Money Management

Irregular Income And Unplanned For Expenses

I have created a budget based on our household income. My wife and I both receive monthly checks, so our budgeting process is pretty straightforward. Each month, we sit down and talk about our upcoming expenses, and the we allocate funds accordingly. We use cash for daily expenses, online bill pay to pay monthly bills, debit cards for groceries and gas, and our online savings account for non-monthly bills, short-term savings, and non-retirement savings. Our budget changes very little from month-to-month, but we still sit down to discuss any “out of the ordinary” expenses. For instance, our daughter is a gymnast and the expenses associated with gymnastics vary. Still, our budgeting process has become rather “routine” and only takes a few minutes to do.

Of course, life does not always go according to “plan”. Each month we seem to have at least one “unplanned for” expense. Now, we have created a “miscellaneous” category in our budget, but we only allocate a small amount in that category. Also, especially now that I make a little money from my blogs, we also have “irregular” income. Even before I began blogging, I would occasionally receive extra income from freelance work, as a birthday gift, etc. Instead of “over-thinking” our budget process, we simply combine the “unplanned for expenses” and the “irregular income” into one, easy-to-manage system. Any money that I receive in the form of irregular income goes directly into my savings account. Any unplanned expense that I might have gets paid for out of my savings account. (Of course, I have to make a transfer to my primary checking, but you get the point.) At the end of the month, any “left over” irregular income gets allocated to long-term or retirement savings. Also, if irregular income does not “cover” unplanned expenses, money budgeted for “miscellaneous expenses” will be used.

I am super-strict about my salary, and I budget “to-the-penny”. I treat irregular income a bit differently. I allow myself to have a little fun, buy a few “extras”, take my wife out to dinner, etc. In other words, I have a bit of a “life”!

How do YOU manage irregular income and unplanned for expenses? Leave a comment and let us know.

11 thoughts on “Irregular Income And Unplanned For Expenses

  1. I’m not nearly as strict on the budget as you are. I have all of our monthly expenses and savings budgetted out and I have found that on average we go through another $500 every two weeks. This covers gas, car repairs, food, entertainment, diapers, misc, etc. My paychecks come every two weeks and my wife’s come twice a month so it is a bit of a balancing act. I plan each month and move over any excess to our Money Market. I’m sure there are some places we could save if we had the time to spend on a detailed budget, but we just don’t right now. We’re fairly frugal so I don’t think there is much waste.

  2. We budget for ALL things coming in and out like you do. But for the irregular and unplanned stuff, we also have a category in MS Money that we call our Buffer. Right now our Buffer category is budgeted at $200/month. It’s great because if we don’t have any unplanned expenses etc., then we’re under budget for that month – meaning more money to apply elsewhere for next month. Either way, we budget for worse-case-scenario. We know exactly what we have budgeted going in and out, and if we go under budget, even better.

  3. We’re self employed in a commission-only industry, so our income varies every month. I also work at the library – that part of our income is steady. The way we budget is to have a set amount going towards our savings and investments (currently about $1200/month) as soon as we get paid. Then we take out money for set expenses, like the mortgage and utilities and the small credit card debt that we’re working away at. What’s left over is the variable part, and that’s what we allow ourselves to use for food, shopping, gas, fun, etc. That’s the amount that we can spend on our regular credit card each month. We pay off that card monthly, and we check the balance every day to make sure we’re not going over the amount that we can pay that month.

  4. My income varies month to month right now, so its difficult to budget to the penny. I have over 300K in debt, so, needless to say, things are a wee bit tight! I’m currently trying to build up a small savings account pot, just in case something really came up (besides another creditor calling!).

    I’m hoping to be able to budget down to the penny within a few months.

  5. I am not as strict as you, but do have simliar budgeting technique. I get paid every 2 weeks, pay all monthly bills thru online checking, use debit attached to a different account ($$ transferred from checking) for gas, groceries, and misc expenses between paydays. My irregular income, generated thru blog, ebay or craigslist is transferred direct to ING account as savings!!!

  6. I have a budget template that I tweak for every month, adding in additional income and expenses as necessary. If additional income is not matched by additional expenses, it goes into either savings / investments or

    Most categories of expenses have their own pot anyway, if there is more expense than income, it usually comes out of the “fun” pot.

  7. My wife and I both work, though my wife’s job is part time (she works from home) as she is a full time mom; and I have a side job as well. So we do a detailed budget for all expenses based solely off of my primary job’s paycheck (paid every two weeks).

    Any money left over from my main check as well as all other income (Wife’s part time job, my side job, ebay, etc…) has been going to pay down debt. This method has allowed us to become ‘consumer’ debt free this month (still owe on the house)!

    Moving forward, we will continue to employ the same method, however the ‘extra’ income will now be directed towards our emergency fund… yes, we are Dave Ramsey cult followers ;-). Once that is done we will move on to a church commitment we made and then on through the baby steps.

    (I love the podcast by the way)


  8. I try to budget out all of my “unplanned expenses”, so I’m never really surprised by anything. I’m pretty strict budgeter too–with irregular income, i give a portion of it to charity and the other portion goes toward any debts. I’d put it toward debt over any sort of saving goal or account.

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