how do you budget when you don't have a consistent income?

[caedmyn]

I'd really like to start a budget but DH keeps saying that we can't have one since our income is wildly inconsistent from month-to-month (he has his own business).  Is there any way to do a budget without knowing how much money will be coming in that month?

[EviesMom]

Long-time freelancers here. You can still do a budget! A yearly one that would be helpful overall, as well as looking at how to make sure you set aside enough in the more flush months to get you through the leaner ones.

[Smidge]

I'm not sure if you're Christian or not, but this site has helped us a lot (DH is self-employed too)

http://christianpf.com/

I also have 2 spreadsheets in MS Excel that I work in often and have REALLY helped :)  Send me a PM if you're interested

[cappuccinosmom]

Figure out what you need to live on.  The minimum (and that includes adding to savings every month, even if it's only $50).  Live on that.  When you have "up" months, bank what is not in your budget rather than using it all up, so that you will not feel a pinch in a "down" month. 

[cristina47454]

Yep, I agree with that.  My DH is full commission sales.  Going forward we are trying to set up a "hills and valley" account, bcs without fail there will be months where the income exceeds our budget, and other months where there is a deficit. Figure out your basic NEEDS : housing costs (mortgage, utilities, property taxes, ins, etc), food, auto, insurance, credit card minimums, sinking funds etc and use that as your baseline.  You will probably have to go through your last several bank statements/credit card/debit statements to recreate this.  If nothing else, it will be eye opening to see where your money has been going!

[redvlagrl]

Our income is somewhat variable. We do our budget at the end of each month, for the coming month once we can see what will be coming in. We leave ourselves a buffer of a couple of hundred to cover cash flow.

On the leaner months we cut back our blow money and/or don't fund our clothing line etc.

[annethcz]

Our income is somewhat variable.  DH's income is consistent, but I only work 9 months/year, and the amount is not consistent from month to month.

I think the advice to figure out a basic budget for needs is spot on.  Track your spending for a month or two (or go through previous bank account/credit card statements) to see what you really NEED to spend on.  Once you've figured that out, you can look at discretionary expenses and figure out how much discretionary spending it's prudent to do each month, vs. saving for down months. 

[KayTeeJay]

This. When your income is not consistent, it's even more important to budget than if you have a steady dollar amount coming in each month. My husband was "on call" for years, and we never knew exactly how much he would make per week. It was stressful, to say the least. You have to be very disciplined about banking during feast to use during famine.

Quote:

Originally Posted by cappuccinosmom 

Figure out what you need to live on.  The minimum (and that includes adding to savings every month, even if it's only $50).  Live on that.  When you have "up" months, bank what is not in your budget rather than using it all up, so that you will not feel a pinch in a "down" month.