How Do I Manage Money When My Income Isn't Predictable?

Truth is some months the money flows in, then other months hits a trickle.

At best.

If your income is unpredictable, maybe because you're a freelancer or

maybe you run a small business, or you work on commission, you know the

stress of that feast or famine cycle.

You're asking yourself, how do you budget?

How do you pay bills, and how do you really find peace when you don't know

exactly how much you'll make next month?

Stick with me today 'cause I'm gonna tell you just how to do that on today's show.

Hey there.

Welcome back to your Daily, financially Confident Christian.

I'm Ralph and I'm glad you're with me today.

This show is all about helping you answer that question, how can I become

a financially confident Christian?

And we continue on our series today, dealing with the stress of money

worries, stress and money worries are two things that go hand in hand.

Yesterday we started talking about income.

We, We made a decision to assess just where we were, and then we

started talking about some potential opportunities to grow our income.

And this is a big area of focus for many people.

Well, today we're gonna move into a specific income challenge, and this

is one that's faced by a great deal of people in our audience, especially

those people who find themselves being small business owners and those who

have those variable income roles.

Things like freelancers and people who maybe who are doing sales professionals or

gig workers or side hustle entrepreneurs.

And you ask yourself this very difficult question.

How can I effectively manage money when my income isn't the same every month?

And the truth is, this does bring a unique set of stresses.

Now listen, you know the drill, if you have irregular income, one month is great.

Maybe you landed a big client, or you had this great month for sales

and you feel this sense of relief.

Maybe you even feel a little flush, if you will.

maybe you tend to spend a bit more than you really should that month, but then

all of a sudden the next month is slow.

And guess what?

Those bills are still due, but the income, it's just not there.

So what do you do?

You dip into savings, and that's assuming that you have some.

And all of a sudden you start to feel this stress again about covering everything.

And maybe you postpone paying off that debt.

Maybe you're working actively to pay off your debt, or maybe you're

working actively to save money.

And when you have that income, that's not what you expected.

you postpone paying off that debt or you postpone savings for goals

and this unpredictable swing.

And it's really a swing between feast and famine.

And I get it.

I've lived that myself in my business, and it's a major struggle.

And here's a simple truth.

It makes traditional monthly budgeting feel almost impossible.

And what I think it really does, it leads us to be reactive in our spending

instead of being planned in our spending.

And it truly does create constant uncertainty and anxiety because

you are always wondering if you're gonna have enough to meet your

obligations and meet them consistently.

A lot of people share with me, they say, Ralph feels like I can never

get ahead because any progress I made in a good month will all of a sudden

Ralph gets wiped out in a slow month.

Well, here's the thing you need to understand.

Managing irregular income does require a different approach.

If you've got a steady paycheck, if you get paid every week or every other week,

it's a little bit easier to manage that.

If you don't have that income, if you've got irregular income, that does

truly demand extra discipline because during the good times, you've gotta

be prepared for those lean times.

I call this forward thinking stewardship.

It's actually talked about in the Bible.

Think about the story of Joseph in Genesis chapter 41.

I'm not gonna read that story today.

I'm gonna encourage you to do that.

But he didn't just enjoy the seven years of that abundant harvest.

During that time, Joseph saved and he stored up grain

during those abundance years.

'cause he knew he needed to prepare for those seven years of famine that followed.

See this was a simple act of saving from a place of plenty

to prepare for that scarcity.

And it's a powerful biblical model for managing those unpredictable resources.

every day I talk on the show about being diligent and being

diligent in our stewardship.

So yes, we have to trust God's provision, not just in the moment,

but over all of our different seasons.

And we've gotta learn to use that abundance he provides today to

create stability for tomorrow.

So you might be asking, what can we do?

How do we bring stability and peace to your finances when your

income is anything but stable?

Well, I've got a solution today, and I'm gonna tell you to do this.

I think the best thing to do is implement a budget and saving

strategy design specifically for those of you who find yourself in

that irregular income situation.

Focus in on building what I'm gonna call a consistent buffer.

And it's a buffer to smooth out the highs and lows.

This approach, if you're able to do it, is gonna Shift you from reacting to your

income and that income volatility to really being proactive in managing it.

Okay, so here's your one action step for today, specifically laser

focused on managing irregular income.

The first thing I want you to do, and this one is crucial, you need to

go calculate your average essential expenses, go back to your budget.

