How to budget when you get irregular payments

Everyone understands the importance of living on a budget. For most, weekly paychecks or monthly fixed payments (such as Social Security) provide the basis for budgeting. For thousands of others though, paychecks are variable (or non existent) some weeks (or months). This is the life of a freelancer or a small business owner. Like everyone else though, they do understand that they need to carefully budget money. The secret is learning how to budget when you get irregular payments. It is not as difficult as you might think. Here are some simple ways to understand budgeting when you are uncertain how much money you'll be bringing home next month (or week).

Managing regular expenses

There are several monthly expenses that you can count on being the same from month to month. Whether it is a rent or mortgage payment you understand how much your monthly output is going to be for housing expenses. This means that you know the minimum amount that you need in order to make this payment. This is an important determination in deciding how to budget when you get irregular payments.

Utility expenses while being varied can be averaged out over a year. Many electric and gas companies
offer "budget" plans that allow you to pay the same amount monthly without worrying about paying varied amounts each month. This can also help ease the difficulty of how to budget when you get irregular payments.

Managing irregular payments

It is best to set up a budget on a monthly basis (with perhaps a further breakdown for weekly budgeting). This will help you accommodate the irregular payments. The best way to deal with irregular payments is to determine what the minimum amount you anticipate receiving over a one year period. Once you do this work your budget based on that lower amount. Additional funds can be added if needed, but it's best to try to live within lower budgeted amounts.l

If you are one of the millions who lives with the uncertainty of how much money you'll receive every week or every month, you are more likely to depend on a budget than those who know exactly how much money they are going to bring home all the time. Irregular payments are an opportunity to live frugally, to save more money and to adhere to a regular monthly budget.

Don't let the fear of not knowing how much money you might bring in two or three months from now stop you from creating a budget. The importance of a budget when you get irregular payments cannot be stressed enough. It's not difficult to learn how to budget when you get irregular payments. If you carefully budget based on fixed monthly expenses and understand that you may have to cut back on luxuries such as that cup of coffee at the local coffee shop daily you will be able to stick to your budget regardless of how irregular your monthly income might be.