Irregular Income...Smirregular Income

When teaching a couple or group the art, science and mathematics of budgeting, one question/comment comes up more than any other.  “I am not a salaried employee and my income varies from month to month.  How am I suppose to budget.”

Prior to learning about You Need A Budget's Rule 4, the best advice I could give was to make a “Prioritized Spending Plan.”  In other words, list all your expenses most important to least important with the amounts you want to budget to that category.  Then when you get paid, use that money to fund as far down your budget priority list as possible.  Not a very warm and fuzzy answer!

But wait, there is a better way.  With YNAB, your Rule 4 goal is to spend this month only the money you earned last month.  REVOLUTIONARY!  You now have the power to budget exactly the same as someone who gets a salaried check once a month.  No more guessing which priorities will be most important if I only make $3,000 this month instead of the $4,500 I had hoped for.  Now you can make the EXACT decisions on importance up front knowing you only have $3,000 to budget.

Think about it, no more wondering if you'll have enough hours or make enough commission to pay your bills.  A few weeks of sacrifice to eliminate a lifetime of worry!?  Sounds like a good trade off to me.  

What about you?  Are you ready to live this month on money you made last month?