The freelance economy has grown significantly in recent years, with 28% of skilled knowledge workers operating as freelancers or independent professionals, according to Upwork.

Although working independently has many perks, it can be difficult to learn how to budget on an irregular income. One month you’re flush with cash—and the next you’re wondering if you should start searching for a 9-to-5.

The good news is, budgeting on an irregular income is possible. And once you have the right system in place, it can actually feel empowering.

This guide breaks down how to budget on an irregular income step by step, so you can stay in control no matter how much you earn. 

And if you need a little extra income boost along the way, KashKick makes it easy to earn extra money by playing games, taking surveys, trying new apps and more—all from your phone.

What Is an Irregular Income?

An irregular income is any income that changes month to month. This is something freelancers, self-employed workers, contractors, gig workers and small business owners frequently face.

Unlike salaried workers, this type of employment doesn’t come with a consistent, predictable payment—which can make budgeting difficult. It requires a bit of a different approach—one that prioritizes flexibility, planning and preparation.

So what does budgeting on an irregular income look like? Follow the steps below to get started.

Step 1: Create a “Bare-Bones” Budget

First things first: It’s time to create a “bare-bones” budget. This budget includes only your non-negotiable expenses, such as:

• Rent or mortgage
• Utilities
• Groceries
• Transportation
• Insurance
• Internet

✅ Action step: List all your non-negotiable expenses. The goal is to find the number you absolutely must earn to keep your life running smoothly. This is your safety net for those lean months when invoices are “still processing” or business is slow.

If you don’t want to review your spending line by line, you can always use a money management app like Monarch Money. Connect all your accounts, then it’ll paint your full financial picture! When you sign up through KashKick, you can get up to $36 in rewards—a nice little treat for taking your first step!

Step 2: Build a “Comfort” Budget

Once you have your bare-bones budget set, it’s time to create a “comfort” budget. Think of this as your Goldilocks budget—not too tight, not too loose, but just right. 

This budget covers your non-negotiables as well as some of your wants, like dining out, travel savings, subscriptions or entertainment. Think of this as your target budget on average or good months.

✅ Action step: Add your “nice-to-have” expenses to your essential ones. This gives you a target income level when work is steady or booming—and helps prevent overspending when money feels abundant.

Step 3: Build an Irregular Income Fund

Income that fluctuates is like that one friend who’s always late to the party. You can’t change them, but you can prepare for them. 

Enter the “Irregular Income Fund.” Think of this as your very own financial shock absorber, cushioning you during those unpredictable income months. The goal is to stash away a portion of your income during high-earning months to cover the low-earning ones.

✅ Action step: Start by saving a fixed percentage of every payment or invoice. Some folks recommend 20% to 30%, but find what works for you. This money goes straight into your “Irregular Income Fund,” which is different from your regular savings. This fund is specifically to help you maintain your “comfort” budget even when times are tough.

Need a place to set up this fund? The Chime Checking account has no monthly fees or minimums. When you sign up through KashKick, activate your card and make your first direct deposit of $200+, you’ll get a $300 KashKick reward.

Step 4: Pay Yourself a “Salary”

Why not make things a bit more official? Instead of living in feast-or-famine mode, try paying yourself a consistent “salary” from your irregular income. This creates a predictable cash flow in your personal budget and gives you a steady framework for your monthly expenses.

✅ Action step: Calculate a reasonable salary that you can comfortably sustain, even during slower months. If you earn more one month, leave the extra in your business or savings account. When the lean months come, you’ll have a buffer to maintain your “salary.” This not only smooths out your income but also helps set boundaries between business and personal finances.

Step 5: Use the 50/30/20 Rule—With a Twist

The 50/30/20 rule is a classic budgeting strategy: 

• 50% for needs
• 30% for wants
• 20% for savings. 

However, let’s add a twist for those with a fluctuating income: Make those percentages flexible. In a high-income month, aim to allocate more than 20% toward savings and investments. In a lower-income month, focus on covering the essentials first.

✅ Action step: Create a flexible version of the 50/30/20 rule that adapts to your earnings each month. Make it a fun challenge to see how well you can balance it out!

Step 6: Track Income and Expenses Consistently

When your income varies from month to month, tracking is everything. You need to know exactly what’s coming in and what’s going out. The more you track, the more you understand your financial patterns, making it easier to predict and prepare for future fluctuations.

✅ Action step: Use budgeting apps like YNAB, Goodbudget, or a simple Excel spreadsheet to track every cent that comes in and goes out. Review it weekly, and use the data to adjust your budget and saving goals.

Step 7: Diversify Your Income Streams

One way to add stability to a fluctuating income is to diversify your revenue streams. If you’re a freelancer, consider branching out into related fields, passive income or even selling products. The more diverse your income, the more likely you are to ride out the waves of instability.

✅ Action step: Take some time to brainstorm additional income opportunities. Could you turn a skill into an online course? Write a book? Sell stock photos? You can even have a little more fun with it and sign up for KashKick. It’s an easy, flexible way to earn some extra cash by completing microtasks in your free time! 

Step 8: Plan for Taxes Year-Round

This one isn’t the most fun, but it’s crucial. If you’re self-employed, the tax man is coming for his share, and he doesn’t care if your income is up or down. 

The solution? Plan for taxes all year-round.

✅ Action step: Set aside a percentage of every payment you receive—typically 25% to 30%—into a separate account dedicated solely to taxes. If you’re not sure how much to save for taxes, consider hiring an accountant to give you a more calculated estimate. You’ll be thanking yourself come tax season!

Common Budgeting Mistakes With Irregular Income

When you’re learning how to budget on an irregular income, it’s easy to fall into habits that work for salaried employees—but this will backfire when your earnings inevitably fluctuate. 

Make sure to avoid these common mistakes to make budgeting less stressful and more sustainable over the long term.

• Don’t budget based on your best months. Although it’s tempting to plan your budget around your highest-earning months, it’s not realistic and can quickly lead to overspending when work slows down. 
  
  ✅ Instead, base your budget on your lowest or more conservative monthly income and treat your higher-income months as opportunities to save.
  
  
• Always save extra during periods of high income. Again, it might be tempting to enjoy the extra cash you earn during good months, but it’s important to save during strong months.
  
  ✅ Automatically tuck away a percentage of each payment you receive. Your “Irregular Income Fund” will help bridge the gap between busy and slow periods.
  
  
• Avoid mixing business and personal finances. Combining your business and personal money makes it extremely difficult to budget, prep taxes and plan long-term.
  
  ✅ Set up separate bank accounts for business income, savings and personal spending, then pay yourself a salary (see Step 4). This makes tracking your expenses way easier!
  
  
• Plan for tax season. As a self-employed person, it’s crucial to prepare for taxes year round. If you don’t, you risk getting hit with a huge statement come April.
  
  ✅ Set aside a portion of each payment you receive (25% to 30% is often recommended) in a separate account. 
  
  
• Don’t rely on one income source. Relying on one income source or one client can make budgeting more difficult and put you in a risky financial situation.
  
  ✅ Instead, diversify your income when possible. Even small supplemental earnings from a rewards app like KashKick can help! 
  

Take Control of Your Finances—One Step at a Time

Budgeting on a fluctuating income doesn’t have to feel chaotic or restrictive. With a little planning, some smart financial moves and a sprinkle of creativity, you can take control of your finances—no matter how unpredictable your earnings may be! 

Always remember: It’s not about being perfect; it’s about being prepared. So, embrace the challenge, make it fun and watch your financial confidence soar.

Happy budgeting!