of that.
So this is right up my alley.
And I just paid my car insuranceoutright.
And just having that one billoff my plate kind of helped me
breathe a little bit easier.
So is that something you suggestpeople do when they have those

(03:28):
good months to go ahead andthings out?

SPEAKER_02 (03:30):
Yeah, no, for sure.
When you have those good months,that's when you, you know, you
you pay those big, you know, youknow, annual insurance bills.
You, you know, I like to tellpeople to hide money from
themselves.
That's another thing to do.
And then when you have all yourmoney in one bank, and then you
have just this side bank that wehave a really good year, you
know, month, year, you hide somemoney in that account for a

(03:52):
rainy day.

SPEAKER_00 (03:54):
That has helped me.
I actually I needed money for aspecific thing, and I just had a
light bulb one day, and I waslike, there's an account over
here, and it's got like athousand dollars in it that I
forgot about.
So I'm I'm really big on hidingmoney from myself.
So, are there budgeting tools orapps like yours that work
especially well for people whohave this fluctuating income?

SPEAKER_02 (04:18):
You know, I always tell people to build something
for themselves.
There's a lot of apps out there.
You know, ours does not dobudget budget specific things.
We just kind of keep track ofsavings and keep track of how
much you spend.
But for actual budgeting, theI'm an old, you know, pen and
napkin type of person.

(04:39):
Um, you know, pencil and paper.
We do, you know, offer uh Excelspreadsheet for clients, but we
find the more hands-on a clientis with our numbers, the more
they really get to know them andthe more real they are.
You know, some of those youknow, budget apps, they're
great, but they don't seem asreal to clients.

SPEAKER_00 (04:58):
I understand that.
I understand that.
So I know we talked about those,those big, those good months
that we have.
Is there a system or apercentage that you would
suggest as far as save, invest,or spend?
Is it 30 30 30?

SPEAKER_02 (05:14):
Or you know, I'm I'm a big fan of the you know, 10%
off the top for charity,regardless of how well you're
doing.
That's always a good place tostart.
After that, it really is itfluctuates.
Um, I definitely try to havemake sure clients don't spend
more than 50% on on housing ifpossible, which it means having

(05:34):
roommates, if it means you know,renting out your basement, um,
things like that.
That's you know, anotherstandard number go by.
Other than that, you know, it'shard to tell because there's
different you know, taxes youhave to withhold depending on
you know what bracket you're in,or you know, whether you're part
W-2 in commission or if you'refull um, you know, 1099 contract

(05:55):
work.

SPEAKER_00 (05:56):
Definitely is a case-by-case um situation.
And as we talked about in aprevious episode, one month your
expenses might be a little bithigher than another month due to
Christmas or birthdays or tripsor things like that.
So everything is just it'salmost like a budget is this
moving thing.
And I know for me, I might saybudget 200 for groceries, and

(06:21):
then once I get to the store,I'll spend 250.
And then instead of instead ofjust sticking with my budget,
I'll just go in the system andchange the number.

SPEAKER_02 (06:31):
Right.

SPEAKER_00 (06:32):
So it's like you can't move the goalpost, you
have to stay within uh those.
Exactly.

SPEAKER_02 (06:36):
It works a lot better that way.

SPEAKER_00 (06:38):
So, lastly, what mindset shifts like that one are
helpful for people navigatingfinancial uncertainty?

SPEAKER_02 (06:47):
So there's there's a couple things we look at.
Um, one is you know, people'score value system.
It can be a real stronghold whenit comes to how they spend their
money.
And a lot of times, you know,people don't realize how they
interreact as far as your corevalues and your the way you
spend money.
Um, so that's a starting pointis to figure out why they're

(07:07):
spending the money how they are.
And then the other thing youknow you can look at is having a
goal that's within reach.
You know, not you know, hey, Iwant to have a mansion someday.
You know, it could be as easy ashey, I want a thousand dollars
in investments by the end ofnext month.
And to have a goal that whenyou're another, you know, one of

(07:31):
the things I do to help clientsis we'll actually put pictures
on credit cards of their goal.
So when they're shopping, theypull out their credit card and
they have a picture of theirdream house.
It makes them say, Oh, maybe Ishouldn't buy that magazine or
that extra pack of gum.

SPEAKER_00 (07:49):
Right.
Sacrifice now for a greater goalin the future and smart
attainable steps.
I think that's me.
I'm just like, I want a milliondollars.
It's like, let's just start with10,000 and then away from there.
Thank you so much for breakingthat down for us, Jason.
We'll see you next time for moresmart money moves.

SPEAKER_02 (08:10):
Thank you, Millie.

SPEAKER_01 (08:15):
Thanks for tuning in to My Pocket FP, where we
believe small monthly changescan make big positive changes in
your financial end game.
If you're ready to level up yourmoney game, head over to
mypocketfp.com and download theapp today.
Your financial planner is nowofficially pocket sized and
doesn't charge by the hour.

(08:36):
Until next time, keep your goalshigh, your debt low, and your
pockets smart.