Irregular income amounts and payment dates

foolofbeans

I'm still trying to sort out our finances and can set the budget but it's really difficult to organise our income as OH gets paid fortnightly which never aligns up to monthly payments and his income fluctuates massively between winter and summer.
My income stays the same but is paid by cheque when I attend monthly meetings that have varying dates (always first two weeks of the month though).
How do I budget with irregular income amounts and payment dates?

I want to do the envelope system but I'm really not sure how to allocate the money when there is no set amount per month.

a_silver_lining

I'm sure others have more ideas, but I would divide any money in between priorities, so some weeks you have more or less for food, entertainment etc until a buffer has built up.

Say for example you get £500 one week, and you know direct debit A and B are going out that week I would put that aside first. Then say your rent is out in three weeks but is £450 and you are only expecting one more wage payment I would put aside a chunk for that. What is left I would live off. The following week say another £500 comes in but there's only the rent to be paid soon, I would then put that aside, and the split the remainder between a big food shop, future bills, savings etc.

Writing that felt like a waffle, so I'm sure there must be an easier way to do it!!

thegreenone

Work out how much money you need on a weekly basis over the course of a year. Put that one weeks amount into your current account and put the remainder into a savings account. Pay as many bills as you can manually each week. Build up to monthly if you prefer.


I pay mortgage, council tax, water, vodaphone and cc manually each week. I used to pay BG manually but got a good tariff through MSE so had to switch to DD. Hate it though as they keep changing the DD. I have a separate account for DDs ie BG, our life insurance and National Trust. Take control, it's your money. So long as everything is paid by the end of the month few companies are bothered how they get their money, so long as they get it.

foolofbeans

a_silver_lining wrote: »

I'm sure others have more ideas, but I would divide any money in between priorities, so some weeks you have more or less for food, entertainment etc until a buffer has built up.
Say for example you get £500 one week, and you know direct debit A and B are going out that week I would put that aside first. Then say your rent is out in three weeks but is £450 and you are only expecting one more wage payment I would put aside a chunk for that. What is left I would live off. The following week say another £500 comes in but there's only the rent to be paid soon, I would then put that aside, and the split the remainder between a big food shop, future bills, savings etc.

I think that's kind of what we've been doing but as we're in a lot of debt I guess it's not working! I want to be quite strict with our budget so was hoping to find a way to set one and know how much of each income payment we have to pay out to each outgoing. I just feel like I never seem to know where I am with the finances

foolofbeans

thegreenone wrote: »

Work out how much money you need on a weekly basis over the course of a year. Put that one weeks amount into your current account and put the remainder into a savings account. Pay as many bills as you can manually each week. Build up to monthly if you prefer.
I pay mortgage, council tax, water, vodaphone and cc manually each week. I used to pay BG manually but got a good tariff through MSE so had to switch to DD. Hate it though as they keep changing the DD. I have a separate account for DDs ie BG, our life insurance and National Trust. Take control, it's your money. So long as everything is paid by the end of the month few companies are bothered how they get their money, so long as they get it.

The problem we have is that in winter there isn't enough money and so everything won't get paid. We scrape by until the bountiful months of summer come around. I was hoping to get ahead of winter this year.
Great idea to work it out on a weekly basis - thank you!
It's still going to be tricky as every month has differing payment dates but it should hopefully be much easier than trying to reconcile irregular income and payments into a monthly budget. I shall go and have a think on how to distribute the income to our outgoings in weekly payments.

zenshi

I was in the same boat a few years back. Self employed with lots of debt. I did get a second job which made things easier, plus there’s just me so the sacrifices I made didn’t impact kids or partner

Firstly, I totted up my annual bills ie car insurance, car tax etc. This was divided into 12. Then added up my DDs for the month.

The money for the months DDs was allocated first, then what I needed for that months annual bills. Money earned after that was for food and debts

It took a while and when work picked up it was easier. Now it’s done without thinking

Hope this helps

Willing2Learn

foolofbeans wrote: »

I think that's kind of what we've been doing but as we're in a lot of debt I guess it's not working! I want to be quite strict with our budget so was hoping to find a way to set one and know how much of each income payment we have to pay out to each outgoing. I just feel like I never seem to know where I am with the finances

I've just found this in A Comprehensive Guide to the Envelope System

If you’re paid once a month, withdraw the monthly cost of all envelope categories added together each time you’re paid and fill the envelopes. If you’re paid twice a month, withdraw half of the monthly budgeted amount each time you’re paid.
If you’re paid every other week (26 times a year), base most of your monthly budget on two paychecks (24 paychecks per year). Then use the two “extra” paychecks to cover some of your periodic bills.

I hope this helps


Good luck!!

thegreenone

foolofbeans wrote: »

It's still going to be tricky as every month has differing payment dates

No, it's not tricky. It's your money. You are in charge. Ask to change the dates or make sure that if you pay upfront they won't take the DD. Make manual payments to suit your income. You need to be ahead which can be tricky... ie. our council want the CT by 2nd every month so instead of having two CT free months you start an SO for CT on the first Friday/Monday of March. By 2 April you've paid and leave it going. If you can add a bit extra you can finish before Christmas.


If you pay rent, talk to your landlord and ask to pay weekly.


For some companies you need to keep an active DD but if you pay upfront they wont take the it.

GlendaSugarbean

Do you have a complete list of all bills and when the payments are due? Can you pay everything plus basic groceries (minus spending money) on your minimum pay months?

We have one irregular and one regular income and have started a master spreadsheet with all bill dates. You might also want to consider separate bank accounts for bills, groceries, debts/savings and spending money.

Get all your figures together first - once it's written down it should be clearer. If not post them on here so people can help.

Smellyonion

Why would you not simply emulate a monthly income?

Pay the wages into a separate account. Workout how much you take home in a year devide by 12 - deduct say 10% to account for any fluctuations. Set up a standing order to transfer the calculated monthly amount into the main current account.

Fosterdog

In the long run you need to get ahead of your payments with a buffer, firstly just the two weeks would do to cover until your OH gets paid next, eventually a full month meaning that it won't matter what date exactly you get paid you will always have enough to cover you. The final goal then being saving enough in the summer months to cover your costs over winter without getting into debt.

It would be worth posting up an SOA but go back over the last few months and work out what the lowest you've both been paid in a single month is, use that for your budgeting and any extra earned is a bonus that can go towards buffer savings/debt/luxury items.

Also if your OHs money is significantly lower in winter then he needs to look for an alternative income source in those months, plenty of retailers take on seasonal staff for the Christmas period.