How Should I Budget If My Income Varies Each Month?

[Unclewaffl3s]

So, I’m diving into budgeting, and I’m a bit puzzled about where to start. Say my monthly income fluctuates, how do I go about budgeting? Let’s take an example: I earn around 5k a month. Should I begin with that amount and then subtract expenses? Or do I factor in what’s left from previous months too? I guess it’s mainly about the income for that specific month, and whatever’s leftover goes into savings or other goals. But what if I have a sudden big expense? Should I adjust my budget by pulling from savings and adding it to my income for that month? Or do most folks just cut back on other expenses to cover it and save up for those bigger purchases?

[mikeclover]

The good advise is to always budget for the lowest monthly income at least then you will always have the major costs covered. Then, if you have a good month, you can revise your monthly budget up or put the extra into savings.

[Lilly]

save your commission money as soon as you receive it and live off of your base.

[BrianPaul2]

@Unclewaffl3s

So, I’m diving into budgeting, and I’m a bit puzzled about where to start. Say my monthly income fluctuates, how do I go about budgeting? Let’s take an example: I earn around 5k a month. Should I begin with that amount and then subtract expenses? Or do I factor in what’s left from previous months too? I guess it’s mainly about the income for that specific month, and whatever’s leftover goes into savings or other goals. But what if I have a sudden big expense? Should I adjust my budget by pulling from savings and adding it to my income for that month? Or do most folks just cut back on other expenses to cover it and save up for those bigger purchases?

In your case, you could use either way if you make an average of $5,000 a month. The method based on the lowest monthly income might be safer, especially if your income changes a lot.

[Adrian]

Hi there, Record your income for at least three to six months to understand the fluctuations.