Living consistently with an inconsistent income

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The following is presented for informational purposes only.

If you’re self-employed, a freelancer, or a sales person working on commission, you’re familiar with the stress that comes with an inconsistent income. Wondering month-to-month if you’ll make enough to cover your bills and stay ahead or if there’s a bill that will need to be pushed to another month. Of course, that will mean you’ll need to make more money that month!

Is there a way to live consistently with an inconsistent income? Yes. But it does take some planning, budgeting, and saving. Here’s what you need to know.

1. Know Your Numbers

You need to know the absolute minimum amount you need to live each month. This includes living expenses like rent/mortgage, utilities, and food as well as other necessities like insurance. Include everything that absolutely has to be paid. Other expenses like gym membership and entertainment can be added later when finances allow.

One thing that should be included as a necessity but often isn’t is a savings account. Especially if you have an inconsistent income, you need an emergency fund for those months when your income level is down.

2. Budget

If you’re not living with a budget, you need to. Create a budget that includes these necessary expenses as well as the things you’d like to add in when you can. Staying on top of your budget will help you stay in control of your finances. You’ll be able to see what you owe and what’s been paid at a glance.

Review your budget at the first of the month so you know what your goal is for that month. Review your budget weekly to see what expenses you can pay and where you are financially. And review again at the end of the month to see where you fell short and what you need to make up.

If you’re not used to budgeting, or the numbers don’t seem to be adding up, remember that you can get free one-on-one budgeting assistance from the counselors at MMI.

3. Live on Last Month’s Income

Work towards living on last month’s income instead of the current month. This will take some planning and saving as you’ll need to have at least one month of your regular income put aside. Use your income from the previous month to plan your spending and saving for the current month. Having enough money in the bank to cover this month’s expenses will reduce some stress and allow you to focus on the future (next month) instead of worrying about the present (this month).

4. Use an App

There are a variety of apps that can help you budget and stay on top of your finances. Mint is a free app that will help you manage your finances in one spot. You can create a budget, track your spending, and even connect your credit and debit cards and your monthly bills. If you need to pay down debt and create some savings, You Need a Budget is the app for you. It has a built-in accountability partner to help you stay on track with your goals. And if tracking your expenses is what matters most, the free Wally app lets you take photos of your receipts and shows you where your money goes based on a variety of categories.

It is possible to live consistently with an inconsistent income, but it does take some work to make sure you don’t fall behind. It’s more important to know where your money is going and make a plan for saving and paying down debt since you don’t know what next month holds.

Tagged in Budget tips

Emilie writes about overcoming debt, while balancing trying to eat healthy, stay fit, and have a little fun along the way. You can find more of her work at