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How to budget for an irregular income

Five rules for saving money on an irregular income

It can be hard to save money and budget effectively on an irregular income. How do you avoid living beyond your means when your means can change from month to month? Being flush one month and broke the next is a common experience, but by following these five tips you can keep your savings under control.

Make a budget and stick to it

When you don’t have a full picture of your income, it is essential to get a clear idea of your expenses. Record your yearly expenses in as much detail as possible. Try to account for every single cent you spend. Use different subheads such as “entertainment” and “clothing” to help cover every area of spending and be as detailed as you can. The more you break it down, the better chance you have of not leaving anything out.

Divide this by 12 and you will have your average monthly income. You can use this monthly figure to see how much you are spending over or under your earnings in a given month. Once you have determined your expenses, it gets easier to manage them.

Tip: Track expenses automatically with cards

For an easier and clearer breakdown, you might want to try paying for everything with a card or bank transfer. If you pay for everything electronically, your statements can automatically give you a record of your expenses, neatly broken down into useful categories. Set aside some time at the end of each day, week or month to put these in a spreadsheet and you’ll have a clear picture of your expenses.

If you plan on doing this, make sure your credit card or debit card isn’t incurring any unwanted fees for doing so.

Eliminate expenses

Once you have a picture of your average yearly and monthly income and expenses, you can look for ways to eliminate costs. For example, by looking at your expenses, you might realise that you spend over a thousand dollars a year on coffee or find out that the bank fees on your savings account cost more than the amount you make in interest.

Zero fee bank accounts are an effective way of eliminating at least one potential cost.

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Rates last updated October 18th, 2019
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Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
HSBC Everyday Global Account
Visa
$0
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Special offer: $100 bonus for new HSBC customers.
Earn 2% cashback on tap and pay purchases under $100.
Enjoy no foreign ATM or transaction fees and the flexibility to hold up to 10 currencies. Apple Pay and Google Pay available. T&C's apply to $100 bonus and 2% cashback offers.
Suncorp Everyday Basics Account
Visa
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A simple everyday account with low fees.
$0 monthly account fee.
Enjoy no monthly account keeping fees as well as the option to pay using Google and Apple Pay. Free ATM withdrawals at 3000+ Suncorp and rediATMs.
NAB Classic Banking
Visa
$0
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Enjoy convenient, unlimited access to your money.
$0 monthly account fee.
Tap and pay with your NAB Visa Debit card or your phone using Apple Pay, Google Pay, Samsung Pay or NAB Pay for Android. Temporarily block your card at the touch of a button if you lose it.
CUA Everyday Snap Account
Visa
$0
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Refund of international ATM withdrawal fees and international card transaction fees (conditions apply). Refund of overdrawn fees.
$0 monthly account fee. Unlimited fee-free everyday transactions.
Apple Pay, Google Pay and Samsung Pay available. Savings Top Up tool automatically transfers to linked savings account.
CUA Everyday Account
Visa
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Enjoy flexible payment options and access to a wide network of ATMs.
$0 monthly account fee.
Access to Google, Samsung and Apple Pay. Enjoy fee-free cash withdrawals from 10,000+ ATMs across Australia. Deposit $1,000+ into this each month and receive bonus interest on a linked CUA eSaver Reward Account.
Citi Global Currency Account
Mastercard
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Hold up to 10 currencies.
$0 monthly account fee.
Enjoy one linked debit card to hold up to 10 currencies and receive foreign currencies for free. Earn up to 1.50% p.a. interest on your AUD balance.

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The latest in money saving tips

Account for every cent

All expenses, down to the cent, should be included in your budget where possible, even if you only record it as “daily expenses.” Using a finance app can make it a lot easier to track your ongoing costs, especially when it’s as easy as plugging a number into your phone as you make a purchase.

If you are using a rewards card, you may also want to work out how much the bonus points are worth, and judge whether it’s delivering value for money. If so, you can build those points into your plans and decide how to spend them.

Pay off the debts

If you have multiple debts, the best way to keep costs down is to pay off the highest interest debts first. In many cases, this will be credit card debt. Ideally, it will be gone for good, thanks to the magic of effective budgeting, once you’ve gotten it all paid off.

Sometimes, it’s worth considering a debt consolidation loan. This is a loan you take out that you will use to pay off other debts. Essentially, you replace your old loans with a new loan that has new rates and fees. It’s not always the right option, but you should not rule it out right away.

Make micro-investments

The stock market, foreign exchange trading and other investment opportunities are an integral part of financial planning in this day and age. Unfortunately, if you’re living on an irregular income, it can be hard to find enough money to make a worthwhile investment. Micro-investments are a way around this.

Acorns Australia is one such micro-investment platform. With it, you can round purchases up to the nearest dollar and invest the difference in your choice of investment options. This has the added effect of letting you round off transactions for your budget, making things easier to track while letting your investments grow.

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