How To Budget When You Don't Have a Regular Paycheck



Budgetnista, I don’t have a regular paycheck because I’m: self-employed, have irregular hours, never know how much I’m going to make, sooooo…. How do I budget?! I’ve been getting this question a lot lately, so I decided to write a post to answer it. – I was once a teacher and brought home the exact same paycheck every 2-weeks. As a result, budgeting was fairly easy. I knew what my bills were and what my monthly takehome pay was, so my (financial) life was pretty simple.

Fast-forward 5 years. I now do “The Budgetnista” full time and each month’s income is completely different from the month prior. My first year of full-time entrepreneurship was a rocky one. I didn’t know if I was coming or going financially. Then I finally figured out a system that worked for me and it can work for you too if you don’t have a regular paycheck.


How To Budget When You Don't Have a Regular Paycheck

1) Calculate your Financial Baseline: Your financial baseline is how much your life costs you each month without the bells & whistles. It’s your budget, excluding eating out and entertainment and most other non-necessities. Not sure how to figure out your financial baseline? Use Day 1 of my bestselling book, The One Week Budget, to get you up and running… don’t worry, it’s FREE HERE Once you know your financial baseline, you now know how much you need to make for your personal finances once your business expenses are covered (if you’re self employed). Your financial baseline will also help you to calculate how many months you have in savings to cover  those months when business is slow or your income is low. But more about that later…



How To Budget When You Don't Have a Regular Paycheck

2) Be Like the Squirrel: Squirrels are super-smart savers. When acorns are plentiful, they work their hardest and gather as many as possible. When acorns are scarce, they hibernate and live off of the nuts they’ve collected. We should all strive to be like the squirrel, especially entrepreneurs. Every business has a cycle. For The Budgetnista, I make the majority of my money in the warmer months. I’ve learned to work really hard and excessively save during those months, because once the weather gets colder, my income drops. During cold months, like the squirrel, I do less work (because less work is available), and I live off of the savings I’ve set aside. Even if you don’t have a business, you can still squirrel away your money when times are good and live off of your stash when things aren’t.



How To Budget When You Don't Have a Regular Paycheck

3) Live by Percentages: Those that receive a regular paycheck can live by exact amounts. They can calculate exactly how much they can save each month and how much they can set aside for bills, going out, groceries, grooming etc. But for those of us with irregular incomes, we have to live by percentages. What does that mean? That means each time I’m paid, I allocate a percentage of my income to different categories.

My current percentages and categories are:

45% : Expenses (bills, entertainment, groceries, grooming etc.)

20% : Taxes (Uncle Sam. This is the percentage amount my accountant suggested I set aside. My tax rate is higher than 20%, but after spending on my business throughout the year, I end up paying about 20% on the total amount I’ve made. Those that are self employed, pay taxes AFTER business spending, not before like 9-5 salaried or hourly workers who get taxes taken out BEFORE they receive their income.  I also have an emergency and business saving account that I  can use to cover the rest of what I owe during tax time if need be.)

20% : Retirement (investing)

10% : Give (donating)

5% : Travel (leisure)

If you receive fluctuating pay, you should decide what the categories are in your life and assign a percentage to each. Then each time you’re paid, allocate your income based upon percentages. You can do this with each payment received or do so weekly/biweekly/monthly depending on how frequently you receive payments. At the very least you should have Expenses and Retirement allocated. Set aside your the money for your Expenses category in the business/savings account I mention in the  about in the “Pay the Pot” section below.


How To Budget When You Don't Have a Regular Paycheck4) Separate to See: Once you arrange your finances by percentages on paper, it’s time to get organized in real life. The best way to gauge how close you are to achieving your financial goals is to house your money in different bank accounts. I have a Bills Account, a Spending Account and savings accounts for each of my savings categories.

You probably already have a Spending Account. It’s the checking account linked to your debit card. Next, you should open a Bills Account. This is a checking account that’s not linked to your debt card (this will prevent you from “accidentally” spending your bill money on your cookie addiction. Use your budget to calculate how much money you need to allocate to your Bills Account each month.

