Budgeting when your income changes

Commissions, freelance work, tips, seasonal jobs: if your income changes from month to month, you can still budget. An income buffer evens out the ups and downs, so you can plan each month on a steady amount.

1. Find your average

Add up what came in, after taxes, over the last 6 to 12 months, and divide by the number of months. Last year's tax return works too: take the year's income after taxes and divide by 12.

2. Start an income buffer

Add a savings goal called Income buffer, with a goal of about one month of your average income. Keep it apart from your emergency fund, which is for surprises, not slow months.

3. Plan on a steady amount

While the buffer fills, set your expected income on the low side, such as your lowest month in the last year. Once it's full, plan on your average.

4. Even it out when you close the month

• A good month: on the last step, choose Add to savings and send the extra to your income buffer.
• A slow month: choose Cover from savings and take the shortfall from your income buffer.

Dollarz lists the transfer to make at your bank, so your buffer's balance matches what's really there.

Once your buffer is full, a good month's extra can go to a debt or another goal instead.