Welcome to BW’s Smart Money podcast, where we tackle your real-world money questions. In this episode, discover how to manage irregular income, set sustainable financial goals, and reduce mindless spending for a better financial future in 2025.

Learn how to create a budget when your income comes in irregular chunks, practical ways to cut unnecessary spending, and stay on track with your financial goals. Hosts Sean Pyles and Sara Rathner dive into breaking down irregular income into manageable budgets and eliminating habits that harm your finances, such as excessive phone use. They kick things off with a discussion on financial New Year’s resolutions, offering advice on identifying and changing habits, setting achievable goals, and making lasting changes. Then, personal finance expert Kim Palmer joins the hosts to talk about budgeting with irregular income, including strategies for dividing large paychecks, utilizing high-yield savings accounts, and tracking expenses.

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Episode transcript:
This transcript was generated from podcast audio by an AI tool.

Sara and Sean discuss their approach to New Year’s resolutions and the idea of focusing on what to stop doing rather than adding more to your plate. Sara shares her goal of reducing mindless phone scrolling in the evenings, while Sean talks about his struggle with the same habit and the app he used to break it during his CFP exam prep. They emphasize the importance of simplifying and focusing on what truly matters, with Sara aiming to spend her free time more productively, like reading more books. Severance season two will be airing on Apple TV soon. If you haven’t watched it yet, it’s worth skipping the doom scrolling for. It’s like television that feels like doom scrolling all the time, and it’s great. This approach will help me become a more conscious consumer and spender, and I’ll have a nice spending journal to reflect on. Additionally, I can see the money I save by not buying something as savings that I can transfer to a savings or investment account. I plan to implement this strategy for the first three months of the year and then reassess to refine my sustainable spending habits. I will discuss my progress in April and share insights on my podcast. Let’s continue to work towards financial stability together. Not long ago, I found myself in a similar situation. During my maternity leave, I unexpectedly received short-term disability payments in a lump sum, equivalent to two months of my salary. To manage this windfall, I transferred the funds to a high-yield savings account and set up automatic transfers every two weeks. By dividing the money into smaller amounts and mimicking a regular paycheck schedule, I was able to avoid the temptation of spending it all at once.

This approach not only helped me regulate my spending but also allowed me to earn more interest on the money sitting in my savings account. It was a practical way to handle a large sum of money and ensure financial stability during a period of sleep deprivation.

Managing a budget over an extended period can be overwhelming, but breaking down the lump sum into monthly allocations can make it more manageable. Keeping the funds in a high-yield savings account, earning interest while drawing out a fixed amount each month, can help maintain financial stability. Additionally, setting aside money for annual expenses, taxes, and using budgeting apps like YNAB or EveryDollar can further streamline the process and alleviate financial stress. One could mention rent, while another might refer to utilities, and they don’t necessarily have to be physical envelopes. It could also be a digital system, like the Goodbudget app, which follows the envelope system approach. The key is to find a system or app that you enjoy using, so you actually look forward to checking where your money is going. BW has an article on the best budget apps of 2024, which you can find in the show notes or by searching for BW best budget apps.

I personally haven’t found a budgeting app that makes budgeting enjoyable yet. It’s more about feeling responsible and in control of my finances, which is why I use a budgeting app. Maybe there’s an app out there that rewards you with $20 every month you stick to your budget, that would be motivating.

When money feels tight towards the end of a pay period, leveraging multiple bank accounts can be helpful. One account can be for savings, where you tuck away money immediately to make it less accessible, while another can be for monthly expenses. Trimming variable expenses like takeout, subscriptions, dining out, and entertainment costs can also help save money.

Saving is crucial, especially for those with intermittent or unreliable income. Having an emergency savings account, starting with a goal of $500, can provide a cushion during lean months. Setting up automatic transfers to this account can help build savings over time. Managing separate accounts and labeling them for specific purposes can help stay organized.

Thank you for sharing your insights, Kim. It’s important to stay organized with separate accounts and automatic transfers for savings. If you have any money questions, reach out to us at (901) 730-6373 or email us at [email protected] Visit nerdwallet.com/podcast for more information on this episode and follow the show on your favorite podcast app for new episodes. Remember, we are not financial or investment advisors.

sentence: Please let me know if you have any questions.

Let me know if you need any clarification.