How To Budget On An Unstable Income

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These budgeting tips can come in handy when creating a budget with an unstable income.

Living on an unstable income might be difficult as this means that one cannot tell how much will be coming in every month. Many people hold the notion that an unstable income does not require an organised budget because of its unpredictability, but a budget remains an essential tool in ensuring proper financial management regardless of the nature of the income. Making planned decisions about your income and having a budget in place serves the purpose of enhancing financial accountability.

While a variation in income might pose a challenge in budgeting, there are a few techniques that can help achieve this stride. The following budgeting tips can come in handy when creating a budget with an unstable income.

  1. Keep records of income

You are required to have a sound knowledge of your income and expenses in order to create a reasonable budget for your finances. This can easily be achieved if you keep effective records of your earnings. As a full-time, part-time or commission-based earner, you need to have a grasp of how much you earn over a given period of time. This will help to regulate budget planning and assist in determining how much is allocated to meet different needs.

  1. Set financial goals

One of the essential components of budgeting is the setting of financial goals. Financial goals tell what you intend to achieve with your income. These goals can be categorised into three groups which are:

  • Short term goal which can be within one year.
  • Midterm goals which can be between one to two years.
  • Long term goals which can be from two years and more.

Once you have identified your goals, it becomes easier to keep track of your progress towards achieving them. When budgeting on an unstable income, financial goals will help you utilise your finances effectively. Short term goals can be reviewed regularly and addressed as finances flow in at different times while long term goals can be saved up for.

  1. Prioritise necessities

As your financial goals are been written down, you should take into consideration how necessary or needful they are. Some fixed essential expenses like rent can fall under mid-term goals while some variable expenses like feeding, clothing, transportation, and others which are also essential can be written down as short term goals. Regardless of if they are fixed or changing, these essential expenses are necessities that should be prioritised when making a budget.

  1. Diversify your earnings

A little here, a little there, when collected together, they can make a greater whole. Having diverse streams of income can lessen the pressure of meeting certain financial plans which makes budgeting more achievable. Living on an unstable income has its moment of ups and downs. There are periods of high income and low income as well. Diversifying your earnings will help to make up for those periods of low income. These diverse streams of income can either be budgeted for separately or collectively.

  1. Incorporate spending and saving plans

To meet some needs that might pop up or some needs that may take a long period of time to be met, it is important to have a savings plan properly incorporated in the budget. One might be wondering how to save up with an income that cannot be predicted. This is where making plans with an estimate comes in. Look over the previous months, make an estimate of what should be coming in next and allocate it into savings and spending plan. This estimate can be adjusted as time goes on based on the flow of income but your budget should treat your saving as important as your expenses.


Budgeting for an unstable income might not be an easy stride, but it is an essential step that needs to be imbibed if anyone desires effective financial management. Try as much as possible to follow the strategies discussed here when budgeting on an unstable income.



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