Some people get a set paycheck every month, but for many people it fluctuates depending on how much they worked that month, overtime, holidays etc. How do you budget when your income changes all the time?
The most important thing is to budget, budget, budget. Make sure that you are making smart choices with your money, especially in months when you make more.
It may seem daunting but I created a pretty simple system for myself.
- Add up all your monthly bills. Round up.
- When you get your paycheck-deduct 10% for charity (Maaser). I try to be careful to always include charitable giving in my budget. Although I don’t make much, it is important to keep on giving to others regardless.
- Deduct 15% (or 30% or 50%!) for savings. Put this in your savings ladder.
- Deduct your bills from this amount.
- Decide on a percentage for all variable categories (clothes, spurge, coming soon etc.) to put in your envelopes. For example, I usually use 10% for each. Deduct that amount from your paycheck.
- The amount that you have left over is for food and discretionary spending. If this amount is too small than lower your contribution to your other variable categories.
- If you have paychecks that are truly feast or famine (some months you make significantly more and some months you don’t even make enough to cover bills you will have to put extra in feast months into your bills and food accounts. It will take a lot of self-control and planning but it can be done!
The easiest way to calculate where everything goes is to use an Excel spreadsheet. Simply set it up with your desired percentages and your total bill amount, and then every month put your paycheck amount in and Viola! Each amount is calculated for you. I have attached a sample excel spreadsheet here. Play around with it and work out which numbers work best for you!