How to Budget when Your Paycheck is Never the Same

By: Amber Moore

 

So you’ve tried budgeting in the past, but with your fluctuating paycheck, it made planning your spending too hard. Maybe you gave up or maybe you are still struggling to make a budget work.

I will show you how and make it easy to get your spending plan together!

Don’t have a fluctuating paycheck? If you have a pretty steady income where you are pretty certain of the base amount each payday, then check out “Creating Your First Budget (Made Easy)“.

First of all, I’d like to say “You are awesome!” The fact that you realize that you need some sort of plan for the money you make means that you are making some great steps toward financial freedom!

When you work sales or seasonal jobs and the pay is never the same, budgeting can seem impossible! It’s not, I promise you!

Commission Based

  1. We have to come up with a “base” amount of income to budget. So, if you work on commissions write down the lowest amount you’ve received on a check maybe in the last 6 months or year. This will be your base income.CommissionsBudgetIncome
  2. Start writing out your expenses, beginning with your tithing and savings. (You will keep adding these things into your budget until you reach your base income amount.) Then move onto your basic needs (necessary clothing, housing costs, food, and transportation). Next add in any other payments or utilities you have: personal loans, internet, cable, phone, credit cards, etc.). Finally add in any personal expenses you know you spend: eating out, hygiene, entertainment, health/beauty, gym memberships, etc.CommissionsBudgetBaseExpenses
  3. Once you reach your base amount, which may come as soon as you’ve covered your basic needs, then you start a running list in order of priority of the things you will pay next. See picture below. In this example, even though its likely we could never make it all the way through the list, we want it that way. CommissionsBudgetRunningExpenses
  4. Once you get paid, you go down the list and put money toward that budget item until you run out of money. In the example below, you can see we ran out of money before fully funding the emergency fund, so we adjust that number so that we still come out to a zero-based budget.CommissionsBudgetFinal

 

Seasonal Workers

  1. If you only get paid 9 months out of the year, those other 3 months can be a struggle. start by taking your yearly income and divide by 12 to give a base monthly income. If you made $60,000 last year, then your monthly income on your budget should reflect $5,000. In the example below, we use a base income of $4,000 per month (or $48,000 per year) for every month. Because you only get paid or work part of the year, your actual pay may be higher or as low as $0. But you always budget your base which is $4,000.vSeasonalStart
  2. Start writing out your expenses, beginning with your tithing and savings. (You will keep adding these things into your budget until you reach your base income amount.) Then move onto your basic needs (necessary clothing, housing costs, food, and transportation). Next add in any other payments or utilities you have: personal loans, internet, cable, phone, credit cards, etc.). Finally add in any personal expenses you know you spend: eating out, hygiene, entertainment, health/beauty, gym memberships, etc.SeasonalFinal
  3. If you reach your base income amount and there are still items that need to go into the budget then you will have to look at what you can cut out or reduce. Things you can cut: cable, gym memberships, haircuts, eating out, entertainment, etc. Things you can reduce: grocery budget (check out “How to Cut Your Grocery Bill in 1/2“, clothing fund, phone (lower data plan), etc.
  4. Once you have your budget built around your base income number and come out in the black, then you are ready to start using it! When you get paid it will be more than your amount listed. The difference should be put into a savings account that will act as your paycheck when those off months roll around. So during your off season, you will pull that monthly base amount from your savings account to live off of.

 

Remember, Rome wasn’t built in a day and you will find that you are wrong somewhere in your budget (either over or under). That’s okay. Once you start tracking your spending, you can adjust your numbers and each month there will be less and less adjusting to do.

Have that pen and paper budget down and looking to upgrade? Consider making your own in excel or using an app like HomeBudget, YNAB, or Everydollar.

Have a personal testimony on how budgeting has made a difference for you or your family? Leave it as a comment below!

img_6400As someone who always made people ask, “How does she do it?”, I had to learn how to fit more into my day without completely losing my mind. Now I’m excited to share how I did that and what I’ve learned with everyone else. I just want to see people able to live the life they want, doing the things they want, without the stress they think is normal. I want everyone to experience Peace of Time.

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