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How Do I Manage Money When My Income Isn't Predictable? · Becoming Financially Confident

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  Truth is some months the money flows in, then other months hits a trickle.
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  At best.
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  If your income is unpredictable, maybe because you're a freelancer or
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  maybe you run a small business, or you work on commission, you know the
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  stress of that feast or famine cycle.
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  You're asking yourself, how do you budget?
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  How do you pay bills, and how do you really find peace when you don't know
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  exactly how much you'll make next month?
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  Stick with me today 'cause I'm gonna tell you just how to do that on today's show.
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  Hey there.
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  Welcome back to your Daily, financially Confident Christian.
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  I'm Ralph and I'm glad you're with me today.
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  This show is all about helping you answer that question, how can I become
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  a financially confident Christian?
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  And we continue on our series today, dealing with the stress of money
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  worries, stress and money worries are two things that go hand in hand.
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  Yesterday we started talking about income.
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  We, We made a decision to assess just where we were, and then we
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  started talking about some potential opportunities to grow our income.
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  And this is a big area of focus for many people.
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  Well, today we're gonna move into a specific income challenge, and this
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  is one that's faced by a great deal of people in our audience, especially
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  those people who find themselves being small business owners and those who
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  have those variable income roles.
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  Things like freelancers and people who maybe who are doing sales professionals or
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  gig workers or side hustle entrepreneurs.
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  And you ask yourself this very difficult question.
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  How can I effectively manage money when my income isn't the same every month?
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  And the truth is, this does bring a unique set of stresses.
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  Now listen, you know the drill, if you have irregular income, one month is great.
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  Maybe you landed a big client, or you had this great month for sales
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  and you feel this sense of relief.
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  Maybe you even feel a little flush, if you will.
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  maybe you tend to spend a bit more than you really should that month, but then
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  all of a sudden the next month is slow.
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  And guess what?
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  Those bills are still due, but the income, it's just not there.
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  So what do you do?
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  You dip into savings, and that's assuming that you have some.
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  And all of a sudden you start to feel this stress again about covering everything.
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  And maybe you postpone paying off that debt.
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  Maybe you're working actively to pay off your debt, or maybe you're
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  working actively to save money.
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  And when you have that income, that's not what you expected.
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  you postpone paying off that debt or you postpone savings for goals
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  and this unpredictable swing.
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  And it's really a swing between feast and famine.
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  And I get it.
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  I've lived that myself in my business, and it's a major struggle.
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  And here's a simple truth.
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  It makes traditional monthly budgeting feel almost impossible.
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  And what I think it really does, it leads us to be reactive in our spending
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  instead of being planned in our spending.
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  And it truly does create constant uncertainty and anxiety because
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  you are always wondering if you're gonna have enough to meet your
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  obligations and meet them consistently.
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  A lot of people share with me, they say, Ralph feels like I can never
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  get ahead because any progress I made in a good month will all of a sudden
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  Ralph gets wiped out in a slow month.
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  Well, here's the thing you need to understand.
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  Managing irregular income does require a different approach.
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  If you've got a steady paycheck, if you get paid every week or every other week,
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  it's a little bit easier to manage that.
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  If you don't have that income, if you've got irregular income, that does
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  truly demand extra discipline because during the good times, you've gotta
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  be prepared for those lean times.
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  I call this forward thinking stewardship.
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  It's actually talked about in the Bible.
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  Think about the story of Joseph in Genesis chapter 41.
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  I'm not gonna read that story today.
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  I'm gonna encourage you to do that.
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  But he didn't just enjoy the seven years of that abundant harvest.
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  During that time, Joseph saved and he stored up grain
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  during those abundance years.
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  'cause he knew he needed to prepare for those seven years of famine that followed.
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  See this was a simple act of saving from a place of plenty
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  to prepare for that scarcity.
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  And it's a powerful biblical model for managing those unpredictable resources.
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  every day I talk on the show about being diligent and being
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  diligent in our stewardship.
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  So yes, we have to trust God's provision, not just in the moment,
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  but over all of our different seasons.
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  And we've gotta learn to use that abundance he provides today to
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  create stability for tomorrow.
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  So you might be asking, what can we do?
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  How do we bring stability and peace to your finances when your
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  income is anything but stable?
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  Well, I've got a solution today, and I'm gonna tell you to do this.
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  I think the best thing to do is implement a budget and saving
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  strategy design specifically for those of you who find yourself in
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  that irregular income situation.
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  Focus in on building what I'm gonna call a consistent buffer.
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  And it's a buffer to smooth out the highs and lows.
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  This approach, if you're able to do it, is gonna Shift you from reacting to your
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  income and that income volatility to really being proactive in managing it.
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  Okay, so here's your one action step for today, specifically laser
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  focused on managing irregular income.
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  The first thing I want you to do, and this one is crucial, you need to
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  go calculate your average essential expenses, go back to your budget.