As mentioned before, having separate accounts for each savings category is a great idea! *pats Self on back* Here’s how to make that happen with the money you want to save… Open up free saving accounts at an online-only bank like Ally Bank. Use to help you find the best, FREE, bank for you.

Rename each account based upon your financial categories and send your allocations to each account according to your percentages, then watch your money stack! 🙂 You might be wondering, why an online-only bank? Online only banks take 2-5 business days to transfer your money back to your regular bank. Do you know what that means? That means no more impulse spending with your savings!


How To Budget When You Don't Have a Regular Paycheck

5) Pay the Pot: Once you use your squirrel powers to build up your (business) savings, it’s time to begin to pay yourself regularly. Use your budget to calculate what your personal, monthly spending is (include bills, entertainment, grooming etc). Once you identify how much you spend each month, pay it to yourself from your business/savings account aka THE POT. You can pay yourself monthly, biweekly or weekly. The choice is yours. What’s important is that you no longer get paid directly from your clients or income provider. Instead, your clients/income provider pays your savings account (THE POT), the money sits in that account, then you pay yourself a regular income from it. The trick is to pretend like you have a 9-5 and give yourself a regularly scheduled “paycheck”.

How To Budget When You Don't Have a Regular Paycheck

6) Systemize: Now that you’re saving aggressively when things are good, paying yourself vs. waiting to be paid, living by percentages and have a different bank account for each of your financial categories, it’s time to automate the process. Creating a system is going to be essential for your financial success.

Begin by setting aside time on the same day each week to review your finances and make your transfers, if applicable. Also, make sure to automate your bill payments from your Bills Accounts. Most banks offer online billpay for free. Use it. Instead of letting companies come into your account, instruct your bank to pay each of your bills on the same day each month. You’ll only have to do this once…. Did I mention it’s free? Of course I did… I’m The Budgetnista. *insert giggle*

Look for other ways to automate your finances. You can automate transfers, like the transfer from your business /savings account to your personal account, now that you’re paying yourself. Consider it your Direct Deposit “paycheck transfer”.


  How To Budget When You Don't Have a Regular Paycheck

(Sidebar: remember to add your own categories and percentages in the sample income grid)

Live richer,



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The Live Richer Academy coursework can be worked on at your own pace and we’ll always have something new to offer you no matter what financial stage you’re in right now. 

Membership also includes VIP access to our private community forum and exclusive members-only online events, like our live, weekly “Ask the Expert” series.

Grab a special discount to the LIVE RICHER ACADEMY at

About the Author Tiffany Aliche

Tiffany “The Budgetnista” Aliche, is an award-winning teacher of financial education, America’s favorite, personal financial educator, and author of the New York Times Bestselling book, Get Good with Money. The Budgetnista is also an Amazon #1 bestselling author of The One Week Budget and the Live Richer Challenge series and most recently, a children's book, Happy Birthday Mali More.

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  1. Budgetnista, we are all dying to understand how you’ve gotten down to a 5% tax bill. For most of us, FICA alone is 12.4%, and as far as we can tell, it is not offset by anything whatsoever. Even setting that aside, a 5% tax rate is remarkable. Who is your accountant? Is she taking new clients?

    1. CP, my tax bill isn’t 5%. That’s how much I save so I don’t get hit so hard when I have to pay them. I’m working up to saving 15% of my total income toward taxes. For now, I use the 5% I have saved in my account, then I usually use a new payment from a contract to make-up the rest during tax time.

      Also, most people’s tax rate is 30%, but because I work for myself it’s much less, around 15% – 20%. The reason is because unlike salaried workers, self-employed individuals get to dictate how much taxes they pay. They do so by deducting all of their expenses, then paying taxes on what’s left, not the other way around.

      And I’ve sent so many people to my accountant that he can’t take anymore. Lol!

