If your income varies month to month, whether you work on commission, freelance, or have an irregular pay schedule, it’s important to budget carefully to avoid overspending.
Here’s a simple way to do that in EveryDollar:
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Add an Income Line for Each Paycheck
Create a separate income item for every paycheck you expect to receive that month. -
Use a Low Estimate in the Planned Column
Enter a conservative (low) estimate for each paycheck based on your past income. If you’re unsure, review previous pay statements to find a reliable baseline. This way, you avoid overestimating and risking overspending. -
Build Your Budget Around Your Low Estimate
Create your budget assuming you’ll receive the lower amount. This helps you live within your means, even if your income fluctuates. -
Adjust When You Get Paid
When your paycheck arrives, add the actual income amount to your budget. Then update the Planned column to match what you actually received. -
Allocate Extra Income Wisely
If you earn more than your estimate, use that extra money intentionally- whether to build savings, pay down debt, or invest. EveryDollar makes it easy to reallocate funds in your budget to fit your goals.
Example:
Let’s say your monthly income ranges between $3,000 and $4,000. Budget using $3,000 as your Planned income - maybe $1,500 per paycheck if you get paid twice a month. When you get paid $3,500, update your Planned income to $3,500 (for example, $1,750 per paycheck), then decide how to best use the extra $500.
Budgeting for the highest amount and only receiving the lower end ($3,000) can cause stress and force you to make cuts. Planning conservatively helps you stay on solid financial footing.
💡 Pro Tip: Consider creating a Hill & Valley Fund to help manage months with lower income and save for those times when you earn more. Learn more in the Over the Hill, Through the Valley section of this article.
Paycheck Frequency