4 Ways to Save Money With a Fluctuating Income

By Jacquelyn Pica

Getting paid a steady salary is great, but it’s not a reality for everyone.

We live in a world of freelancers, independent contractors, side hustlers and commission-based jobs. Although this type of work doesn’t offer the same consistent paycheck, there are still ways to budget and save money when you have a fluctuating income.


  1. Calculate Your Baseline

Figure out the absolute lowest amount of money you can make in one month to still get by. Do this by calculating all your necessary expenses, including rent, utility bills, gas and groceries. Items such as gas and groceries might vary, so take a look at how much you’ve spent in the past few months to get a general idea of what it will cost. In this baseline number, also include important payments such as student loans or credit cards. While you don’t technically need to pay those to survive, they’re still a necessary expense. Plus, you don’t want your credit score to be affected just because you forgot a line item in the budget.

Once you have all of those expenses together, take a look at the non-essentials: eating out, seeing a movie, streaming services, etc. Examine your bank account to see what you spent on these categories last month, and include this as a section of your budget, too. It helps to have a ballpark range of your spending in all categories, especially so you know what could be cut back on if needed. >> Learn how to create a budget.

  1. Set Up Automatic Savings with Rules

When you have a steady paycheck, it’s easy to set up a transfer of $X every time you get paid. But with a fluctuating income, automatic savings aren’t as easy to manage. What if you get one check for $300 and another for $2,000?

This is where automatic savings apps come in. Most of them let you set up a rule that will save a certain dollar amount or percentage as long as your deposit is over a certain amount of money.

Going with the two check amounts above, say you need all $300 to pay bills but could manage to save a bit of the $2,000. You could set up a rule along the lines of “save 5 percent of any deposit over $1,800,” and it will go right into your savings. This way, you aren’t saving money from every small deposit, and instead just saving once from your biggest paycheck. The percentages and deposit amounts can be customized, allowing you to adjust savings goals as needed. 

  1. Use an Old-School Spreadsheet to Budget

Yes, I know, there are tons of budgeting apps that can automate your savings, budget and even pay your bills for you. Even with all this new technology, a simple spreadsheet is probably a better option if you have fluctuating income. With a spreadsheet, you can keep track of all your income and know exactly how much you can afford to save and spend. Plus, budgeting apps only catch what’s in your bank account. You might receive cash tips or prefer to cash a paycheck rather than deposit it in the bank.

Get started with a budget template for Google docs -- such as this or this -- or Microsoft’s official budgeting template for Excel. Insert all the numbers from what you calculated in Step 1, including essentials and non-essentials. Once you’ve figured out what budgeting template you want to use, pick a budgeting method. A few popular options include the 50/20/30 rule and zero-sum budgeting.

  1. Pay Yourself a Salary

This might sound a bit strange at first, but it really works. Take all the income and bonuses you receive and put it into a business account separate from your checking. Based on the amount of money you identified as what you need to get by, plus a little bit of fun money, deposit that amount from the business account into your checking. You’ll use your checking account to pay the bills

Paying yourself is helpful because the separate holding account will grow, especially when you have a good month, and you will always have the amount you need to pay the bills and live a comfortable life. Whatever is left over in the holding account can be used to pay extra toward debts, go into an emergency fund or be used as a cushion for slower months.

It might seem hard at first to budget with a fluctuating income, but these four steps will get you on the right track. By knowing how much money you need, budgeting accordingly and paying yourself a salary, you’ll be managing that income like a pro in no time.

Jacquelyn Pica is a staff writer at The Penny Hoarder. Find her on Twitter @JacquelynTPH.

Let America Saves help you develop good savings habits so you can feel confident about your finances. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.


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