      1. Budgetnista, you are lucky to have a contract every year at tax time that allows you to make up for the taxes that haven’t been set aside throughout the year, and that you don’t need at that moment to pay your immediate business expenses. Setting that aside, though, you are probably aware that we self-employed people are required to pay estimated taxes on our revenue through the year. If your estimated taxes underestimate the tax owed by more than 10% — a certainty if you are only preparing yourself for a 5% bill on your taxable profits — you will owe the IRS a penalty. While there are circumstances in which it may be financially advisable to take on the IRS this penalty in order to keep your cash — circumstances that have been true for no businessperson I know since the recession — to counsel people to set themselves up for this is irresponsible. It’s hard to believe that a certified accountant is encouraging you to take this approach; I say this not only because a high tax bill can condemn a fledgling business, but also because paying the IRS penalties is about as fiscally sensible as paying credit card interest on a fling-purchase of something that has no possibility of any return into the profit of your business. I encourage you to revisit this budget template, because it could cause a LOT of woe for people new to the world of managing their self-employed lives.

        1. CP, you’ve made a number of assumptions.

          1) I didn’t advise anyone on what percentage to set aside, I just gave my current percentages as a example. This is what I wrote,

          “If you receive fluctuating pay, you should do the same. Decide what the categories are in your life and assign a percentage to each.”

          It is up to the individual to set aside their own percentages. Just like I have an account for giving and travel, those accounts are personal to my desires and beliefs. I wouldn’t expect that my readers would feel obligated to give away 10% of their income or set aside 5% for travel. The same holds true for my tax account.

          2) I set aside 5% of my income to HELP pay my tax bill. I also have an emergency account and a business savings account that I use to make up the rest of my tax bill when tax time comes should my contracts not be enough. The purpose of my tax account is to HELP with the tax bill when it comes, not to cover it all. I’m working toward increasing my %, but currently I still need to keep more money on hand to keep my business running.

          3) Never once in my post did I advise anyone to pay less than what they owed for taxes and to risk paying a penalty to the IRS. My accountant has never advised this and neither have I. Just like me sharing that I give 10% or travel with 5% is not me advising that anyone do the same. I’m merely being transparent about how I currently allocate my business income.

          4) Thank you for your feedback. Although I won’t change what I honestly set aside to HELP for taxes. I will add an explanation that the 5% I set aside is to help with my tax bill, not to cover all that I will end up paying.

  2. Thank you for this article! I'm starting a brand new job soon and personal finance has been on my mind HEAVY lately. I already know THAT I'm supposed to budget, it's just that I have been barely getting by for so long that I'm not used to doing anything outside of paying for essentials – food & shelter forgoing all else – including caring about my credit score, having credit cards or paying my student loans. I also don't have a car loan any longer. I have now begun exploring investing in real estate and of course credit score counts in that arena, so I'm paying a bit more attention to it. The percentage breakdown is just what I was trying to put together for myself – a baseline savings/investing/spending schedule. Now I feel like I'm READY to start my new job and INVEST money in the ways that will benefit me most. Thank you Tiffany!

  3. This article is SO helpful! I’ve been freelancing, self-employed, and inconsistently paid for the last decade and have gotten used to going without what I and my children need, much less what we want… and then splurging willy-nilly when a windfall of cash comes in. Having a system like this in place is getting ready to save my a$$, I can already tell. 🙂 Good looking out, Tiffany!

  4. I feel in this short amount of time I’m on the right track since joining group. I have distinguished accounts for bills & personal w/an emergency savings (with not enough in it to cover a real emergency) *sad face* I also started the Ally. My job just started 401k & of course I enrolled w/the 5% they’re matching! I have little to no CC debt (what I was working on b4 group & I don’t pay interest). It’s just hard for me to be optimistic. B4 group most of my earnings from OT were wasted cause I put in my head that I was deserving of the “things” I wanted & I was NOT saving. As usual when things start going too good (GROUP) I get paranoid & I’m staring to think “oh my if my OT stops now, I’ll be screwed!” I’m gonna get this together! Told my AP that from now on ALL extra is going to savings oppose to splurges (living beyond my TRUE means *spanks my own hand!* Allowing myself to become dependent on the income instead of saving has played a MAJOR role in missing time with friends & loved ones. I’m so happy I was introduced to the group & you. I really appreciate what you’re doing! Again… I THANK YOU 🙂

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