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UMe’s Guide to Budgeting for Gig Workers

If you’re a gig worker (and many people are these days, especially in So Cal) you know that budgeting can feel tricky, even though it’s very important. But rest assured, we are here to help U live your best financial life, it’s our favorite part of U+Me!

The Ume Emu holding a laptop that reads "budgeting"



The majority of budgeting strategies that are accessible out there assume that people are getting a regular paycheck — a bi-monthly or monthly paycheck with a similar amount. But we know that everyone’s income isn’t always that predictable. These days, a lot of people work within situations that make wages challenging to predict every month… people like freelancers, contractors, anyone who has a side hustle (F.K.A. “moonlighting”), but this even includes people working retail, restaurants, or other jobs with hourly pay and weekly hours that vary — A.K.A. “gig workers!”

If this sounds like you or someone you know, rest assured that you can absolutely adjust to ebbs and flows of varying pay and be successful at budgeting. We believe in U! It’s all about understanding what you can maintain, preparing for what you can’t control, and making smart moves to stay on track.



1. Figure Out Your Minimum Income

Understand the minimum amount you need to live on every month. Start out by creating a list of essential expenses. Common essential expenses are housing, food, health care, transportation, utilities, and debt payments. We’re talking every important thing you 100% absolutely must pay for every month, come rain or shine. Once you’ve made this list of must-haves, consider your priorities. This will help you identify what is vital for your everyday life.

Once you have your list, add it up! This total is the baseline of how much money you need to live on every month, we’ll call it your Baseline Budget. We know there are other things you want to spend money on,  things that feel very important — we get it, that artisanal coffee is life — but your baseline should include only the need-to-haves, not the nice-to-haves. Don’t worry, we’ll get to the fun stuff later on…

2. Create Your Baseline Budget

The total amount of all your must-haves in Step 1 makes up your Baseline Budget. If you have some expenses that fluctuate every month, like your electric bill, pad that line item a practical amount to keep you ready for any surprises.

3. Next, Create an Allowance

Take your average income from the previous year, and figure out what is realistic to assume above your Baseline Budget.

Now, consider your current financial values and priorities and your future goals. This is a guide for savings goals and considerable expenses you might want to take on! The key here is to be reasonable, you don’t want to count your emus before they’re hatched and it’s important to be realistic so that you don’t overestimate your income, and therefore you can avoid overspending!

Look at your real average income, and consider what income you can realistically look forward to in the coming months. If you can realistically count on some wiggle room above your Baseline Budget, then you can add some nice-to-haves to your budget at this point like those artisanal coffee beans (yum)! Think of this as an allowance. The definition of allowance is: “The amount of something that is permitted, especially within a set of regulations or for a specified purpose.” And, that’s exactly how you want to define it in your budget as well!

4. Save for Your “Fun Fund”

One rule for any budget scenario is you shouldn’t spend every penny you make. Any income that is over your Baseline Budget + Allowance should be saved! This way you can put it towards any months where your income falls below your expected budget or that well-deserved beach vacation!



You know what they say about best-laid plans… Never fear, preparation is key and knowing is half the battle!

1. Budgeting is an Active Exercise

Knowing where you are financially is a fundamental step in successful budgeting. You shouldn’t just set-it-and-forget-it! Check your budget regularly and make sure you’re on track; Weekly is a good cadence to aim for! Even if you go outside of your budget from time to time, it’s better to acutely know where you are than to go about it blindly and guess when you don’t have to!

Weekly is a good frequency to shoot for, and your money dates are a great opportunity to make tweaks to your system as you notice trends and learn!

There’s plenty of templates and budgeting apps to choose from, there are even ones that can even automate the budgeting process, but the most important thing is that you find a system that works for you. Try a few out and go with one you find easy to implement into your daily life, who knows you might even find one you love!

2. Uh oh! Watch Out For Impulse Buying

Step 3 in Part 1 should have helped you create an allowance for some of life’s little luxuries. And it’s important to have those, because depriving ourselves of some nice-to-haves can lead to impulse buying – which can totally lead even the best of us off-track.

For instance, if your favorite brand happens to do a limited edition product drop, you could consider making a purchase, but it’s also good to have an idea of what your “max” amount would be for any item. If you find you tend to overspend when you’re out having a meal with friends, you can bring cash only to keep yourself honest with those food and bev expenditures. Or, If your vice is online shopping (whose isn’t nowadays?) you can make it a little harder for yourself to make that ‘one-click’ purchase by deleting payment information on your devices. Bonus: It also keeps you safer if you get phished or hacked!

3. Cut the Fat

Review your budget monthly and consider where you can make any cuts. Even removing something small could be a benefit to you in the long run! Maybe opt for having a Hulu account with the ads? You don’t have to make it a permanent cut, but if you find you can live without that additional expense for a few months, then that’s still a win!

UMe Pro Tip: It’s always a good idea to take a look at your expenses and assess where you can make cuts!

