Published in: Banks | May 10, 2020

My Variable Income Doesn't Stop Me From Saving Money. Here's How

We are committed to full transparency in our mission to make the world smarter, happier, & richer. Offers on The Ascent may be from our partners - it's how we make money - and we have not reviewed all available products and offers. That transparency to you is core to our editorial integrity, which isn’t influenced by compensation.

My earnings may not be steady, but I still manage to save a portion -- consistently. 

As a full-time freelance writer, I can tell you that there are plenty of benefits of being self-employed. I get to work from home (or whatever location I want), set my own hours, and enjoy flexibility that many of my salaried, office-bound friends cannot. But if there's one drawback of being self-employed, it's having a somewhat unpredictable income. 

Though I always do my best to maintain a steady workflow, as a freelancer, I'm not entitled to paid time off. When I get sick, or when a child of mine gets sick, work falls by the wayside. The same holds true every time school's not in session (and trust me, there are a lot of days off during the year), or when personal obligations take me away from my work. Income goes up and down accordingly. 

Despite the challenge of having an income that can fluctuate significantly from one month to the next, I still save money consistently. Here's how I do it.

A woman sitting on the floor of her living room with her cat while working on her laptop.

Image source: Getty Images

1. I follow a budget

A lot of people think of budgeting as boring, but I enjoy it. Not only does it give me a sense of control over my money, it helps me avoid spending too freely and hurting my savings efforts. 

The Ascent's best high-yield savings accounts

The Ascent's best high-yield savings accounts

Want to grow you savings? Ditch the traditional savings account for one of The Ascent's best high-yield savings accounts. These accounts can have APYs that are over 20x the national average savings account rate. Start saving today.

See the picks

I created my budget years ago by listing my expenses and analyzing bank and credit card details to see what they typically cost. Now I make it a point to review my budget every six months to make sure it's still accurate. 

Having my spending categories mapped out helps me recognize when I'm starting to go overboard, and knowing how and when to cut back helps me continue saving. For example, I have a tendency to overspend on takeout and restaurants, but having my budget helps keep that habit in check.

2. I live below my means

Since my income can vary substantially from one month to the next, one thing that's helped me stay on course savings-wise is basing my budget on my lowest months of income, rather than my highest months, or even my average. That way, if I'm able to cover my expenses and still save a little during those lower-earning months, any time I have a better month, my extra earnings can go directly into my savings account

3. I automate my savings

Like most people, I'm not immune to impulse buys or periods of extra spending. But with a variable income, that's dangerous. If I spend a little extra at the start of a month when my earnings wind up lower than expected, I risk blowing the money that should've been earmarked for savings.

My solution? I put savings on autopilot. Specifically, I set up an automatic transfer between my checking and savings accounts so that money lands in the latter automatically, before I get a chance to spend it. I also have my retirement savings automated, so that I'm contributing steadily. By going this route, I force myself to save a chunk of my earnings off the bat, and during periods when my income is higher, I manually transfer extra earnings into savings. 

Saving money isn't easy, especially without a steady paycheck. But if you're self-employed, know this: It is possible to save consistently, even when your income is anything but.

These savings accounts are FDIC insured and can earn you 20x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 20x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2020.

Savings