A Budget for Artists and Freelancers: Budgeting with an Irregular Income

Brent Pittman —  01/10/2012

Artists and freelancers are different. You think differently, sleep differently, and work differently. You live a gig life. Consequently this affects how you are paid and how you can budget.

Getting paid $5,000 for a commercial and not making a penny the next month. Dilemma. How will you pay rent and your SAG membership? What if Google introduces another Panda and your PR dives along with your income?

You’ve got to budget differently if you get paid per project, gig, or work off 100% commission. Keep in mind that budgeting with your unique lifestyle involves a bit of Improv (I love Monkey Butler) and ideally a larger Emergency Fund that those with a predictable income.

How to Budget with an Irregular Income

1. Determine the least amount you’ll make per month- Every month you’ll make at least X amount. This X amount can be budgeted like normal which I wrote about here.  If you’ve got months where you make nothing, you’ll need to find the lowest amount you can live on and have at least that amount in your Emergency Fund.

2. Rank your important expenses- There are certain expenses that have to be paid each month: Rent, Food, Transportation, etc. Rank all your normal expenses from top to bottom in order of importance. When money comes in or you have an amount greater than X from #1 above, start paying from the top of your list and go as far as you can. If you have extra money, put it towards debt or back into your emergency fund. Use this worksheet if you want to use pen and paper.

More Tips for Living with Irregular Income

  • Charitable Giving- If you come from a faith or lifestyle in which giving is important or integral to your spiritual life, then give first. For my family, we give first and then budget the remainder. If I try to give later down the road, then the money may already be spent by mistake.
  •  Taxes- If you are self-employed and/or receive a 1099, set aside enough money to pay your quarterly taxes or put them in a separate account to pay taxes at the end of the year.
  • Emergency Fund- Those of us who live off irregular income need a larger emergency fund. If you had a regular income you’d need $1,000 if you are in debt or 3-6 months of expenses if you’re out of debt. For Irregular Income earners, you’ll want to pad that amount and/or lean towards the higher 6 months-12 months of basic expenses of savings.
  • Give it Time- It may take up to a year to build up your emergency funds and to perfect your budgeting methods within your unique industry. But, hey you don’t do life normal anyway. Otherwise you’d have a boring day job.

How do you live on an irregular income? Do you have any suggestions or tips? Please add them to comments below.

(Photo by The Library of Congress)

[This is part of my How to Budget Like a Pro blog series]

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Brent Pittman

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.
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  • Erica Neumann

    Thank you Brent. Here’s to less stress in this rollercoaster industry. Good thing I found your site while I was googling new careers.

    • http://www.ontargetcoach.com Brent Pittman

      Hope I was able to help some! Keep pursuing your dreams.

  • http://www.thedebtprincess.com/ Jessica

    6-12 months of living expenses?? hahahaha I’m not laughing at the concept or the fact that you suggest it (it’s a stellar and sound idea) I’m laughing at my ability to actually do something like that. I have a new dream.

    Happy to have just found your site. 

    • http://www.ontargetcoach.com/ Brent Pittman

      My dream too! I know people who are in the film industry who can make between 40K-200K a year depending on if they land gigs or not. Most artists need a really big cushion for those dry months.

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  • http://www.zahndrew.com/ Andrew Zahn

    You just got a new follower Brent! Great advice! 

    • http://www.ontargetcoach.com/ Brent Pittman

      Welcome aboard! 

  • http://twitter.com/BeccaTatum Rebecca Tatum

    Great stuff!  Most budgeting books have maybe a  few paragraphs set aside for a freelancers/contractor… proof that the book was written by someone not familiar with our ebb and flow!

  • http://www.drdeadline.com Rick Clark

    I’ve been “freelance” for over 30 years… this is great. Now, how about a series on business development and the importance of keeping the pipeline full.

    • http://www.ontargetcoach.com/ Brent Pittman

      Rick, maybe in the future. Something to think about. 

  • http://sevensentences.com Geoff Talbot

    Really useful blog Brent. As an artist and now a family man this is a very tricky area of life. Thanks for sharing!

    • http://www.ontargetcoach.com/ Brent Pittman

      Something just happens to a guy when he gets married and has kids…that ‘gotta provide’ gene kicks in. 

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