There are many people who either own their own business or work completely on commission. This puts them in the situation of having irregular income. The advantage to these types of jobs is that you have some control of how much or how little you make. The downside is that you have high and low periods during the year (feast and famine) that make some months a lot of fun and others not so much. So how can those with irregular income work out a budget when their income goes up and down, sometimes very dramatically, every month?
The first step is to determine how much you need to spend every month to cover all living expenses. This includes saving for retirement, adding to your emergency fund, or any other type of saving you want to do throughout the year. Now that we know how much we are going to spend every month we need to save into an account three times what you need to run the monthly expenses (or budget). Now you have a reserve of money that you can dip into during the famine months and build it back up during the months of feast. If you have a couple of feast months in a row and end up with more money than is necessary to fill up the famine savings then you can use that money to pay off extra debt, put more into retirement, or whatever else you want to do with it. Having worked in sales for years I have a lot of friends who are on irregular income of some variety. When running this idea by them the majority (you will never convince everyone) thought this was a great idea and were going to implement this system into their own lives. A couple of them have reported back that this has really helped their marriages because they no longer had months where they had to do “without”. This stabilizing force has really changed their lives for the better and made it easier to accomplish their financial goals.
My 23-year-old son is a fantastic tattoo artist who makes a good income, yet there is the feast or famine aspect, like you spoke of. The highest percentage of his clients are students from our University, so when they are gone on breaks, less walk-ins. Luckily he developed the saving habit quite young and has built a substantial savings to back him up. He also tries to pay his expenses a month in advance, to stay on top of things. Making your living from small business and freelance work can be quite rewarding, but as you said, it does take some financial discipline to stay in the game!