How to Money · Monday, July 27, 2026
A self-employed listener, Teresa, sought advice on budgeting with a variable income ranging from $2,000 to $3,000 per month. Financial podcast hosts Joel and Matt recommended maintaining a larger savings buffer (9-12 months of expenses) and basing budgets on recent, rather than averaged, income and expenses to manage financial fluctuations.
“My question is on budgeting. I'm self employed, but I would like to do a budget, but I'm not sure where to start. My income can vary as much as two to three thousand dollars a month.”
“Well, the first tip is really to have extra savings on hand. This can allow you to smooth out your income artificially, and we typically recommend having something like three to six months worth of expenses stuffed into a savings account for most people, and if you're self employed, that numbers should be on the higher end of things.”
“I think an easy path forward in getting started with your budget is to simply look back over let's say the last three months, and then have that be the starting point for your new budget. You're able to essentially base that on actual expenses that you've incurred recently, and chances are those recent expenses are more likely going to be reflective of what you're going to spend I think moving forward, rather than what it is that you happen to have spent two years ago and having that average.”