4. Acknowledge Your Financial Successes

We see U! You’re working hard, we see it, and we applaud you! When you invest time in yourself and your budget, you’ll experience the rewards of taking your budget by the reigns! Budgeting has strengthened your financial confidence, but it can still be stressful, especially for professionals with variable income. Give yourself a pat on the back when you’ve taken the time to review your budget — do something fun!



1. Last Month’s Money is Your Funding Source

Plenty of people tend to spend their paycheck as soon as they earn it. People who are on a regular pay cycle know that money is coming on a schedule, but when your income timing and amount vary, you can’t always count on when the next paycheck will arrive or how much it will be. Therefore, a good strategy is to treat the income that was earned last month as this month’s “paycheck.” (Eg. It would be similar to if you were on a pay cycle and paid once a month).

For example, take all the income you get in July, then “pay” yourself that money on the first Friday in August — that’s your income to budget with in August. Then looking forward, don’t touch any funds you earn in August until the first Friday in September.

2. Prioritize Building an Emergency Fund

So now that you’ve got a Baseline Budget, an allowance, and you’ve put yourself on a schedule of using last month’s income to fund your current month’s budget and allowance, you should start planning for life’s little surprises with an Emergency Fund savings account.

You may have been saving the rest of your money after your budget and allowance (and a fun treat to reward yourself every once in awhile) for a relaxing vacation, but we all know that those savings might also have to fund an emergency like if you’re unexpectedly forced to take some sick days or your car suddenly needs new brakes.

Realistically, the remainder of your income after your Baseline Budget and allowance can’t be all for that holiday in the sun! (We wish it could be so, but it’s best to be practical.) Many financial advisors recommend that we all have the equivalent of at least six months of the Baseline Budget and allowance saved away. Sometimes that is not a realistic goal for some people, and that’s okay! Start by saving enough for 1-2 months. Save as much as you realistically can, and you’ll be on your way to the advised amount faster than you think!

3. Remember it’s OK to be Picky

Any financial commitment can be risky for any budget, especially when on a variable income budget. Commitments like locked-in phone contracts and gym or club memberships — basically anything that results in an ongoing expense that isn’t part of your baseline budget that you can’t get out of without some kind of penalty.

For instance, we’re lucky that so many mobile phone companies will offer to buy you out of a contract to switch these days, or there are others who offer no time-limit contracts if you are free of a committed plan. This is just one example — and remember be picky: when you have an option to not be locked into a contract, don’t! Keep an eye on those free trials and don’t forget to check the fine print.

4. UCWC (Use Credit With Caution)

You know as well as we do, credit debt is one more monthly expense you cannot escape. Utilizing credit is never not a risk — for anyone — but especially people with a variable income budget.

Using your credit card(s) can seem like a good solution “for now” when you’re in a pinch, but if you find you can’t cover those expenses, those fees are going to add up, be it interest or additional fees, like penalties. Suddenly that $6 latte ends up costing a lot more!

For many people, it’s unrealistic to never use credit, especially when you’re building credit because you do want to use it reasonably, but ideally you want to use it sparingly. If you can, consider it a last resort option.

UMe Pro Tip: Use your credit card for expenses that you can pay off at the end of the month, so you won’t paying more for your purchases.

5. Don’t Forget About Taxes

Taxes can be deceptive but you know what to do! Depending on your employment circumstance, you may need to budget for the taxes that you’ll owe on your income.

Everyone’s tax situation is different, but the basic thing you need to know is this: if you are considered a contractor (so you get a 1099 from your clients — usually the case for gig workers) then your checks don’t have any taxes taken out, so you need to be on top of that yourself. You might need to pay your taxes quarterly or owe self-employment tax—and that can add up to a big (surprise) bill during tax season if you haven’t planned ahead!

Be thorough in reviewing your income including any pay stubs and checks to see, if any, what tax funds are being withheld from your pay. If taxes aren’t being withheld, you’ll need to set aside money regularly to pay the IRS.

If you’re not sure what to do, if taxes are withheld or how much, talk to a tax professional and get guidance on a good strategy to tackle taxes. Trust us, it’ll be worth it in the end!

UMe Pro Tip: You can set up a special free savings account within your membership account and designate it for anything you’d like, like taxes – and funnel in money each time you get paid.



Phew, that was a lot of information! We want to make sure U are really set up for success, so we dug deep on this subject. Remember, we are here to help. Just give us a call with any questions. Happy Budgeting!


Disclaimer: U matter to Me (all of us) at UMe — and that’s why we do our best to deliver helpful information on our blog. Please note the following: (1) UMe Credit Union works hard to make certain that the information we post here is as accurate as humanly possible. But as you know, information can change and evolve quickly. While we try to update the blog on a regular basis, the content of some older posts may not be correct or up-to-date. (2) Some destinations on the World Wide Web that we link you to will exist on external websites. UMe Credit Union does not officially endorse any connected sites, nor do/did we compensate or get compensated by any entities to be featured in our posts (unless otherwise noted). (3) Everyone’s situation is unique and we advise you to consult with our personal bankers or your finance, tax, or legal professional for advice individualized to you!