MyPocketFP Podcast

Irregular Income, Steady Plan: How to Budget on a Fluctuating Paycheck

• Jason Taylor • Episode 4

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How Should I Budget For Irregular Income?

Money that shows up in waves doesn’t have to create a life lived on edge. We break down a steady, practical system for freelancers, gig workers, and commission-based pros to turn unpredictable income into a clear plan. Starting with your real monthly floor, we show how to map baseline expenses from a few months of statements, then size an emergency runway around your actual gap between gigs. You’ll learn how to use strong months to prepay lumpy bills, lower your monthly burn, and stash surplus in a side account so you don’t see it—and don’t spend it.

We also compare budgeting tools and explain why hands-on beats hands-off when your income fluctuates. A weekly money date, simple categories, and honest reconciliation build awareness that apps alone can’t teach. We cover practical anchors like keeping housing under control even in tight markets, setting aside taxes at the source if you’re 1099, and using a simple order of operations for surplus: taxes and runway first, lumpy expenses next, then investments, and only then lifestyle upgrades. The goal is a calm, repeatable process that works when income spikes and when it stalls.

Mindset makes it stick. We connect spending to core values so your choices feel meaningful, not restrictive. Short, reachable goals beat vague dreams, and visual cues—like placing a photo of your target on your card—help you pause before a swipe. If you’re tired of moving the goalposts on your budget, this conversation gives you a playbook: fixed baselines, flexible choices, and cues that keep you on track without white-knuckling it.

If this helped you breathe a little easier about your money, follow the show, share it with a friend who rides the income roller coaster, and leave a quick review so more listeners can find these tools.

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SPEAKER_01:

Welcome to My Pocket FP, the podcast where your wallet finally meets its financial planner and they actually get along. Join your host, Jason Taylor, Certified Financial Planner, Money Mentor, and your Guide to Financial Freedom. Whether you're planning for retirement or just trying to figure out where all your money went last weekend, we've got you covered. Get ready to take control of your financial life with smart tips, surprising insights, and yes, an app that fits right in your pocket. This is My Pocket FP because your future deserves more than guesswork.

SPEAKER_00:

Freelancers, gig workers, and commission-based pros, this one's for you. Learn how to stay financially stable even when your paycheck isn't predictable. Welcome back, everyone. I am Millie M., co-host and producer back in the studio with Jason Taylor, certified financial planner and creator of My Pocket FP. How are you doing, Jason?

SPEAKER_02:

Doing well. Thank you, Millie.

SPEAKER_00:

Always great being here with you. This one is for me, actually. Let's get into it. How should someone budget for irregular income?

SPEAKER_02:

Uh yeah, you know, that's uh pretty broad question, unfortunately. So, you know, a lot of the people who have, you know, like commission based, they might have like a base income. Uh that's a good way to start. I know a lot of the positions, it's base income plus commissions. So we'll we'll start with with that type of work and then we'll move forward from there. Um, so those obviously the easy way to do it would just you know base your expenses off the base income would be the easy solution. Now, with these type of jobs, it it's when it's the most important to have that savings built up, that emergency savings, because it your income does fluctuate. Um, and to really you need to really dive in on your fixed expenses with any of those commission-based, you know, contract type type of positions.

SPEAKER_00:

Okay, so how do you help clients determine what those baseline expenses are?

SPEAKER_02:

There's a couple different ways of doing it. Um we found that you know, by collecting people's credit card statements and bank statements, you know, for a couple months, we can kind of come up with averages for each month and figure out the the base expenses off that.

SPEAKER_00:

Makes sense. And so what role does a buffer or emergency fund play in managing that variable income? You talked about having a savings, how much do you suggest, and and how does that work?

SPEAKER_02:

You know, it's once again, it's not a straightforward answer. It depends on how marketable your your skills are. So if you're you know doing six-month contracts and it takes you an average of two or three months to get a another gig or another job or another contract work, you want that you know, six to eight months of savings to cover those months. Um, but once again, it all goes back to knowing how much you need each month.

SPEAKER_00:

Absolutely. Having that information and knowing what you need. How important is paying things ahead? I know there were a few times where, you know, I'm a gig-based worker, commission-based worker, all of that. So this is right up my alley. And I just paid my car insurance outright. And just having that one bill off my plate kind of helped me breathe a little bit easier. So is that something you suggest people do when they have those good months to go ahead and things out?

