An Effective Plan For Dealing With Suddenly Irregular Income

by Travis Pizel · 6 comments

My income has always been regular. So much so, that I liken it to the rhythmic tick-tock of a clock hanging on the wall. Paychecks from my job as a software engineer have been automatically deposited into our checking account twice a month for the last 19 years.

Even my income as a freelance writer has been regular. I submit my invoices and receive payment at the same time each month. That all changed recently, however. This was quite a big transition, and something my budget was not used to dealing with.

Change Course as Needed

One of my clients recently decided to discontinue their blogging efforts, so my services were no longer needed. They were my largest client,  and the loss of their account was one that impacted my writing income significantly.

In order to fill that hole, I began to dedicate more energy into a blogging group that’s utilized by brands to review and promote products. There is a huge amount of opportunity, but it operates a little differently than my traditional clients, and therefore has sporadic income. Nothing like the consistent income I was used to.

Here’s how it works: opportunities are listed for specific brands looking for bloggers to promote and/or review their product. I then apply for opportunities that would fit the audience of my blog, and if I’m selected, the blog article is constructed and published on the date specified. Payment is then delivered 30 days after the published date.

It’s pretty straightforward, and is an opportunity that I can get as much out of it as I’m willing to put into it. The more time I take to apply to appropriate opportunities, the better the odds are I will be selected.

Being selected is never a sure thing, therefore I can’t count on a fixed amount of income from these opportunities during a month, nor will the payment date for those be the same from month to month. Given the lack of certainty of amount or timing of my payments, I had to come up with a plan to deal with my suddenly irregular income.

Keep Hustling

I need to be accepted for 4-6 opportunities to make up for the loss of income from my previous writing client. So, every day I sign into the group’s portal looking and applying for any appropriate opportunities.

This has become part of my daily routine, and I make it one of my top priorities. It’s not always easy to keep applying, and not getting the opportunities I want, or having to pass on certain ones that aren’t a good fit. But when you’re dealing with fluctuating income, you have to keep hustling.

Set a Salary

I set my regular salary (from my day job and my freelance writing) at the amount I was paid from my former client. I use this as a base of income that I need to make in order to keep the budget functioning like it is.

Having a set salary figure helps create consistency so you won’t stress out when bills need to be paid. The funds should be available at the same time, making it much more reliable.

Create a Payment Cycle

Our household works on bi-monthly budget cycles to coincide with my software engineer paychecks. The income hole left by my former client affects our budget cycle for the second half of each month.

Therefore, I accumulate the payments from my blogging group opportunities in an escrow account until the 15th of the month, then I transfer my predetermined salary amount to my checking account.

Save Excess Income

If there are ever any months where my blogging group opportunities bring in more income than expected, I transfer the regular salary amount into my checking account.

The excess amount remains in my escrow account, where the excess funds accumulate for when I have leaner months, or for emergencies needed to cover bills.

Don’t Take Money Early

During months that you’re low on income, it may be tempting to withdraw money early. This is when having a separate savings account is necessary to help separate the funds (so you aren’t tempted to spend).

I too have to resist the urge to do this, but just remember that whatever you withdraw early, takes income away from the next month. So you may be covered now, but you won’t next month and will have to hustle even more to make up the deficit.

Plan Ahead Budgeting

Since the payments for these opportunities are delivered 30 days after the posting date, I know well in advance the amount of money that will be available to transfer on the 15th of the next month.

We also know if we need to spend less during the first half of the current month in order to smooth things out a bit over the course of the rest of the month.

I was lucky for years to have regular income — even as a freelance writer. Now that my finances have become a bit more irregular I need a plan of action. This is a strategy I’ve used for the past few months, and all is going smoothly. I’m sure in the future some tweaks will have to be made along the way, but so far so good!

If you’re having problems balancing your budget with fluctuating income, give this plan a try. Now’s the perfect time to experiment. What do you have to lose?

Do you have irregular income? What’s one additional tip you use to deal with this?

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  • FinanceQA says:

    I agree with all of your points. Having an irregular income can be scary, but it’s part of being a freelancer. You just have to keep hustling and make sure that you are looking for opportunities to earn. During the lean months, it’s also great to keep the expenses at bay. Saving up on food expenses and prioritizing the bills will help you get through the month. Just make sure you’re on the lookout for other gigs.

    • Travis Pizel says:

      if I were a full time freelancer, I would hope that at least some of my accounts were “regular,” to at least give me a base income I can depend on. An emergency fund is important for everyone, but especially for those that are small business owners (which a freelancer is) that will have their income fluctuate. Thanks for your comment!

  • Kayla @ Everything Finance says:

    Great tips for how to manage an irregular and fluctuating income. Very interesting since I’ve recently started having a portion of my budget relying on my irregular and fluctuating income. I appreciate the tips.

    • Travis @EnemyofDebt says:

      You’re welcome, Kayla. Good luck on getting your own system in place – please come back and let us know what works, and what doesn’t work for you!

  • Alexis says:

    I maintain a separate savings account for the big expenses I face throughout the year, including professional license fees and property taxes so I can sleep at night. I have a budget and use it to establish minimum daily and weekly income targets. If my “regular” irregular sources of income fall below those targets, I find part time jobs to make up the difference. And I am always hustling for the next opportunity.

    • Travis @EnemyofDebt says:

      Sounds like your plan works for you, Alexis. Although I’m not sure I’d personally like the prospect of getting a part time job if my income dropped below targets. I’d look for ways to live within the scope of the income I have, but that would be my own personal preference. Thanks for sharing!

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