Can you plan how you will spend your money when you don’t know when or how much you will be paid?

Does your income feel like a rollercoaster? One month you’re up, and the next month you’re down. Here is a short list of fields that may struggle with this: salespeople, freelancers, contractors, small business owners, Realtors, personal injury attorneys, and others. If you are in a field with variable income, you know the drill. This unpredictable income can make your spending plan feel impossible, but I’m here to tell you it’s not only possible, it’s essential.

Your Secret Weapon: The Variable Income Fund

To conquer unpredictable income, you need a financial buffer. The ultimate goal is to pay yourself a consistent amount each month, regardless of your actual earnings. This is where your Variable Income Fund (VIF) comes in. Here’s how to build and use it:

1. Know Your Essential Expenses

Figure out what it really costs you to live for a month. And I mean normal month, not a “I can make it work with cutting this and that”. Be realistic about your current spending, including those infrequent expenses like car repairs, Christmas, vacations, or annual subscriptions, where some are predictable and some are not. It’s easier to save a little bit each month towards those expenses than come up with the money all at once. Let’s say your baseline is $9,000 per month.

2. Determine Your Variable Income Fund (VIF) Size

This is personal, based on how much your income fluctuates and how much security you need.

• Slight Variations: If your income usually swings by +/- $1,000, and you rarely have more than two “low” months, a VIF of a few thousand dollars might suffice.
• Big Swings: If your income can jump from $2,000 to $12,000, you’ll need a much larger fund. Look at your past income trends to see how many months you might face a significant shortfall. For those really big swings, I’d personally aim for something like $25,000 to $50,000 for my VIF (I’m a bit conservative!).

3. Implement the Plan

Once you have your target VIF amount (let’s use $5,000 for this example), save that money. You don’t need a separate bank account; simply create a dedicated category in your spending plan for your “Variable Income Fund.”

Now, here’s the magic:

• When Income is Low: If you only bring in $5,000 in a month (and your baseline is $9,000), you’re $4,000 short. Just pull that $4,000 from your VIF to cover your expenses. You still live normally, stress-free. Your VIF now has $1,000 left.
• When Income is High: The next month, you earn $16,500 – $7,500 above your baseline! Great! Put that $7,500 surplus straight back into your VIF, bringing it up to $8,500.

You continue this cycle, topping up your VIF when income is good and drawing from it when it’s not. Once your VIF hits its target (e.g., $25,000), any extra money you earn beyond your baseline can go towards other goals.

What to Do with the Extra Cash

Once your VIF is funded, any surplus income is pure financial freedom! You can:

• Increase Your VIF: If you still feel stressed, consider making your fund even larger.
• Boost Emergency Funds: Build up your emergency fund for unexpected events or infrequent expenses that will come up.
• Fund Long-Term Goals: Invest in retirement, a house down payment, or your kids’ education.
• Treat Yourself: If everything else is covered, enjoy a well-deserved splurge!

Real-Life Freedom

Having a robust system that works for you is like having the perfect weapon for this financial fight. A simple, intuitive interface that lets you easily track and manage your Variable Income Fund can make all the difference.

Angela, from Los Angeles, shared her success story. Her husband was essentially unemployed for nearly two years. For most, this would be devastating. But with their spending plan, they navigated it with incredible resilience:

“Because we were intentional with our plan, we were not devastated… we have been able to stay off credit cards, we have not touched our savings, and we are living within the income my husband brings in through side jobs.”

They knew exactly what they had, could avoid debt, and even enjoy family trips because they understood their financial picture. That’s the power of proactive planning!

Don’t let variable income control you. With a plan and the right tools, you can take charge, reduce stress, and gain true financial freedom. 

With a solid plan in place and the right tools to implement it, your variable income worries can become a thing of the past. You won’t just manage the Variable Income Dragon; you’ll slay it and emerge victorious, with more control and less stress in your financial life.

Ready to stop the income rollercoaster and take control of your money? Implementing a Variable Income Fund can transform your financial life, giving you stability and peace of mind no matter how your earnings fluctuate.

Don’t let unpredictable income dictate your financial future. Start building your Variable Income Fund today and experience the freedom that comes with a smart, proactive spending plan. Schedule a complimentary, no-obligation call with me at MeetWithDoug.com