[Budget Worksheet] How to Budget With Irregular Income to Avoid Going Broke

Being self-employed is tough enough without having to learn how to budget with irregular income.

But today, you’re going to learn how to properly budget for success!

Without this skill, your business could be making you broke. You’re not alone in this feeling — it’s something we all deal with as small business owners.

It’s tough to balance finding new work, getting paid, and figuring out where your money should be spent.

You’re constantly doing a balancing act with your bills, financial goals, and transferring money back and forth between accounts.

The worst part about irregular income is that you never know exactly when money from clients or projects will get paid.

Here are some tips on how you can create a successful budget plan, even if you don’t make consistent income.

1. Open multiple bank accounts

As a self-employed business owner you may or may not already be a separate business entity. And that’s OK, you absolutely do not have to be an LLC to function as a business owner.

You can simply be a sole-proprietor, but run your business similar to how you would if you were a separate entity (with a DBA license and separate Tax ID number).

That’s what I did for the first 4 years of being in business, and only recently filed to become an LLC.

However your business functions, it’s a good idea to open multiple bank accounts for various expenses and goals. Use them like digital envelopes where you prepare for upcoming expenses.

I confess that I’m a bit of a bank account junkie but each one of them has a name and a specific purpose.

When you’re dealing with irregular income, you can even out the inconsistency by using this strategy. Open multiple bank accounts for certain goals or large quarterly or yearly expenses.

For example, open a “tax account” for your business and set aside 25% of every single payment you receive in that account. Then when it’s time to pay quarterly taxes, you’ll have all the money saved up.

No muss, no fuss!

No more not having the budget to go to an industry conference, or not having enough money to pay the IRS at tax time. By planning ahead, and using multiple bank accounts you can finally afford the things your business needs.

2. Set up an invoicing system

Obviously one of the biggest hurdles of having irregular income is that you’re never quite sure when you’ll receive payments for work you’ve completed.

You can, however, ease this unknown by setting up an invoicing system and billing period for clients and projects.

Make it clear in your terms and conditions that you require partial payment up-front, or bill on on a monthly basis. Whatever your payment terms are, make sure they are clearly laid out for your clients.

And whenever possible, ask to be put on a recurring billing cycle where your invoices can be paid automatically, or have a direct deposit straight into your bank account each month.

Consider using FreshBooks Invoicing because you can encourage clients to pay via PayPal (which saves loads of transactions fees) or with a credit card of their choosing.

Additionally, you don’t have to send payment reminders as the FreshBooks software does it automatically at the 30 and 45 day marks.

3. Pay yourself a regular “salary”

Let’s set aside the legal stuff about whether or not you’re an LLC or other business entity. No matter how your business is set up you still need to draw down a regular salary to pay your personal bills.

Put yourself on a regular “salary” and set up weekly “paychecks” into your personal or household account.

Then you can split each one of invoice payments and put a certain your earnings straight into your checking account. The renaming funds can then be divvied out for business expenses and taxes.

You could also transfer a lump sum transfer from your business checking account to your personal bank account once-a-week, like every Friday or Monday.

No matter how much or how little your business brings in each week, aim to pay yourself the same amount. Paying yourself on a regular basis can take off TONS of pressure related to cash flow and balancing inconsistent business income.

Experiment with paying yourself a regular paycheck, whether it’s weekly or bi-weekly, and see if the consistent income helps alleviate the pressure of having to come up with money to pay your personal bills.

Not sure what, or how much to pay yourself as a business owner? Check out this guide!

4. Use a calendar for bill reminders

Google Calendar is an excellent tool to use for managing your money and scheduling reminders to pay bills.

You can set up a bill reminder in Google Calendar (or any digital calendar) and have it send you an email to remind you to pay your bills on time. You can also choose the option to have a pop-up reminder if you’re logged into your calendar during the day.

Paying your bills on time is imperative as a small business owner. Not just because you want to save money on late fees, but because you have to build a solid credit history and reputation for your growing business.

Here’s how to use online time tracking to stay organized and on top of your bills.

5. Find the right budget plan

There’s not a one-size-fits-all budget plan but you need to be open to experimenting so you can find the best solution!

First, start with your bare bones figure. What is the bare minimum amount of money you need to keep your business going and your personal expenses paid?

It’s vital that you know this figure and can bank on the fact that you will be able to pay all of your bills when the need arises. Plus, it will give you a good base to work with different types of budgets.

Here are several you can choose from.

Use a budget workbook or planner

Nothing helps you get on budget faster than writing everything down on pen and paper (or in a spreadsheet). Taking the time to actually list out your income and expenses, will help you take back control of your money.

You can also check out one of these top business planners, that are made specifically for small biz owners.

Try the 50/30/20 budget plan

This type of budget is broken down into 50% essential expenses, 30% lifestyle choices, and 20% saving/investing goals. Basically it’s 50% needs, 30% wants, and 20% savings.

This can be very helpful knowing that you only need about 50% of your income to live on — in you lose your job or get sick. You can rest easy knowing that you can make do for a month or two.

Test out budgeting software

Obviously, the simplest way to measure your income and expenses is to use free budgeting software, like Personal Capital. You can link up all your bank accounts, credit cards and other financial information to create a cohesive picture.

And the best part is that budgeting software like Personal Capital is free and can be used on the go with the mobile app to stay on track.

For a personal budget check out Mint.com to track spending since they have a super convenient (and free!) mobile app too.

6. Make saving and investing fun

When you’re self-employed, saving and investing isn’t as fun as it was when worked a 9-5 job. Mostly because you don’t get a regular paycheck and it can be difficult to see your savings build up consistently.

(Two steps forward, one step back sort of thing.)

But it’s important to prioritize saving and investing over other financial goals — like paying off debt.

As a self-employed business owner you have to adjust your savings strategies if you want to succeed.


You no longer have an employer paying part of your Social Security and Medicare taxes, nor do you have the luxury of a 401K match. As a self-employed business owner you are responsible for your own goals, financial needs, and retirement future.

No one else is going to help you, which is why you have to help yourself!

For these reasons it’s super important to prioritizing saving and investing goals above paying off debt.

Keep in mind though, that if you have a lot of consumer debt that eats into your principal payment with high interest fees, those should be at the top of list once you have a decent emergency fund in place.

How to budget with irregular income

Being the boss means you have to not only think about how to bring in enough money to pay the bills, but spend your money wisely so you can stretch the budget each month.

It will take a few months for a new budget plan to take effect, so don’t get discouraged if you try out the budget worksheet listed above and you fail miserably. Keep at it and you’ll start to see significant results with 2-3 months.

Like with any habit, the more you do it, the better it starts working.

Learning to budget with irregular income isn’t easy but by using these simple steps you can avoid going broke!


Learn how to budget with irregular income as a freelancer or business owner. This will help you avoid going broke when self-employed so you can stress less about money. Plus, get the free budget worksheet spreadsheet template!
[Budgeting Worksheets] How to Budget With Irregular Income to Avoid Going Broke When You're Self-Employed or a Freelancer

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