variable income
Updated November 01, 2020

Variable Income Tips: How To Save The Same Amount Each Month


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We all know that you can’t really plan every single thing in life. Things get even more complicated when you are on a variable income. There are multiple reasons why you might be earning a variable income: you work as a freelancer, you do odd jobs until a good position comes along or you earn a commission. Whatever the case is, when variable income is the main part of the equation, the formula for success might seem a bit more complicated than if your income was the same each month. And in reality, it is more complicated – if you decide to look at it that way. If you want to think outside the box, you will realize that it isn’t as nerve-wracking as it seems at first glance.

Good to Know

When it comes to patterns, we can see them even where they don’t exist. Our lives also follow patterns, so if you and if you analyze your lifestyle you will be able to recognize them.

Those patterns can be your key to save on irregular income – either by following your existing ones or creating new ones.

If you are looking to save the same amount of money each month on while earning an irregular income, we have some ideas you are welcomed to use!

Set Your Goals

Setting your goals doesn’t inherently save you money, but it pushes you one step closer towards doing it.

Interesting Fact: Studies have shown that people who had set goals were able to reach them more efficiently as opposed to people who didn’t set their goals.

Something like “If you can dream it – you can do it” but in a more realistic sense. Decide why you are saving – is it for a deposit on a house, a new car or simply because why not?

Regardless of the reason, having a clear goal suddenly makes things more manageable.

Keep in Mind: Even if you are not saving for anything in particular, setting a goal of saving a given sum in a certain period will be the place to start.

Pro Tip: When setting your goals, it is important to be S.M.A.R.T. about it. Your goals need to be:

  • Specific
  • Manageable
  • Attainable
  • Realistic
  • Time-oriented.

Setting a goal to save one million within a year when you are earning no more than $50.000 annually is not a goal – it’s a dream. It can only come true if you win the lottery! Setting goals you can achieve is the thing that will get you started on a high note. If you set your goals too high, you might get demotivated and put off the idea of saving money. You might do a YOLO and start spending more money than you need to.

A Bit of a Warning: Goals that are too low can equally demotivate you. A goal that is easy to achieve might be pushed further down the line. That’s something like saying “I will save $500 in a year”. The goal is very easy to achieve so you might be putting it off since you know you can easily do it.  In the end, you will forget about it and find yourself not having saved even $100 at the end of the year.

How Do You Set Your Realistic Savings Goal?

Goals need to motivate you to save money even on an irregular income. Let’s say you have earned between $2.000 and $3.000 in the last 6 month. Are there any indications that you might be earning less in the following period? If not, then you have a good standing ground to be able to establish your goals.

  • A healthy savings percentage per month is between 15% and 20% before tax. If you conclude that you can do even more than that – good for you!
  • If you earn $2.000, you need to aim to save between $300 and $400 each month.
  • If you are saving money together with a partner, you need to double or even triple the amount you save each month, depending on your expenses.
  • When you break the goal down into clear actions it will become easier to achieve.

Give Yourself a Regular Paycheck

Irregular income makes things harder to predict, but still not impossible to do so.

A Good Example: Let’s assume that you predicted that in the following six months you will be earning around $2.500 after tax based on your income in the last six months. Your living costs are at a total of $2.000, so you think you can save $500 a month. The goal is set!

A good hack you can do is give yourself a paycheck and stick to it.

  • Open a savings account and transfer all of the money you are earning over there. Transfer $2.000 on your debit card and pretend that the other $500 are not even there!
  • If one month you earn, let’s say, $2.800, leave the extra $300 on your savings account.
  • If at the end of the month, if you are left with a bit of money from the paycheck you’ve given yourself, move them to your savings account as well.
  • The extra amount that you are left with apart from the $500 which are your monthly goal will be your emergency money.
  • If you earn $2.200 another month, you can still give yourself the $2.000 you need, but your emergency money will make up the difference and you will still be able to save $500.

And if you have no need to touch your emergency fund, that means that you will be saving even more money than you aimed for.

Watch Out For Irregular Expenses

You know that feeling at the end of the month when you are left with more money than usual and you ask yourself “What did I forget to pay?”

Not all expenses are regular – sometimes you need to renew your driver’s license, your passport or you have a friend’s wedding to attend.

A Good Trick

Even a few months beforehand, you know that you will need to spend more money than usual. If you make yourself aware of the arrangements that come with irregular expenses, you can plan things better in order not to disrupt your savings goals.

Your emergency fund is usually the go-to place in situations like that.

If you have enough money there, you won’t have to worry about disrupting your savings pattern. However, if the money in your piggy bank isn’t enough to cover your expenses, you need to readjust your plan.

  • Let’s say that your emergency fund is $200 short to cover an irregular expense.
  • What you can do is take those $200 out of your saving accounts but promising that you will repay them to yourself.
  • The easiest way to do that is by adjusting your savings plan for the next two months.
  • Bear in mind that saying “I will just put another $200 next month” might not be an achievable goal, unless you earn more in the following month, which is, of course, great.
  • The best approach to take here is to split the $200 into smaller amounts over a longer period. Something like £50 in four months. That means that in the following four months, you will need to save $550 instead of $500 to get back on track.

