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Managing finances can be a challenge when your income isn’t consistent. If you’re a gig worker, freelancer, or shift worker, the unpredictable nature of your payday can lead to financial stress if you can’t find a way to manage and stay on top of your finances.
While it might feel daunting, there are effective ways to budget for irregular income. With the right strategies, you can stay on top of your money and plan for a more stable financial future.
Here are some tips to help you get started.
Start by tracking your income over a 3–6 month period. This can help you identify trends, such as peak earning periods, like holiday seasons for retail workers or ride-share drivers, and quieter times. You can then use this information to budget accordingly and ensure you don’t spend more than you can afford.
Let’s take a practical approach to this – one thing you could try is to calculate your average monthly income based on this data. For example, if you earn $3,500 one month and $2,200 the next, plan your budget around the lower figure to avoid overspending.
Tip: Use budgeting tools available in Beforepay or your internet banking apps to track your income and get a clearer picture of your income patterns. Beforepay can also help you tap into your wages with the Pay Advance, so you can access extra funds in advance to handle any unexpected expenses.
Differentiating between your expenses can help you better understand your spending patterns. Also known as non-discretionary (essential) or discretionary (non-essential) expenses, having a clear distinction can help you more easily identify what expenses to prioritise and how to plan ahead for any fluctuations you may experience in your income.
Here’s a breakdown of what some of these expenses might look like.
Non-discretionary expenses (Essential):
These are fixed or recurring costs that you need to pay to maintain your basic standard of living. They include:
Discretionary expenses (Non-essential):
These are often related to your lifestyle so might be more flexible and open to adjustments when your income is lower. Some examples include:
When creating your budget, start by listing your expenses and labelling them as essential or non-essential, ensure your funds cover your essential expenses first, and note the non-essential expenses you can adjust during lower-income periods.
For example, if your rent is $1,500 and groceries average $600 (non-discretionary), these should be covered first. If you have additional funds over and above this, then you could consider allocating additional budget to entertainment ($100) or hobbies ($50), which are non-essential, and scale these down in lower-income months.
An emergency fund acts as a financial buffer during unexpected situations, such as a car repair, medical expense, or a quiet work period. It ensures you don’t have to rely on credit cards or loans, which can add to financial pressure.
Some tips on building your emergency fund:
Tip: Saving even $50 per pay cycle, if you’re paid fortnightly, can grow to over $1,000 in one year — a solid foundation for emergencies!
Check out our article on how to build an emergency fund for more tips, and set up your Beforepay account for emergency loans 24/7 with Beforepay Pay Advance.
The 50/30/20 rule is a great starting point for budgeting, even with irregular income. But the key is knowing how to adapt it to your changing situation.
Typically how this works is you allocate:
When you have an irregular income, some adjustments you might make are:
Lean months are a natural part of doing shift-work or working in the gig economy or as a freelancer. The key is staying prepared, organised and adaptable so you can make the most of your finances.
The tips we’ve outlined above should help you plan proactively, from reviewing your spending patterns to scaling your budget up and down. You could also consider stocking up on essentials, if possible, such as non-perishable groceries or household items, during high-income months to reduce costs later.
If you’re able, you could also consider different ways to diversify your work to help boost your budget in lower-income periods. For example, you might look for additional gigs or shifts that align with your skills, or consider listing on freelance platforms like Airtasker or Upwork to find short-term projects.
Curious about other side gigs you could try? See our list of side hustle ideas.
Automation is one of the easiest ways to stay on top of your financial goals, especially when juggling irregular income.
Automating your finances ensures your essential bills and savings are taken care of, even if life gets busy or your income fluctuates. This might look like setting up direct debits for your bills or recurring transfers to your savings or emergency fund as soon as you’re paid.
Tip: Using different accounts for your essential and non-essential expenses (e.g. a “bills-only” account) can make it easier to automate and track your finances, as well as ensure your essential expenses are always covered.
Managing an irregular income requires planning, flexibility, and discipline. By understanding your income patterns, prioritising essential expenses, and leveraging tools like Beforepay, you can build a budget that works—even when your income varies.
Disclaimer: Beforepay Group Ltd, ABN: 63 633 925 505. Beforepay allows eligible customers to access their pay and provides budgeting tools. Beforepay does not provide financial products, financial advice or credit products. The views provided in this article include factual information and the personal opinions of relevant Beforepay staff and do not constitute financial advice. Beforepay and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this blog post and do not accept any liability for any loss whatsoever arising from the use of this information. Please read our Terms of Service carefully before deciding whether to use any of our services.