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My Income Is Different Every Month. How Do I Budget When I Never Know the Number? · Becoming Financially Confident

• 0:37
  Everybody hands you the same budgeting advice, but it assumes you get the same paycheck every month.
• 0:43
  And maybe you don't.
• 0:45
  So what do you do when your income is this moving target?
• 0:49
  Well, I've got a special treat for you today because there's a budget that actually built for you.
• 0:53
  Stay with me and let's build a budget that bends without breaking.
• 1:06
  Hello and welcome to Financially Confident Christian.
• 1:09
  I'm Ralph Estep Jr.
• 1:10
  And I'm your guide every day to helping you break that cycle of financial shame and give you confidence.
• 1:17
  And today we're going to talk about how to budget when income changes every single month.
• 1:21
  If you've got one of those jobs, like my youngest son is a barber, his income varies.
• 1:26
  He works with tips and commissions.
• 1:28
  Maybe you have gig work or maybe you're self employed and you know exactly what I'm talking about.
• 1:34
  You've got those great months where everything is hitting perfectly and then you've got those lean months that really hurt.
• 1:40
  And what you found is what most people find who live in this gig economy.
• 1:45
  The standard budgets just don't fit.
• 1:47
  And I get it, the stress you're under.
• 1:50
  You're trying to plan a life on a number that you can't predict.
• 1:53
  And that's exhausting and it's real.
• 1:55
  Now, if you've got a question for this show, this show is all about answering your questions.
• 1:59
  You, you can reach out to me at financiallyconfidentchristian.com/question We'll put a link in the show notes.
• 2:07
  But let's get right to today's listener question.
• 2:09
  And I'm going to start with the subject line.
• 2:11
  This is what the listener wrote.
• 2:12
  She said, Ralph, how do I budget when my paycheck is never the same twice?
• 2:17
  What a great way to start.
• 2:18
  Well, let's get right into the question.
• 2:20
  Hi, Ralph.
• 2:21
  I do hair and most of the money comes from tips.
• 2:24
  And how many clients booked that week?
• 2:26
  Some months I do really well.
• 2:28
  Some months are scary slow.
• 2:31
  I never actually know what's coming.
• 2:33
  Every budget video I watch starts with take your monthly income.
• 2:37
  And.
• 2:37
  And I just stop right there, Ralph, because I don't have a monthly income.
• 2:41
  I have a guess.
• 2:43
  So I don't budget at all.
• 2:44
  Honestly, in the good months, I feel rich and probably spend too much.
• 2:49
  In the slow months, I panic and put things on the credit card just to get by.
• 2:53
  Then the next good month, I'm just paying that back off.
• 2:57
  And I never get ahead.
• 2:59
  I want to be responsible.
• 3:01
  I just don't know when the number keeps moving, how to do it.
• 3:04
  Is there a way to do this for people just like me?
• 3:07
  Thank you.
• 3:08
  Well, thank you so much for sending in that question.
• 3:12
  And I get what you're going at, but I've got a good news for you today.
• 3:15
  There is actually a budget that actually works.
• 3:18
  And, and we can use what you reliably make, not what you might make, so you can stop living on this month to month roller coaster.
• 3:25
  Let's build it step by step.
• 3:27
  Here's the first step to this whole thing.
• 3:29
  You got to start by finding your floor.
• 3:32
  Now, what I mean by that is, what is the minimum amount of income that you've had?
• 3:36
  I had my son over yesterday for a pool day and we had this discussion and he said, dad, here's how I would answer it.
• 3:43
  So actually him and I worked on this episode together.
• 3:46
  But start by pulling 12 months of income.
• 3:48
  Include your tips in that.
• 3:50
  Once you have that data, then look at your lowest month.
• 3:52
  I don't want you to look at the average.
• 3:54
  I want you to look at the lowest month possible.
• 3:57
  And then you're going to build your budget around that.
• 3:59
  But make sure you're including your essentials, your rent, your utilities, your groceries, those minimum payments.
• 4:07
  And yeah, you got to drive to work.
• 4:08
  So make sure you put your gas on that.
• 4:10
  And then you work to survive your worst month.
• 4:14
  If you think about it, if that's your worst month and you can make your budget work, then every good month just gives you breathing room.
• 4:20
  So step number one is budget on your worst month.
• 4:23
  And every good month becomes a gift instead of a temptation.
• 4:27
  But here's the second piece to this.
• 4:30
  And this is the secret to the whole thing.
• 4:32
  You've got to work to get a month ahead.
• 4:34
  Your goal needs to be to build one full month of expenses and put that in the bank.
• 4:39
  That way you're always living on money that you've already earned.
• 4:42
  So this month funds next month.
• 4:44
  And you bank everything above that baseline until that buffer is full.
• 4:49
  And when you're a month ahead, a slow week stops being a crisis.
• 4:53
  Now here's another key to this.
• 4:55
  You've got to start by paying yourself a salary.
• 4:59
  Here's the way I recommend you set that up.
• 5:01
  Have two accounts.
• 5:02
  Have a holding account where all your income lands, and then have a checking account where you spend.
• 5:07
  And.
• 5:08
  And then each month you pay yourself that baseline that you determined in step one.
