How to Make a Budget With an Irregular Paycheck

An irregular paycheck may make it difficult to budget.

An irregular paycheck makes it difficult to budget because you do not know how much money you will earn each month. It can also make it difficult to cover your necessities when money falls short. It is even more important to set up a budget when your paycheck varies because you need to plan ahead. This budget will take more work to establish and requires you to set money aside when you make more money, but it will reduce much of your financial stress.

Things You'll Need

• Receipts for the last six months
• List of monthly bills

Instructions

1. Divide your expenses into two categories: necessities and luxuries. List each of your current expenses under the appropriate category. Under necessities would be housing, food, utilities and transportation costs. Under luxuries would be clothing, satellite television, gym memberships, eating out and entertainment categories.

2. Add up the total under necessities. This is the minimum amount you need to make each month in order to survive. Compare that amount to your lowest paycheck amount for the year. (If you are doing a monthly budget, then look at the total you earned for a month if you are paid twice a month or weekly.)

3. Set up a category to save money for the months you do not make enough to cover your budget. This category should come before your luxuries in your budgeting priority. Set an amount you contribute each month to average out your lower pay periods. Depending on how much your pay fluctuates you may need to set aside large amounts on your good months or just a few hundred dollars a month.

4. Review your budget at the beginning of each month. Compare your monthly income to your budget categories and assign dollar amounts to your categories beginning with your necessities and then your savings category. If you have money left from your paycheck, assign it to your luxury categories. If you do not have enough money to cover your necessities, then transfer money from your savings category to cover your necessities. Do not take money from savings to cover your luxuries.

References

• CNN Money: Making a Budget
• MSN Money: How to Build Your First Budget