No matter what type of work you do, if your income is fluctuating, you should budget with a money tracking app so you're less financially stressed.

How to Budget with a Fluctuating Income

by Mackenzie Stewart

Fluctuating income is a feature of a lot of different jobs. We got freelancers, retail workers, food service, childcare, tattoo artists, personal and virtual assistants, dog walkers, food delivery and so on.

A large part of our job sector is hourly jobs or ones that don’t have a fixed set of hours to have predictable pay. This can make budgeting extra complicated. How do you budget when you don’t even know how much you’ll earn in a month? 

Like all things money, you need to figure out how to alter traditional money advice to your unique situation. Luckily, I’ve already lived that for you and I’m going to pass along my most simple way to organize a budget without predictable income.

To start, I suggest working with two budgets.

One is going to be your absolute necessity only. The survival stuff. Rent, food, electricity and those kinds of expenses. The second budget is going to be the survival expenses plus the stuff you can do without if needed but would really like to cover. Once you have the expenses listed, grab a good ol’ fashion pen, paper and calculator and total up each budget. Now you have the bare bones number of what you absolutely need to make every month and your budget for when funds are flowing. 

I realize, a pen and paper method might not be convenient considering we have phones on us at all times. You’re already on Nav.It’s website! Use their app! Because it syncs with your bank accounts, you’ll get a perfect look at what expenses you have. This is helpful for seeing those random subscriptions you’ve been forgetting to cancel.

(Need a boost on tracking expenses: check out this article.)

A quick note about these budgets. Some of you have expenses that are required to keep working. Things like art supplies, personal grooming or software subscriptions. These items can be placed wherever makes sense for you. Some can be pared down, like switching to a free service instead of a paid one. If they’re a necessity to keep you working, it’s totally fine to put them in your bare bones budget. 

Do math, or let a money tracking app do it for you

Alriiight (in your best Linda Belcher voice) you have your two budgets now. We’re going to do some easy math here so you can see what those expenses break down to weekly. Take those monthly expenses and divide by four, because four weeks in a month, duh. There’s the amount you need to make weekly to cover your expenses. If you want to know what you need to make hourly, divide that weekly total by 40, which is the traditional amount of hours for a full-time job.

In case you’re an “I gotta see an example.” person, here’s an example. Say my bare-bones monthly expenses are $1,000. Dividing that by four means I have to make at least $250 a week to cover those expenses. My expanded budget is $1,600. This would break down to $400 a week. As long as my weekly take-home pay is between those two amounts, I’m golden. 

But aren’t we going to figure out my income? We definitely can. If you want to see what your average monthly pay is, total up all your income from the last three months and divide by three. Again, you’re already on Nav.It’s website baby birds. The app is also really helpful in finding your average income because why? It syncs with your bank accounts! To quote founder Erin Papworth, who was also a freelancer so she knows the struggle, “When your income fluctuates but you know roughly what you’ll make throughout the year it’s helpful to take averages. So a money tracking tool can show you the trends and averages to help you budget month over month and track what’s come in to date.” 

The next step for budgeting with fluctuating income

Compare your two budgets with your average income. Do you typically have enough to cover your bare-bones expenses? Is there usually enough for the expanded budget? If the income isn’t enough to cover the minimal budget, look through and see where you can reduce some expenses and move those saved dollars to more imperative items.     

So far we’ve found what our overall monthly expenses are, what those expenses break down to weekly, as well as what your average take-home pay is. What the hell do you do with this information? Now, you decide what is your preferred way to tackle those expenses. 

Having a better method to manage money

The envelope system works really well. Especially if you get cash tips. You can designate a percentage of your pay each week to these envelopes or by denomination. I used to put $100’s and $50’s towards my big bills like rent and electricity, $20’s and $10’s went to smaller bills like groceries or my phone and $5’s and $1’s were for my miscellaneous or personal money. Extra money can be rolled over to next month’s bills to cover potential shortages or move that extra into saving, sinking, investment or tax funds. 

I’m going to remind you a third time, just for fun, use the Nav.It app. Like for real. Not everyone gets cash tips. Nav.It is like a digital envelope system. Enter your expenses and their cost and every time something gets paid, like the auto-debit for your phone bill, it will basically cross that expense off your list. This helps you keep tabs on what’s been paid, what still has a balance and what came in under budget, like your groceries. 

How I personally manage my money breakdown

Personally, I preferred working towards my weekly income goal. This can be modified for any industry. Taking from the example earlier, if I know I have to make at least $250 a week to cover my expenses, does my weekly schedule add up to that amount? If I make $9.25/hr and this week I’m only scheduled for 20 hours, I’m only bringing home $185 before taxes. I have to make up for a $65 loss that week. Get creative with how you decide to address that.

If you work hourly, see if you can pick up a shift from someone else or work an extra hour or two per shift. If you have a client-based service or side-hustle, throw out a little promotion or open appointment reminder to bring in additional clients. Those of you with products or downloadable content, do a flash sale. Those of you in the service industry might have regulars that only like to come in when you work. Send a text with your schedule for the week so they come in and drop some nice tips your way.  

Planning ahead includes taxes

What about taxes? I found a super handy calculator through ADP to help with this. I mainly used the hourly paycheck calculator but they offer different kinds based on how you get paid. With this calculator, you enter some basic information and it will calculate the amount of your paycheck after taxes and fringes based on your state and withholdings. It might not be on the dot, but it’ll be a really close estimate based on my comparisons. This is also helpful if you’re signed up for insurance or 401k deductions so you can get closer to your true take-home pay. 

Your income fluctuates, but your financial stress doesn’t have to

While not having a guaranteed work schedule can make budgeting hard, it doesn’t make it impossible. I happened to find this way was easiest during my ever-changing work schedule days. I created smaller goals to work towards and the two budgets gave me a buffer so I wasn’t beating myself up when I couldn’t cover all the expenses I wanted to. It still leaves room for savings goals and investing. There are thousands of ways to set up your budget. You’re just going to rework some conventional budgeting practices to fit your unconventional income. 

Read More:

Downloadable Guide to Budgeting

Managing Money and Financial Stress

How to Budget to Save Money


Mackenzie Stewart launched her site Life at 23k to fill a void for the people who can’t afford to invest or start an emergency fund. She wants to find and give financial advice that the underemployed minimum wage worker can use – not just those making great salaries with marketable degrees already.

You can find her on Instagram, Twitter and Facebook.

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