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  Go back to that financial snapshot that we created.
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  Identify your absolute essential monthly expenses.
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  These might be things like housing or maybe the minimum utility costs you gotta
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  eat, so you gotta put basic food on there.
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  If you've got debts, you need to at least be making the minimum
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  debt payments, and don't forget, include transportation costs.
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  Then I want you to calculate that total amount needed each month, and
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  that is just to cover the basics.
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  I'm gonna call this your baseline budget, so you got that number in mind.
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  The next thing you need to do is set what I call a buffer fund goal.
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  Your primary goal is to build a separate savings account.
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  Now, this is not your emergency savings account, but this is designed to
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  cover maybe one, two, or three months of those average essential expenses.
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  Again, this isn't your emergency fund.
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  It can overlap, that's fine.
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  But this buffer is specifically smoothing out those income dips.
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  I want you to write down your target amount.
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  For example, maybe for you, you want two times your average essential
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  expenses, so write that down.
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  This way you know how much your average expenses are per month, and you're
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  saying to me, Ralph, I wanna have at least two months of those set aside.
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  Then what I want you to do is during those months, when you have good months,
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  you know you've had a good month of sales, or you landed that contract or
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  landed that client, that maybe is going to give you a big upfront payment.
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  You gotta building that buffer in those high income months.
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  Aggressively fund it.
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  Hey, if you've got an extra month, don't think to yourself,
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  Hey, and I've done this.
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  You land that big client, Hey, let's go out to eat every night this week.
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  Or Let's go buy that watch we wanted, or that, that electronic
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  that we couldn't live without.
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  I want you to instead think about aggressively funding that buffer
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  fund until you reach that goal.
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  Of course, you're still gonna pay your essential bills, but then
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  send any extra money directly to that buffer savings fund.
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  And the reason you're doing that is the final step here.
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  When you have those low income months, that's when you can go grab
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  that money from that buffer fund to cover that shortfall in your, you
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  know, in your essential expenses.
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  What does this do?
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  It prevents you from going into debt.
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  We don't wanna find ourselves constantly going into debt when
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  we have these low income months.
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  It also completely reduces or eliminates that stress of covering the bases.
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  You're not worried about, am I gonna have a roof over my head?
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  Am I gonna be able to eat and put gasoline in the car?
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  It also helps you get past that feast or famine stress cycle.
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  It creates a beautiful financial cushion that will allow you to pay your essential
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  bills consistently, regardless of how much income came in in that specific month.
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  And it really does help replace that uncertainty of that unpredictable
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  income because you've got a, you've got a stable planned buffer that can
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  bring you significant peace of mind.
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  Well, let's pray together now.
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  Father, God, thank you for providing for us even when our income isn't predictable.
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  And Lord, we confess that stress and anxiety come from that feast or
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  famine cycle really does bother us.
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  So, Lord, we would ask that you grant us wisdom and grant us
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  discipline to manage our irregular income and manage it effectively.
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  Help us to save diligently during those times of abundance that you
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  give us, that way we're prepared for those times of scarcity.
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  Grant us peace during those low income periods when we might feel
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  like we can't trust, and just give us trust in your consistent provision
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  through the many seasons of our lives.
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  Guide us in being wise stewards of every dollar that you send our
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  way, regardless of when it arrives.
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  And we ask this in confidence.
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  In Jesus' name, Amen.
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  Now listen to me.
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  Managing irregular income takes intentionality and it takes discipline.
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  It's, it's not simple, it's not easy.
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  But if you add intentionality and you add discipline and implement that buffer
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  strategy we talked about today, you can dramatically reduce the stress of that
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  unpredictability because guess what?
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  You're taking control of your financial flow and you're not just reacting.
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  Now if managing irregular income is a challenge that you face, maybe
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  you know somebody else that's facing it too, and I'm gonna encourage
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  you to share the show and share this particular episode with them.
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  You can find out all of our resources and connect with our show at our
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  website that's at financially.
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  Confident christian.com, and I've got a special gift for you on the journey.
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  For the first 100 listeners who go to financially confident
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  christian.com/master, I'm gonna give you a free copy of my book.
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  It's called Mastering Your Finances.
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  Now, this is a quick, it's a powerful read.
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  Design is a starting point to help you break that cycle of financial
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  shame and step into confidence.
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  Again, you get to that by going to financially confident
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  christian.com/master.
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  Go get your free copy today.
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  Now tomorrow we're gonna be talking about lifestyle creep.
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  Yeah.
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  How spending often increases as income increases.
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  And we're gonna talk specifically about how to avoid that trap to protect
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  the progress that you're making.
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  You don't wanna miss it.
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  So make sure you join me tomorrow.
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  Now, let's all go out there and be financially confident.
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  Christians, you can do this.
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  I have confidence in you.
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  Have confidence in yourself.
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  Stay financially savvy.
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  God bless you, and you have a great day today.