How To Expect The Unexpected When Your Income is Unpredictable

Budgeting With Irregular Income: Part 5


We can’t change the fact that you don’t know exactly when or how much you will get paid, but we can teach you to be in total control of your money, and stop stressing about it! This eight-part series will teach you exactly how to budget successfully and get ahead, variable income and all.

Get caught up, go ahead we’ll wait…

OK, great. So you are asking the right questions, resisting the urge to forecast and thinking through your monthly expenses a little bit differently.

Preparing for irregular expenses by treating them as monthly expenses seems easy enough when it comes to something like an insurance payment. After all, there’s no mystery to when it is coming or how much it will cost. Just break it down, budget for it each month, and it’s done. When it is time, you are ready—zero stress.

But what about unexpected expenses? Things you don’t even want to begin thinking about? When the car breaks down or medical expenses? You just hope upon hope upon hope that they will never happen. But they do, and it’s challenging enough on a regular income—and with a variable income, you are even more vulnerable. What are you going to do?

Well, actually quite a bit.

Unexpected Is A Cop-Out

Just because you don’t know exactly when something will happen or how much it will cost, does not mean you aren’t expecting it to happen. You know you will get pregnant, you will need a new car, your laptop will die, the house will need something or other that is not at all decorative or fun to spend money on.

Pretending these types of expenses are “unexpected” is a little bit like sticking your head in the sand and just screaming, “La, La, La, La, I can’t hear you!” Because they aren’t unexpected. You know. You might not want to think about it. You may have never conceived of a reality where you’d have the money to cover such things. But they are not unexpected.

So budget for all the things. Even if it is just a little bit every month, you are building the habit, and being more aware, and any money saved is better than no money saved.

And once you get the hang of it, if you imagine you’ll need a laptop replacement in two years, and the going rate of a laptop is $1,800, set aside $150 a month. If you end up needing it two months sooner, you’ll have to find that last $300. But that’s a whole lot better than having to charge the whole $1800. Which, admit it, is what would have happened otherwise.

Better Safe Than Sorry

Imagine the feeling of being completely ready. No unexpected expenses. No stress, no scrambling. Just laptop money sitting there, waiting for impending laptop death. And if the unexpected doesn’t happen, you just have a pile of money sitting there providing you security. Not too shabby.

Planning ahead for larger, less frequent expenses is important for anyone who budgets, but for you and your variable income? It’s critical.

Prepare for your True Expenses, those that are just as variable as your income, and you’ll wonder why the unexpected was ever stressful–or even unexpected.

Next up: Part 6: Change Your Mind, Change Your Budget