Irregular income budget

Training 175 minutesirregular income budget

You are 33, a wedding and event photographer. June brings $6,000, January just $1,500. In summer money feels endless, in winter it does not cover rent.

Training goal: Turn a bumpy income into a steady one

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Situation

1. What number should the monthly budget start from?

From the yearly average: $3,500
From the best month, summer works
From the worst month: essentials under $1,500

2. All fees land on one card and you spend from it too. How do you bring order?

A holding account and a fixed $2,800 salary
One card, just spend more carefully
Withdraw fees in cash and keep it at home

3. June: $6,000 arrives for three weddings. You pay your own taxes each quarter.

Deal with taxes later, when they are due
Move 25 to 30% straight to a tax account
Buy a $2,000 lens while the money is there

4. January. Bookings worth $900, your "salary" is $2,800. The holding account has $5,200, and February looks like another $900.

Pay yourself $2,800 from the holding account as usual
Cut yourself to $900 and pinch every penny
Take a loan and leave the buffer untouched

What you will learn

Build your base budget on your worst month
A holding account and a fixed "salary" smooth income
Set aside tax from every payment right away

Your real-life step

Find your weakest month of the past year. Check whether it covers your essentials, and open a separate account for taxes.

Questions and answers

How do I budget with an irregular income?

Base essentials on your worst month, pool all income in a separate account and pay yourself a fixed amount. Surplus goes to the buffer and goals.

How much should freelancers save for taxes?

It depends on your country’s rules and status. Many set aside 25 to 30% of each payment to stay safe.

How big an emergency fund does a freelancer need?

Larger than for employees: usually 6 to 12 months of essentials, since income can dry up for months.

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Numbers are illustrative. A game, not financial advice.