INA Weekly Brief

5 Tips for Saving Money with an Irregular Income: For Nannies, Newborn Care Specialists and New Business Owners

June 11, 2017
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Working as a nanny, a newborn care specialist, or starting your own business will reward you with a variety of skills and experiences that don’t come with a regular 9-to-5. In these positions, you may be offered a certain level of flexibility as well as the ability to control your working hours. 

However, this unpredictable schedule comes with one major financial drawback: an irregular income that will make it difficult to plan a stable budget or put away money for the future. But with some careful planning, prioritizing and a serious examination of your expenses, there are a few solid strategies you can use to ensure a comfortable lifestyle and even a healthy savings account.

Begin With Your Bare Minimum Expenses

Knowing where to begin when you sit down to create your budget is often half the battle when your income is inconsistent. Start by assessing your monthly expenses and determine which are absolutely essential for you to survive through one month. These include housing costs, food, transportation and utility bills. You may also want to factor in any debts you have such as credit card bills or student loans. Assess your debt-to-income ratio and decide what you can spend on other discretionary expenses.

While your housing costs (such as rent or mortgage) are simple to determine as they are the same every month, you may have to make some calculations to figure out how much you are spending on groceries, gas, insurance and electricity. Take a look at how much you’ve spent on these expenses in the past few months and find out an average.

Figure Your Monthly Discretionary Expenses

After you determine your necessary expenses for each month, you’ll want to come up with categories for discretionary expenses – items that aren’t as necessary. These items usually include money spent on cable television, other entertainment, dining out, hobbies or that early morning latte. When you take a real hard, cold look at these expenses, you should be able to find a few areas that are taking a bite out of your income. Consider cutting back on any of these that you are willing to sacrifice or that you don’t use often, such as a gym membership or subscription service.

Use the 50/30/20 Rule to Budget

Now that you’ve determined your essential and nonessential expenses, formulate a budget. The 50/30/20 rule breaks down your expenses into three categories. Your essential, bare minimum expenses should be 50 percent or less of your budget. 30 percent should go towards non-essential items that you want, and 20 percent should be allocated for the future and placed into some type of savings account. Creating this type of budget ensures that you’ll still be able to make it through the month if your paycheck is cut in half. It also makes you account for lifestyle choices and helps you determine where the extra money is being spent. Lastly, it helps you save money for the future.

Creating an Emergency Fund

Developing an emergency fund is a smart idea for those unexpected times when cash is required for an auto repair or medical bill. The last 20 percent of your budget should go into this type of savings fund. To help create this type of fund, you can save money in a number of ways.

  • Make gifts instead of buying them
  • Create a shopping list and stick to it
  • Repair your own clothing
  • Negotiate rates if you have a credit card
  • Avoid convenience or fast foods
  • Cancel club memberships that you may not use

Cutting back on nonessential items is one of the best ways to save some extra money. Although they may seem like small expenses at first, they can add up over time.

Pay Yourself First

Make paying yourself first a priority. After you determine how much you’re spending each month, give yourself a “salary.” If you get into the mindset that this salary is a necessary item, it should help you accumulate more money in your savings account. You can play with this amount for a few months until you find a figure that is suitable for your needs, but after you’ve determined a specified amount, stick with it!

Saving money with an irregular income as a nanny, newborn care specialist or new business owner does take some hard work and examination. However, once you put your plan into action and understand where your money is being spent, you’ll be able to calculate how much you can save and create a system that provides you financial stability.

Beth Kotz is a contributing writer to She specializes in covering financial advice for female entrepreneurs, college students, and recent graduates. She earned a BA in Communications and Media from DePaul University in Chicago, Illinois, where she continues to live and work.