My husband is in sales and since his
commission checks go up and down, that means our incoming cash flow does is always variable I also have some part time income
right now from subbing and some online jobs that I work. 
It took me some time figure how
we should really budget for this and that is one of the reasons we got into credit card debt over 15 years ago when we were first married. I spent based on some of
his highest months and continue to live that way when his income varied.
Total your expenses
When you're making a variable-income budget,
start by totalling your income as you would if your income was fixed. Add up
the things you spend money on every month. This includes rent/mortgage,
utilities, car note, car insurance, health insurance, life insurance, phone
bill, loan payments, credit card payments, and taxes. You should even calculate
how much you'll spend on variable expenses like gas and food.
Average your income
If you had a variable income last year, too,
use your last tax return to come up with an average monthly income. Just divide
your gross income by 12 to come up with an average monthly income. If you don't
have a year's worth of income, average the months you have. For example, if
you've been freelancing or contracting for 7 months, add up the last 7 months
of income and divide it by 7. This will give you an average income to base your
budget on.
Does your average
monthly income exceed your expenses?
Your average monthly income needs to meet or
exceed your expenses. If not, you're going to run into a cash flow problem like
we did when we first got married. I wasn’t
very frugal nor did I ever keep a budget. I had
to adjust our expenses to fall below
your average monthly income.
Put your put in practice
I have 3 accounts that I use to help me budget and
make sure that we are on track!
I have one
checking account and 3 savings accounts.
My checking account will hold our monthly income that I use to cover bills and other expenses. I
have my husband’s pay deposited in to the first saving accounts and then I
transfer it to my checking account to cover my bills. I have any of my money directly deposited as
well.
The other savings account will be for savings It is really
my emergency fund . .. Start your budget at the beginning of the
month. Your checking account needs to have enough in it to cover your expenses
for the month.
As you get paid throughout the month, put the
money into Savings Account #1. You shouldn't have to touch your savings account
during the month. If you do, then you didn't budget enough for your expenses or
you're overspending (or you ended up getting paid less than average, see
below). At the end of the month, around the 28th, transfer or what you need to cover your expenses) into
your checking account. You are also budgeting a month in advance this way. Anything extra will become your buffer for the
months where you income is below your regular expenses.
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