Go back to that financial snapshot that we created.

Identify your absolute essential monthly expenses.

These might be things like housing or maybe the minimum utility costs you gotta

eat, so you gotta put basic food on there.

If you've got debts, you need to at least be making the minimum

debt payments, and don't forget, include transportation costs.

Then I want you to calculate that total amount needed each month, and

that is just to cover the basics.

I'm gonna call this your baseline budget, so you got that number in mind.

The next thing you need to do is set what I call a buffer fund goal.

Your primary goal is to build a separate savings account.

Now, this is not your emergency savings account, but this is designed to

cover maybe one, two, or three months of those average essential expenses.

Again, this isn't your emergency fund.

It can overlap, that's fine.

But this buffer is specifically smoothing out those income dips.

I want you to write down your target amount.

For example, maybe for you, you want two times your average essential

expenses, so write that down.

This way you know how much your average expenses are per month, and you're

saying to me, Ralph, I wanna have at least two months of those set aside.

Then what I want you to do is during those months, when you have good months,

you know you've had a good month of sales, or you landed that contract or

landed that client, that maybe is going to give you a big upfront payment.

You gotta building that buffer in those high income months.

Aggressively fund it.

Hey, if you've got an extra month, don't think to yourself,

Hey, and I've done this.

You land that big client, Hey, let's go out to eat every night this week.

Or Let's go buy that watch we wanted, or that, that electronic

that we couldn't live without.

I want you to instead think about aggressively funding that buffer

fund until you reach that goal.

Of course, you're still gonna pay your essential bills, but then

send any extra money directly to that buffer savings fund.

And the reason you're doing that is the final step here.

When you have those low income months, that's when you can go grab

that money from that buffer fund to cover that shortfall in your, you

know, in your essential expenses.

What does this do?

It prevents you from going into debt.

We don't wanna find ourselves constantly going into debt when

we have these low income months.

It also completely reduces or eliminates that stress of covering the bases.

You're not worried about, am I gonna have a roof over my head?

Am I gonna be able to eat and put gasoline in the car?

It also helps you get past that feast or famine stress cycle.

It creates a beautiful financial cushion that will allow you to pay your essential

bills consistently, regardless of how much income came in in that specific month.

And it really does help replace that uncertainty of that unpredictable

income because you've got a, you've got a stable planned buffer that can

bring you significant peace of mind.

Well, let's pray together now.

Father, God, thank you for providing for us even when our income isn't predictable.

And Lord, we confess that stress and anxiety come from that feast or

famine cycle really does bother us.

So, Lord, we would ask that you grant us wisdom and grant us

discipline to manage our irregular income and manage it effectively.

Help us to save diligently during those times of abundance that you

give us, that way we're prepared for those times of scarcity.

Grant us peace during those low income periods when we might feel

like we can't trust, and just give us trust in your consistent provision

through the many seasons of our lives.

Guide us in being wise stewards of every dollar that you send our

way, regardless of when it arrives.

And we ask this in confidence.

In Jesus' name, Amen.

Now listen to me.

Managing irregular income takes intentionality and it takes discipline.

It's, it's not simple, it's not easy.

But if you add intentionality and you add discipline and implement that buffer

strategy we talked about today, you can dramatically reduce the stress of that

unpredictability because guess what?

You're taking control of your financial flow and you're not just reacting.

Now if managing irregular income is a challenge that you face, maybe

you know somebody else that's facing it too, and I'm gonna encourage

you to share the show and share this particular episode with them.

You can find out all of our resources and connect with our show at our

website that's at financially.

Confident christian.com, and I've got a special gift for you on the journey.

For the first 100 listeners who go to financially confident

christian.com/master, I'm gonna give you a free copy of my book.

It's called Mastering Your Finances.

Now, this is a quick, it's a powerful read.

Design is a starting point to help you break that cycle of financial

shame and step into confidence.

Again, you get to that by going to financially confident

christian.com/master.

Go get your free copy today.

Now tomorrow we're gonna be talking about lifestyle creep.

Yeah.

How spending often increases as income increases.

And we're gonna talk specifically about how to avoid that trap to protect

the progress that you're making.

You don't wanna miss it.

So make sure you join me tomorrow.

Now, let's all go out there and be financially confident.

Christians, you can do this.

I have confidence in you.

Have confidence in yourself.

Stay financially savvy.

God bless you, and you have a great day today.