How to Budget for the Holidays with a Fluctuating Income

Having a fluctuating income can make it stressful to budget for big ticket months like the holiday season. Anticipating this expensive time of year can help relieve some of the stress of the holiday season. Here are a few budgeting and saving tips for the holidays to help you set aside enough money for that special time of year.

List All Your Holiday Expenses

You will want to make a list of what you expect to spend during the holidays each year.  This includes more than gifts, but also miscellaneous expenses like wrapping paper, extra food costs, cards and postage, decorations, or any holiday activities you want to do.  If you’re planning to travel for the holidays, you’ll want to include those expenses in your budget.  Once you’ve got an idea of what you’ll be spending on holiday expenses, you can divide that by the number of remaining paychecks you will receive between now and the holidays to determine the amount per check you need to save.

Make a List of All Your Bills

Start by listing out all your monthly expenses, including fixed, variable, and other expenses.  Fixed expenses always stay the same, such as rent, insurance, phone bill, etc.  Variable expenses occur each month but vary in amount, such as your utilities, groceries, gas, etc.  Lastly, make a list of any other things you spend money on each month, such as going out to eat, getting your haircut, and other discretionary spending.

Find Your Minimum Monthly Income Budget

Budgeting tips for a fluctuating income suggest you calculate a minimum monthly income budget.  Look at your pay stubs over the last year to help you determine what is your minimum monthly income. This will help you calculate a budget for the months in which you earn the least, giving you the luxury to set aside extra money earned during the months you may make more.  You can then use this money to save for holiday gifts and other discretionary spending.


You may not end up saving enough money to buy everything on your wish list when the holidays come around.  One of the best budgeting tools is to prioritize the items on your list in order of importance.  Can you scale down the expenses for your holiday activities to save more money for gifts?  Can you replace store-bought decorations with homemade ones?  Can you shop at different times of the year to ensure you get the best bang for your buck?

How To Save For the Holidays

Cut Back on Discretionary Spending

Another one of our holiday saving tips is to cut back on discretionary spending in the weeks approaching the holidays.  If you can forego going out to eat a few times or your spouse can learn to cut your hair, this can help you reach your spending goals.  Try looking at your budget to see what can be dialed back in the interest of saving some holiday cash.

ACE has plenty of financial literacy blogs for budgeting for all your basic needs.  Try out our budgeting tips and keep the holiday season bright!