Doesn’t sound too hard, does it? Skip one night out in each of the four months and you have achieved your goal!

Learn To Prioritize

It is not always about the bare minimum – sometimes you deserve a treat! There might be some shoes you really like or it might be time for a new set of sunglasses.

  • You can have it all without disrupting your savings plan, you just need to be smart about it!
  • Give yourself an allowance for expenses like this. Make sure you do that from the monthly payments you’ve given yourself.
  • But don’t buy everything all at once because it will be a burden on your budget.
  • Instead, prioritize on what you need first and leave the other thing for next month.
  • You can also set micro goals to allow purchases like this – give yourself the task to spend less on something which is not crucial to compensate for the item you want.

If you set such micro goals, you will be able to get that thing you really wanted and save on irregular income!

Be Smart About Saving

Let’s stick to the assumed $2.000 you will be giving to yourself. Now ask yourself the question: Do you really need $2.000 a month or is that your comfort zone? How about “stealing” money from yourself and pumping up your savings?

Consciously, this might be a difficult task but luckily, we live in a wonderful technological era.

Pro Tip

Introducing Digit – the app that will “steal” money from you for you.

Did You Know? Digit works on a simple, yet sophisticated principle – it analyzes your spending habits and sets a “safe” amount to save you each day.

How Does It Work? By connecting your bank account to the app, Digit will look at your spending habits and decide when it is the right time to save you some money. If Digit realizes that your budget for the day is stretched, it will give it a miss and let you treat yourself.

But on days when you don’t spend a lot and Digit calculates that saving you a bit of money won’t disrupt your lifestyle, it will move a small amount of money for rainy days. At the end of the month, you will have a bit of extra saving which over time will accumulate without you even noticing.

Manage Your Credit Card

If you are spending irresponsibly, your credit card can turn out to be your downfall, not only in building debt (and we know debt can be challenging to get out of) but also in ruining your credit score.

Good to Know: We all know credit scores are important and luckily, even the worst credit score can be improved if you understand how it works.

Pro Tip: In order to give your credit score a positive boost, try Credit Sesame.

With Credit Sesame, you can test your credit score, learn how to manage it better and understand it better.  Credit Sesame gives you inside information on what might be ruining your credit score without you even being aware of it.

Once you know, you can use the advice from Credit Sesame to improve your credit score, even if you are earning a variable income.

It’s All Fun and Games – and Money!

If you are like most Americans, you do love a bit of innocent fun that involves gambling and the nation’s favorite slot machines. Still, when you are on a track to saving money, even an occasional slot machine treat is a big no.

Luckily, there is a way around this and you can have fun with 0 chances of losing money – Long Game.

How Does It Work?

The idea behind this is really interesting – the more money you save, the more coins you earn. You can use those coins on Long Game slots and win real money! By signing up to Long Game, you are giving yourself the chance to be rewarded for your saving and a chance to win money! This, in a way, can be very motivating to build up your savings even on a variable income. Spin, spin, spin – you might win!

Merge Healthy with Wealthy

When it comes to budgeting, grocery shopping comes on top of the list of necessities. It clearly is important to have a plan on what are you going to shop for foodwise. Without a plan, you might fill up your kitchen with junk food which is both expensive and bad for you.

Consider This: If you wanted to shed a few pounds, you can kill two birds with one stone, or potentially even more!

A Possible Solution: Meet HealthyWage – the program that will motivate to save money, lose weight, live better and earn money!

But there is another positive thing here – if you decide to go on a weight loss journey, you will need to accurately plan your meals.

That means no food waste! You win by not buying more food that you need and the environment wins by you not throwing any food away. It is definitely more than two birds with one stone!

Don’t Waste Money on Fees

Fees are everywhere – we became so used to them that we don’t even notice them! We are all paying hidden fees without even noticing. And those fees might be costing you more than you would like them to. After all, why pay fees when you can put the money towards your savings?

A Possible Solution: Why not let Cushion help you? Cushion is a handy little app that will analyze your transactions and find hidden fees. Then it will try to get you your money back!

How Does It Work?

  • We all pay fees like ATM and wire transfer fees without realizing.
  • Luckily, the Cushion algorithm is designed to do just that – find it, fight for it and win it for you.
  • If you are earning a variable income this fee money can make a difference – let Cushion help you win it back!
  • Variable income theoretically makes saving planning much more difficult. However, if you take some time to do analysis on your earning and spendings, your view can change.

Recognize your spending and earning patterns and build your saving plan around them.

Do you think you can pull it off? We believe our irregular income savings plan is quite achievable. Do you agree with that?

If you don’t agree, what makes you think that way? What is the biggest variable income savings challenge in your opinion?

Or even better, do you have any irregular income savings tricks up your sleeve? If you do, let us know!

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Logan Allec, CPA

Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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