Josh and I have always had paychecks with different amounts. Always. He has worked in the collection industry for 25+ years and his paychecks are based on commission. As you can imagine, he has never once had the same amount come in, in all the years we’ve been married. Some months are amazing, some not as amazing. (And he always works hard – not taking anything away from him on that!) But it can definitely be a challenge to budget when your paychecks are different every month.
As a blogger, I bring in different amounts every month as well. It is never ever the same. I can predict approximately how much I will make based on pageviews, campaigns, etc but it varies so much from month to month. Having both of us with inconsistent income can make things especially challenging. Let’s chat about that.
WRITE YOUR EXPENSES DOWN.
I have talked about budgeting and writing things down about 1 million times. There is a reason for that – if you don’t write it down, you won’t know what you’re working with. Ignorance isn’t bliss. Unless you want to avoid all the adult stuff (which trust me, I want to too sometimes).. but really, this is the first crucial step always. Lay it all out there. You’ve got this. Download a free Ultimate Budget Binder here.
PLAN FOR THE WORST, HOPE FOR THE BEST
After you write it all down, you should look at your best month and look at your worst month. Most of the time (depending on the industry you’re in), you will fall somewhere in between. But if you know how low it’s been and how high it can go, you will not be able to really get to the knitty gritty and plan. We have often said ‘I need to make _______ amount of money to stay afloat.’ Figure out what your absolute must break even amount is and use that as a starting point.
AVERAGE THE LAST YEAR
Along with writing your budget down and planning for the worst, you need to average everything. Add up all of the expenses one by one and then divide by 12. If you don’t have them readily available (not super organized? you aren’t alone), you should be able to look everything up in statements from your bank or by calling the companies you paid. Yes, this is a pain. But do it once and you’ll be set.
STAY A MONTH AHEAD AS MUCH AS POSSIBLE
Kind of a no brainer and not just for those with inconsistent incomes, but if you want peace of mind, always try to stay one month ahead. That way, when things get really tight on a bad month, you’ll already be ahead of the game instead of scrambling. I will talk more another time about how to earn extra money for those crazy, hard times.
SET UP ANOTHER BANK ACCOUNT
By setting up a separate bank account, you can easily put money aside and not dip into those funds for the basics. It doesn’t have to be savings (though I do suggest you have that as well), but having one bank account that you can use for day to day expenses and one that you won’t touch until payday and for bills helps separate things in your mind.
I know that there are all types of jobs that have the same situation – sales, in the restaurant business (servers, etc), if you are self employed, and more. How do you manage your budget with a different paycheck every month?