SPEAKER_02:

Yeah, no, for sure. When you have those good months, that's when you, you know, you you pay those big, you know, you know, annual insurance bills. You, you know, I like to tell people to hide money from themselves. That's another thing to do. And then when you have all your money in one bank, and then you have just this side bank that we have a really good year, you know, month, year, you hide some money in that account for a rainy day.

SPEAKER_00:

That has helped me. I actually I needed money for a specific thing, and I just had a light bulb one day, and I was like, there's an account over here, and it's got like a thousand dollars in it that I forgot about. So I'm I'm really big on hiding money from myself. So, are there budgeting tools or apps like yours that work especially well for people who have this fluctuating income?

SPEAKER_02:

You know, I always tell people to build something for themselves. There's a lot of apps out there. You know, ours does not do budget budget specific things. We just kind of keep track of savings and keep track of how much you spend. But for actual budgeting, the I'm an old, you know, pen and napkin type of person. Um, you know, pencil and paper. We do, you know, offer uh Excel spreadsheet for clients, but we find the more hands-on a client is with our numbers, the more they really get to know them and the more real they are. You know, some of those you know, budget apps, they're great, but they don't seem as real to clients.

SPEAKER_00:

I understand that. I understand that. So I know we talked about those, those big, those good months that we have. Is there a system or a percentage that you would suggest as far as save, invest, or spend? Is it 30 30 30?

SPEAKER_02:

Or you know, I'm I'm a big fan of the you know, 10% off the top for charity, regardless of how well you're doing. That's always a good place to start. After that, it really is it fluctuates. Um, I definitely try to have make sure clients don't spend more than 50% on on housing if possible, which it means having roommates, if it means you know, renting out your basement, um, things like that. That's you know, another standard number go by. Other than that, you know, it's hard to tell because there's different you know, taxes you have to withhold depending on you know what bracket you're in, or you know, whether you're part W-2 in commission or if you're full um, you know, 1099 contract work.

SPEAKER_00:

Definitely is a case-by-case um situation. And as we talked about in a previous episode, one month your expenses might be a little bit higher than another month due to Christmas or birthdays or trips or things like that. So everything is just it's almost like a budget is this moving thing. And I know for me, I might say budget 200 for groceries, and then once I get to the store, I'll spend 250. And then instead of instead of just sticking with my budget, I'll just go in the system and change the number.

SPEAKER_02:

Right.

SPEAKER_00:

So it's like you can't move the goalpost, you have to stay within uh those. Exactly.

SPEAKER_02:

It works a lot better that way.

SPEAKER_00:

So, lastly, what mindset shifts like that one are helpful for people navigating financial uncertainty?

SPEAKER_02:

So there's there's a couple things we look at. Um, one is you know, people's core value system. It can be a real stronghold when it comes to how they spend their money. And a lot of times, you know, people don't realize how they interreact as far as your core values and your the way you spend money. Um, so that's a starting point is to figure out why they're spending the money how they are. And then the other thing you know you can look at is having a goal that's within reach. You know, not you know, hey, I want to have a mansion someday. You know, it could be as easy as hey, I want a thousand dollars in investments by the end of next month. And to have a goal that when you're another, you know, one of the things I do to help clients is we'll actually put pictures on credit cards of their goal. So when they're shopping, they pull out their credit card and they have a picture of their dream house. It makes them say, Oh, maybe I shouldn't buy that magazine or that extra pack of gum.

SPEAKER_00:

Right. Sacrifice now for a greater goal in the future and smart attainable steps. I think that's me. I'm just like, I want a million dollars. It's like, let's just start with 10,000 and then away from there. Thank you so much for breaking that down for us, Jason. We'll see you next time for more smart money moves.

SPEAKER_02:

Thank you, Millie.

SPEAKER_01:

Thanks for tuning in to My Pocket FP, where we believe small monthly changes can make big positive changes in your financial end game. If you're ready to level up your money game, head over to mypocketfp.com and download the app today. Your financial planner is now officially pocket sized and doesn't charge by the hour. Until next time, keep your goals high, your debt low, and your pockets smart.