• 5:12
  You put that into the checking account.
• 5:15
  The holding account has the rest of that money that will smooth out those income inconsistencies.
• 5:21
  This way you've got A practical and predictable paycheck instead of that unpredictable income.
• 5:27
  The extra stays in the holding account and smooths out those lean months.
• 5:31
  You can give yourself a steady paycheck even, even when your work isn't so steady.
• 5:36
  Now here's another little secret.
• 5:38
  You gotta give every good month a job.
• 5:41
  What I mean by that is when you have one of those months like you talked about, those months that are really above that surplus isn't extra.
• 5:48
  You gotta start thinking in terms of if it's extra, it gets wasted.
• 5:52
  You got to assign it to a purpose.
• 5:54
  Maybe you set it for paying down your debt.
• 5:57
  Maybe you create a savings plan.
• 6:00
  See, if you don't have a plan, those good months becomes the overspending months.
• 6:05
  One more thing I'm going to encourage you to do is you've got to review this weekly.
• 6:09
  Just take 10 minutes a week, know your numbers, know what came in, know what went out, and know what you got a plan for for next week.
• 6:16
  It's all about building faithfulness, paying attention even in the midst of uncertainty.
• 6:23
  Now, you said something in your question.
• 6:25
  You said you have a guess, not an income.
• 6:28
  And when I hear that, I hear worry underneath of those words.
• 6:32
  And I just want to tell you right now, being a person of faith doesn't promise that every month is going to be good.
• 6:38
  It doesn't promise that you're always going to know what's next.
• 6:41
  But here's what it does promise.
• 6:43
  God has never needed your income to be predictable, to take care of you.
• 6:48
  You think about back in the Old Testament times, the word manna when it talks about that, it's this daily, this fresh.
• 6:55
  You couldn't hoard it because it came every single morning.
• 6:59
  Well, your variable income is modern manna.
• 7:01
  You have to think in terms of God's going to provide a buffer in the bank.
• 7:06
  And trust in the heart are not opposites.
• 7:09
  So today, work on building that system with diligent hands and carry that uncertainty with an open heart because he's fed you every month so far.
• 7:18
  And listen, you're not irresponsible.
• 7:21
  You're just never given a way to build a system that works for your income.
• 7:25
  But now you've got it.
• 7:27
  Steady is something you create, not something you're handed.
• 7:31
  So here's your win for today.
• 7:32
  I want you to add up the last 12 months and find your single lowest month.
• 7:36
  That's going to be your baseline.
• 7:38
  Open up your banking app and total each month, tips, income, all that stuff.
• 7:42
  Write down the smallest baseline number.
• 7:45
  You don't have to build that whole system today, just that one number, it rests on all of it, because you can't budget on a moving target until you find a floor where it never drops below.
• 7:55
  Which leads me to today's Bible verse.
• 7:57
  It comes to us from the book of Proverbs, chapter 27, verse 23.
• 8:02
  Now, this one hits close to home because I've got a flock of cows out here.
• 8:06
  But we call them a herd of cows.
• 8:07
  But it says this, Proverbs 27, 23.
• 8:11
  Know the state of your flocks and put your heart into caring for your herds.
• 8:16
  If you think about flocks being income, your income can be wildly unpredictable.
• 8:22
  The call wasn't, if you look at it, to have steady income, it was to know your numbers and tend them.
• 8:29
  That's being faithful.
• 8:31
  It's being faithful even with that variable income paying attention, even in times of uncertainty.
• 8:37
  Well, how about we pray together right now?
• 8:39
  Heavenly Father, I bring before you someone who works hard for every single dollar and never knows quite what the next month will be and what they're going to be able to do.
• 8:49
  And, Lord, they're not asking for riches.
• 8:51
  They're asking for steadiness and peace.
• 8:54
  So, Lord, today I ask that you would help to give them wisdom to build the buffer and really discipline to protect it.
• 9:01
  Steady their heart, Lord, in those slow seasons so panic doesn't drive them to debt.
• 9:06
  And help them give every good month a purpose.
• 9:09
  Help them to focus on manna in every wilderness.
• 9:13
  And you provide for all of us, Lord, don't you?
• 9:15
  And we ask this in the precious name of Jesus.
• 9:18
  Amen.
• 9:20
  Friend, you started today with Ralph.
• 9:22
  I don't know how I'm going to do this, but now you've got a system that's actually built for you.
• 9:26
  So here's the recap.
• 9:27
  Find that baseline that's your worst month and build that buffer so that you're living on last month's income.
• 9:33
  And.
• 9:33
  And then pay yourself a steady salary and give every good month a job.
• 9:37
  And don't forget to check in weekly.
• 9:39
  And if you've got a question for this show, one of the things you can do is you can actually record me a voicemail message.
• 9:45
  It's super simple.
• 9:46
  Go to financiallyconfidentchristian.com/voicemail now, we'll put a link in the show notes, but you just go to that website, click, record, and I'll hear your voice again.
• 9:56
  That's financially confident Christian.
• 10:01
  I just want to thank you so much for joining me today.
• 10:03
  As I always say, stay financially savvy.
• 10:06
  May God bless you and you have a truly great day today.
• 10:28
  It.