When I used to be an engineer, and Kaci was working full-time in social work, we had consistent and predictable income. So managing money was a piece of cake. 

 

But those days have LONG disappeared…

 

I haven’t earned a predictable income since November 2020. 

 

So I’ve had to adapt and evolve our money management processes as our circumstances have changed over the years. 

 

Managing inconsistent income is one of the major thorns business owners have to deal with.

 

But of late, 

 

I’ve come to realise that maybe inconsistent income isn’t such a bad thing. 

 

Because like most things in life, it’s normal to have ebbs and flows and changes in the seasons. 

 

There are seasons when you’re crushing it and money is flowing in like the Niagara Falls. And there are seasons that feel more like the ice age where the flow has stopped and things have frozen solid.  

 

Neither season is better. They both have their beauty and benefits. 

 

The challenge becomes finding a way to manage your money so that your finances don’t freeze over during the slower months. 

 

For the past 12 months, 

 

I’ve adopted a new process for managing my business finances to work with the ebbs and flows of inconsistent income. And it’s worked incredibly well for our situation. 

 

Here’s how it works:

 All revenue flows into my business ‘Income’ account.

 

From there, 10% goes straight to our personal ‘investment’ account. This is a non-negotiable and always the first allocation I make.

 

10% goes straight to my business tax account (mainly to cover BAS).

 

Then I allocate money to my business ‘OPEX’ account and personal ‘Everyday’ account, based on the existing balances in there, as well as considering what expenses we have coming up (all of our recurring expenses are setup as tasks on our Google Calendars, so we can quickly see what’s coming up). 

 

The remaining money is then moved into the business ‘Buffer’ account. 

 

The purpose of this account is to act as a float for my business expenses and our personal expenses. And I only move money from here when required.

 

One of the best benefits of having this buffer account is that it’s helped keep us disciplined with our spending, and it becomes a reservoir for slower income months. 

 

Because if that surplus cash was just put straight into OPEX/Everyday,  then we would find a way to spend it (Parkinson’s Law). And if we just called it ‘savings’, we’d probably still end up dipping into it, but it would feel like failure.

 

It’s been a slight shift, 

 

But sometimes all it takes is a couple small changes to make your finances feel drastically different.  

 

I had a couple big income months in May/June, which meant I had a large surplus built up in the buffer account. And this felt great. Because I knew we had a couple of months’ worth of money there to cover business expenses, rent, etc. 

 

July/August have been slower income months in business, but unlike in the past where we really felt the pinch, this time we haven’t. Because we built up our buffer during the strong months.

 

I’ve been coaching individuals, couples and small businesses on money management for seven years, and what I’ve found is there is no one size fits all solution for everyone. 

 

Everyone’s situation is unique. Everyone’s goals are different. Everyone has different circumstances. 

 

There’s no magic formula – it’s about creating a system that aligns with you, your relationship, and your income (whatever shape it takes).

 

This is the stuff I love geeking out on with my clients.

 

Finally, 

 

Whatever financial season you’re in right now – flowing or frozen – I hope this newsletter gives you a new perspective that maybe inconsistent income isn’t such a bad thing as most marketers would have you believe. 

 

It’s a normal ebb and flow of life. 

 

The trick is to learn how to enjoy each season for what it is.  

 

And to build a money system that can endure all seasons.

Have a great day,