budget when income varies

[luvsJack]

For those with income that varies week to week, how do you budget?

My income stays the same each month and I am paid once a month. I pay the mortgage, car insurance, dd's medical insurance and put some in savings each month. Everything else comes out of dh's weekly pay.

His pay varies every week. For example, one week $600, the next week may be less and the two weeks after will be over $1200. (just throwing these numbers out there, but it can vary that much)

So, if anyone else has pay that can vary that much; how do you budget?

 

[mom2val]

We try really hard to put money in savings for when dh does have a low check. Sometimes i even pay extra on the bills so we have a credit. I also make sure I do a big grocery shop when he gets a good check.

 

[ElizK]

My DH is self-employed, so his pay varies a LOT. My pay is always the same, but I'm just part-time. Some months we'll have enough to pay everything comfortably, the next month we're barely scraping enough together. I have not figured out how to do a budget either. If someone has a good idea, I'm very open to suggestions!

 

[jessica52877]

I am there with you. My income varies and DH's stays the same. I have never really set a budget because of this reason. I assume that I could save more $ if I had one.

 

[Ava]

I'm not a budgeting expert by any means, but I think a helpful first step is to make a list of all of your monthly expenses. Include at least an estimate for everything - food, clothing, pet supplies, kid's activities - everything. Add it all up & divide by the # of checks you get in a month. Hopefully the total falls somewhere in the middle of your paycheck range. Whenever you get a check that is more than the amount of your expenses, put the excess into savings. Open a separate account if you have to to stay organized. Then on those weeks when the check is lower than your expenses, you'll have money saved to cover the difference. I think it takes discipline for anyone to not get excited & start spending when they get a big check.

 

[foltzy]

My husband's income varies not a lot but some months his paychecks can vary by $300. So I have an excel sheet that has all our monthly and even yearly and bi-yearly bills, if it's a bill I pay anytime I break it down and budget, then everything that I have budget for things that aren't even due yet are put into their own things in my money program until I need them. I then figure out what it'll take to pay them all (for example we pay about $85 a month for car insurance but actually pay it every 3 months) I budget them all out so that if we have a small check the stuff is still covered. I do this for everything. It really helps us to stay on budget, to know that things will get paid, to know we don't have to scramble. I really like my budget.

 

[sahm1000]

We have these same problems when it comes to budgeting! I am a stay at home Mom to three so I don't have an income. My husband has a salary and gets commission. His commission can be great or nothing. We have learned to save when we get big commissions so those months when we get nothing, we have saved so we can get by. But it's not easy!

 

[luvsJack]

I have tried the adding the bills and dividing by the number of checks and that works to an extent but then we will get hit with a really small check that won't cover that amount and ugggg its just really frustrating. I feel like I am constantly doing and re-doing a budget, but maybe that's just what it takes.

Ava, I know exactly what you mean about not getting excited when we get a large check and spending it. Especially when he gets several smaller checks in a row and we keep putting off buying little things. I have to remember that we didn't suddenly get this windfall that is there to spend but I have to make sure we are covered for the next little check.

When I was reading Dave Ramsey, he says to write down everything in the order it needs to be paid. Well, I don't have anything that I can NOT pay or really put off. So everything ends up at the top of my list! I guess I just am not to good at prioritizing.

 

[mb168]

When I was reading Dave Ramsey, he says to write down everything in the order it needs to be paid. Well, I don't have anything that I can NOT pay or really put off. So everything ends up at the top of my list! I guess I just am not to good at prioritizing.

This is exactly right. You list your bills in order of priority. If you could only pay one bill what would it be? Food, shelter, utilities should be on top. Once you figure out what is your most important bill you say "ok, if I could only pay one more bill, what would that one be?" and you go down the list until you run out of money. At that point draw a line and everyone below the line doesn't get paid that month. When you run out of money for the month there really isn't much more you can do. This is why he suggests having 3-6 months emergency fund for those emergency moments.

 

[mom2brina]

Especially when your income varies month to month, it is important to use last month's income for this month's bills. That is one of the first steps in the You Need A Budget program. We started YNAB in January, and it has been amazing what we have saved and paid off in just 10 months.

 

[pearlieq]

Budget off of the smallest number. Make your spending plan fit that, and any extra money can be divided between debt payments, savings, investing, and/or fun.

That's what I do with DH's income, which is also somewhat variable. I budget off the base and handle the rest separately.

 

[njcarita]

my husbands is self employed so our monthly income is all over the place---
some months he may not get paid at all----so I've listed absolutely everything in our budget( rent,car insurance , misc spending etc etc etc)yearly totals---- i divide by 12.... and that's what I pull out of our business account every month.....

