If you have an unreliable income

[Costanza]

How do you budget?

DH is self employed and can make anything from £0-£1500 in a week. Our finances have always been all over the place as we tend to rely on a 'good' week to pay the bills.

Just wondered how others with a variable income do it?

I'm very tight with bills etc and frugal generally.

If you keep expenses low it really helps the lean months.

I'm self employed too and I've found that spreading out your direct debits helps. You're then working to a weekly budget which can be more manageable.

I've been self-employed for a few months now but before that, my day job earnings weren't enough to sustain us without my self-employment income, so I had to learn to budget early.

The most important thing to do is work out your budget and then start building a 'cushion' which you'll be able to dip into in the low-paying weeks/months.

Work out all your outgoings (for non-regular bills, like insurance, car repairs etc, estimate how much they would be yearly and put a 12th of that money away every month. I also do this for Christmas, birthdays, holidays and business costs). Try and trim every expense down to the minimum as Fluffycloudland77.

Once you've worked out what you have to earn to cover the essentials, start to put away money (when you have a good week) in a 'cushion' fund. This will gradually build up, so when you have a week/month where you haven't earned enough to cover your essentials, you can dip into this to make up the difference.

If you're being really efficient, you could build your cushion to cover 3 months to 6 months of essential costs, that would really bring peace of mind (although might take a long time to achieve).

We have one 'reservoir' current account with 3 months worth of living expenses in it. All income goes into that account and every month a month's expenses is transfered from it into the main 'spending' joint account, from which all bills, groceries, petrol, plus standing orders for 'pocket money' (us and the DC!) are paid.

So we are essentially paying ourselves a 'salary' every month. This system saved my sanity