Depending on how frequently you're paid, budgeting can feel overwhelming, but it doesn't have to stay that way. EveryDollar Premium users, unlock access to the Paycheck Planning tool, designed to make tracking your monthly cash flow simple and stress-free.
Learn about Paycheck Planning here: Paycheck Planning and Paycheck Planning FAQ.
New EveryDollar budgeters receive access to a free 14-day trial of EveryDollar Premium. Start your trial here: Start a 14-Day Free Trial.
Set Your Paycheck Frequency
On the Budget page, set up the Income group by creating a budget item per paycheck. Optionally, add a budget item for another income source such as a side hustle.
Pro Tip: Budgeters who are paid weekly or biweekly should add an extra paycheck to account for the two months each year when they receive one.
Irregular Income
If you have a variable income, use a low estimate for each paycheck in the Planned column. Once you're paid, track the income transaction to the budget item.
Next, adjust your Planned column amount to match what the Received column shows. Lastly, you can adjust your budget to allocate the extra money you received.
Setting Priorities
When you have an irregular income budget, the first budget items you should cover are called the Four Walls, these are:
- Food
- Utilities (electric bill, water, etc.)
- Shelter (mortgage or rent)
- Transportation (gas for the car)
After these are covered, you need to ensure that you also cover any insurances you need. Then, cover health costs that are not covered by insurance (copays, counselors, medications, etc.).
Lastly, prioritize clothing within reason. For example, if you have children at home, your children will need new clothes, but you don't need to add a new pair of shoes to your wardrobe.
Hill & Valley Fund
If you experience months that bring in more income, and months that bring in less income, you can consider setting up a Hill & Valley Fund.
A Hill & Valley Fund is a savings account where you put aside extra money to get you through the months with less income, helping you meet monthly expenses. It’s one step down from an emergency fund. With an emergency fund, you only use it when the transmission goes out or a roof starts leaking.
Next Steps
The budget is designed to give each dollar of income for the month a job, so money left unspent at the end of the month, that isn't needed to cover next month's bills, should be applied to your current Baby Step.
Learn more about the 7 Baby Steps here: The 7 Baby Steps.