 

[m&m's mom]

Easy- we can "live" in one income- mine.
Fortunately it is only very occassional that DH's check does not pay the bills but since I have the steady check every 2 weeks, we purposely set our expenses to be able to live on my income.
I can totally sympathize.

 

[luvsJack]

Especially when your income varies month to month, it is important to use last month's income for this month's bills. That is one of the first steps in the You Need A Budget program. We started YNAB in January, and it has been amazing what we have saved and paid off in just 10 months.

Ok, dumb question. What is You Need a Budget? Is that another part of Dave Ramsey?

 

[clutter]

I have tried the adding the bills and dividing by the number of checks and that works to an extent but then we will get hit with a really small check that won't cover that amount and ugggg its just really frustrating. I feel like I am constantly doing and re-doing a budget, but maybe that's just what it takes.

Ava, I know exactly what you mean about not getting excited when we get a large check and spending it. Especially when he gets several smaller checks in a row and we keep putting off buying little things. I have to remember that we didn't suddenly get this windfall that is there to spend but I have to make sure we are covered for the next little check.

When I was reading Dave Ramsey, he says to write down everything in the order it needs to be paid. Well, I don't have anything that I can NOT pay or really put off. So everything ends up at the top of my list! I guess I just am not to good at prioritizing.

Deposit his check directly into savings. Then transfer out the amount of your weekly budget (hopefully you can start this with one of his larger checks). That way, the excess is automatically saved.

 

[Colleen27]

DH is self employed in a seasonal field and I'm hardly working at all these days, so our income is all over the place. He might make $6K in a busy summer month then not work at all in some winter months, so budgeting is a challenge.

My main reaction has been to cut down the must-pays as low as possible. We don't have car payments or a mortgage, I'm constantly working on lowering energy bills/making our home more efficient, I grow a lot of our fresh produce and can/freeze for the winter, buy meat in bulk and store it in the deep freeze, etc. So in a lean month, we can live mostly out of the pantry/freezer and only have to ap the savings for utility bills. Big annual expenses like taxes and insurance are all paid in full over the summer, when we have more coming in, so we're not making payments on those things during the winter. Same goes for big shopping trips - towards the end of the summer, we buy meat packages (1/4 cow, whole hog, etc., cut and packaged into meal-sized portions) from a nearby farm that go into the freezer for winter eating. And we don't adjust our spending habits to match increases in income; we're happy with our modest lifestyle, so we just save any extra we have coming in, to pad the emergency fund or spend on planned splurges like travel if the saving account is in good shape.

 

[luvsJack]

Easy- we can "live" in one income- mine.
Fortunately it is only very occassional that DH's check does not pay the bills but since I have the steady check every 2 weeks, we purposely set our expenses to be able to live on my income.
I can totally sympathize.

I would love it if we could live on just my income, but it is waaay to little for that. I have wonderful benefits and time off to be with my children but not much pay. When I took the job I knew it would only pay a minimum of our monthly bills but I don't have to worry about where dd will be or pay anyone to keep her and since, so much of the time, I am the only parent around it was a trade off we needed to make. But at the time, Dh's normal pay was what a "big" check is now. Hopefully we are seeing it coming back to that.

 

[swissfamilyrobinson]

I would love it if we could live on just my income, but it is waaay to little for that. I have wonderful benefits and time off to be with my children but not much pay. When I took the job I knew it would only pay a minimum of our monthly bills but I don't have to worry about where dd will be or pay anyone to keep her and since, so much of the time, I am the only parent around it was a trade off we needed to make. But at the time, Dh's normal pay was what a "big" check is now. Hopefully we are seeing it coming back to that.

This sounds like our situation exactly!

 

[ohlas]

I have tried the adding the bills and dividing by the number of checks and that works to an extent but then we will get hit with a really small check that won't cover that amount and ugggg its just really frustrating. I feel like I am constantly doing and re-doing a budget, but maybe that's just what it takes.

Ava, I know exactly what you mean about not getting excited when we get a large check and spending it. Especially when he gets several smaller checks in a row and we keep putting off buying little things. I have to remember that we didn't suddenly get this windfall that is there to spend but I have to make sure we are covered for the next little check.

When I was reading Dave Ramsey, he says to write down everything in the order it needs to be paid. Well, I don't have anything that I can NOT pay or really put off. So everything ends up at the top of my list! I guess I just am not to good at prioritizing.

this is way you need min of 1k just sitting in bank

 

[luvsJack]

Deposit his check directly into savings. Then transfer out the amount of your weekly budget (hopefully you can start this with one of his larger checks). That way, the excess is automatically saved.

Great Idea! It would keep us from overspending from those larger checks and that would help a lot.