Topic Guide
What Is Irregular income?
Irregular income is a subject covered in depth across 1 podcast episode in our database. Below you'll find key concepts, expert insights, and the top episodes to listen to — all distilled from hours of conversation by leading experts.
Key Concepts in Irregular income
Hills and valleys fund
This is a financial strategy introduced by Dave Ramsey designed to manage income volatility for individuals on commission-based or fluctuating salaries. It involves proactively saving surplus income from high-earning months into a separate account. This fund then serves as a buffer, allowing individuals to draw money during low-earning months to cover essential expenses and maintain a stable monthly budget.
What Experts Say About Irregular income
- 1.Budgeting effectively on a commission-based income requires a specific strategy to manage income volatility.
- 2.A caller on the show reported a fluctuating income, ranging from a $2,500 monthly baseline to an additional $700-$3,000 in bonuses, or sometimes no bonus at all.
- 3.Dave Ramsey proposes establishing a "hills and valleys fund" as a solution for individuals with inconsistent income.
- 4.The "hills and valleys fund" involves actively setting aside extra earnings from high-income months to cover expenses during lower-income periods.
- 5.For example, when an additional "$1,000 bucks or so" is earned in a good month, it should be deposited into this dedicated fund.
- 6.During months where only the "$2,500" baseline is earned without commission, money can be withdrawn from the fund to ensure regular bills are paid.