Budgeting on unstable income

I would start with the very basic of necessities that MUST be paid. And I would make sure I had 3-6 months (at least) saved up for a "down" time for at least those. And I would pay ahead (pay lump sum car insurance rather than over time for example) if at all possible so you have a cushion for the bad times.

Then I would prioritize other things and put away as much as I could each time we got any kind of pay that was more than the very basic needs.

I would add in fun money/vacations/etc only that 3-6 months was available and after 401k/college/etc savings.

I would try all I could to NOT accrue Credit Card debt in the down times because then you are always in a catch-up mode when there is a good time. But if you have CC debt I would try to pay it off while not putting anything else on....

We've been on a flexible income a few times and I could only deal with it this way. Others might be comfortable with CC debt that can be paid off etc. I just don't feel future income is guaranteed (even for a salaried same pay every week type job)

I'm also a Dave Ramsey fan for matters of budgeting. Here's an article on his site about budgeting an irregular income, and if you search his site there are also audio clips from his radio show addressing this and probably some example forms. www.daveramsey.com/blog/how-to-budget-an-irregular-income/

You can listen to his podcast free, all 3 hours daily. His books are also available in most libraries and are a great resource for budgeting.

Thank you for suggesting this. I am going to see if I can find his podcast. I'm really nervous right now because DH has taken a job doing road construction so I am trying to navigate banking extra in the summer to plan for a winter lay off.

When you have irregular income, you have to prioritize. If I only have enough to cover the most important thing, what would that be?

From what I read online and even this forum; people aren't saving money for unexpected expenses and for their retirement. I believe that it would benefit everyone if they truly understood what it means to have a savings account. Saving is a component to a budget. When you budget for your cable bill, you need to budget for your savings. We budget and have always saved more than 15% of our take home. That is IN ADDITION to contributing 7% to our 401K. This savings is not for an upcoming vacation or purchase, it is saving for the unknown. For the past 38 years, we seldom touched that annual budgeted savings. It is amazing what we have saved, it is called living below your means. We had major unexpected expenses on our house this month to the tune of $7K to replace our heat pump. This happened after we bought new furniture, new appliances and paid for a vacation lodge for a week. If it wasn't for our discipline, I would be in tears. It is such a great feeling going to bed and not worrying.

As far as retirement, everyone should know what they spend now so they can figure how much their retirement savings needs to be when you retire. If you want to continue living like you do now, you need to know how much you are going to need outside of your monthly Social Security check. Saving for retirement doesn't start five years before you retire, it needs to start when you are in your twenties.

The only way we have savings is because it is in our budget, along with the mortgage, car insurance, etc.

Husband is a Ramsey fan. We don't budget and we are debt free. This might sound snippy but it's not meant to be. I tell my friends the same thing who have fluctuating incomes. If you have a big month, pay your normal monthly expenditures and sit on the rest of the money. Don't look at it like extra money for the month. Leave it there till the next low month. Look at what he made as a whole last year. Divide that by 12. use that number as your "income". So if he makes 3000 one month and only 2000 the next look at like he actually makes 2500 a month.