3 Tips to regulating life with an irregular income

By Procom

tips to saving money
“I always wanted an awesome boss, so I started working for myself.”

That’s not a famous quote, but it probably should be. It’s a sentiment likely shared by every entrepreneur or Contractor who lives by paying themselves. But when it comes to life’s money matters, money…well it matters. But it doesn’t have to be feast or famine if you plan your finances. Try these tips to regulate life with an irregular income.


  1. Determine your minimum income

If you’ve been a Contractor for at least one year, take a look at your income reports to determine the bare minimum income—which is just that, the absolute minimum you’ve made over those 12 months. You’ll be able to get a pretty good idea of any seasonal fluctuations in your incoming finances. If you have a couple years’ worth to analyze, you can notice the patterns of which months are the most and least profitable and plan accordingly for any potential slumps.


  1. Drill down on your monthly expenses

There are four types of expenses a month: set, variable, debt and business. Your set expenses are things that must be paid each month like your mortgage or rent, car payments and utilities. Your variable expenses are ones you must budget for like groceries or entertainment, and debt expenses account for things like your minimum credit card payments. But don’t forget about your business expenses! These are costs related to things like business supplies, travel and dining.

Preferably, your expenses should not be more than your minimum monthly income. If they are, you might want to prioritize your expenses to see which ones are vital and which ones aren’t (like your top tier cable TV subscription).


  1. Save the difference

To save yourself some worry, plan to have at least three months’ worth of income in a savings account during a potential famine situation. You may want to also set up a few different bank accounts to keep your money organized:

  • Tax account: You’ve got to face the inconvenient truth that your taxes are higher. But if you’re looking for a pretty solid benchmark plan for the tax man, you should squirrel away 30% of your income into a tax account.
  • Retirement account: Another unavoidable truth about being a contract worker is that if you don’t save for retirement, no one else will. Aim to deposit 10% directly into a retirement account. Your future self will thank you.
  • Personal checking: Here’s where you can pay yourself. Take the monthly budget amount you calculated during tip 1 and use it to give yourself a monthly paycheck—be consistent month over month.
  • Personal savings or Business checking: After you pay yourself, any extra money should stay in your business checking to continue building that three month buffer.


Sometimes the best things in life really are free—like peace of mind knowing that you’ve got life (and your expenses) covered.

by Procom

Let Us Know What You Thought about this Post.

Put your Comment Below.

Subscribe to the blog