Khizar Seo
Managing money is tricky enough when you receive the exact same pay packet on the same day every month. But for freelancers, shift workers, or anyone on a variable income, trying to plan ahead can be a juggle. One month you might be flush with cash, and the next, you are scraping the bottom of the barrel.
The secret to smoothing out the ride isn’t necessarily earning more; it is about changing how you view the money when it does arrive. By putting a few practical systems in place, you can stop holding your breath every time a bill lands on the doormat.
Get Clarity on Your Outgoings
Before you can organise your finances, you need to know exactly what it costs to keep the lights on. This isn’t about how much you usually spend, but the absolute minimum required to run your household.
Sit down with your bank statements and list your non-negotiables: rent or mortgage, council tax, energy bills, essential food, and transport. This total is your “baseline survival number.” Knowing this figure gives you a clear target. In months where you earn more than this, you know exactly how much surplus you have. In leaner months, you know precisely how much you need to find from savings to bridge the gap.
The ‘Hill and Valley’ Account Strategy
A common mistake is spending money as soon as it hits your account during a good month. Instead, try using a separate holding account.
Think of this as a reservoir. When you have a high-earning month, all income goes into this holding account. Then, you pay yourself a fixed, average “salary” into your main current account. This creates a buffer. The surplus from the good months (the hills) stays in the reservoir to fill in the gaps during the bad months (the valleys). It artificially creates the stability of a regular wage, even if your work is unpredictable.
Treat All Income Sources Equally
When your finances come from different places, it is easy to mentally categorise them differently, but this can lead to overspending. You need to view every penny as part of the same pot.
Whether you are chasing overdue invoices from freelance clients, banking cash from extra shifts, or receiving specific payments such as a fostering allowance or disability support, it all serves the same purpose. Don’t treat one source as “fun money” and another as “bill money.” By pooling everything into your holding account first, you ensure that your essential costs are covered regardless of where the funds originated.
Build a Safety Net
When your income goes up and down, a savings buffer isn’t just a luxury; it is a necessity. Aim to save three to six months’ worth of that “baseline survival number” we calculated earlier. This fund prevents you from relying on credit cards or overdrafts when work dries up unexpectedly.
Start small if you need to. Even putting away £20 a week during your better months helps build a safety net. Over time, this fund will give you the confidence to weather quiet periods without panic.
Stay Flexible
Review your budget frequently. Unlike a fixed-income household that might check finances once a month, you should probably look at yours weekly. Being proactive allows you to spot a lean month coming and cut back on discretionary spending, like takeaways or subscriptions, before the money runs out.
By separating your spending from your earning and keeping a close eye on your baseline costs, you can turn a rollercoaster income into a smooth, manageable ride.
