Trying to save a fixed amount with variable income almost always ends badly. Here we tell you how to set a percentage instead of a fixed amount, calculate your moving average of income, and distribute savings into piggy banks with clear goals.

Download the belo app and set up your savings goal according to your account and current conditions.

Why a fixed amount doesn't work with variable income

Someone who earns a fixed salary can decide to save $50,000 per month and keep it up for twelve consecutive months.

Someone who works by the day, by client, or by project faces a different reality: one month they earn twice as much as the previous one, and the next it drops to half. 

Trying to save a fixed amount with variable income leads to two possible outcomes, and neither is good. Either the amount is so low that it doesn't move the needle, or it is so high that in slow months it leaves the account without a margin to cover basic expenses.

The problem is not a lack of discipline, but using a tool designed for stable income when yours is variable. 

The key to saving with informal income lies in setting a percentage instead of a fixed amount. This percentage adapts automatically because it is applied to what actually came in, and what came in changes every month without breaking the system.

How to calculate your base percentage?

For the percentage to make sense, it needs a reference point. This point is your moving average of income from the last three months. 

Add up what you received in the last 90 days and divide it by three. If in March you made $300,000, in April $180,000, and in May $420,000, your moving average is $300,000.

This number helps you know if the month you are living through is low (below 80% of the average), medium (between 80% and 120%), or high (above 120%), and to define how much to save per month using a scale that adjusts to your type of income.

Savings percentages according to income type

With the previous example, May was a high month ($420,000 exceeds 120% of $300,000). If you are paid by the day, May's savings would be $420,000 x 20% = $84,000.

April was a low month ($180,000 is below 80% of the average), so savings drop to $180,000 x 10% = $18,000. 

This difference between $84,000 and $18,000 is exactly what makes the system viable: when less comes in, the saving eases up without disappearing.

Buffer and piggy bank distribution

A freelancer with stable clients can project how much will come in next month with reasonable accuracy. Someone who gets paid by the day or by client doesn't have that visibility, and that's why they need a buffer rule before allocating any money to savings.

Before applying the percentage, verify that after setting aside the savings, your account has at least the equivalent of 15 days of your fixed expenses (rent, utilities, transport, food).

If subtracting the calculated savings leaves you below that floor, cut the percentage in half. If you can't even make it with half, you don't save that month, because the system is designed to recover in good months.

Once the buffer is covered, the next step is to decide where that money goes. Using a single savings pool creates the temptation to withdraw for anything. 

The method of saving with variable income works best when savings are split into separate piggy banks with clear goals. One effective distribution is as follows:

• 50% of the saved amount goes to emergencies, until accumulating the equivalent of two months of expenses.

• 30% goes to a specific goal, whether it is a trip, work equipment, or moving.

• 20% is reserved for taxes or monotributo payment if you are registered.

Going back to the May example with $84,000 of savings: $42,000 would go to emergencies, $25,200 to the chosen goal, and $16,800 to the tax reserve.

In April, with $18,000 of savings, the amounts decrease proportionally. What matters is that every single peso has a destination before it arrives.

Automatic deposits for informal savings

The method so far is manual: calculate, verify the buffer, distribute. 

Consistency in saving with informal work depends on eliminating repeated decision-making, because every time you have to actively decide to save, you compete against the urgency of immediate spending.

On belo you can activate automatic savings by choosing the exact amount, currency (pesos, dollars, or stablecoins), and frequency (daily, weekly, or monthly).

There are no minimums or maximums, which allows you to adjust the numbers to the actual figures of each month. If you get paid daily and your income comes in irregularly, a weekly frequency works better than a monthly one because it spreads out the effort.

If you get paid by project and the money comes in at one or two points of the month, the monthly frequency adapts better.

You define the amount for each piggy bank according to the 50/30/20 distribution, choose the frequency, and let it run. If conditions change in any given month, you can pause, edit, or cancel any automatic deposit from the app without penalty or paperwork. 

This flexibility is what makes the system withstand difficult months without breaking. Every three months it is advisable to recalculate your moving average with the new data, adjust the percentages if your type of income changed, and update the automatic deposit amounts.

This quarterly recalculation takes ten minutes and keeps the system calibrated to your reality, which is exactly what a fixed amount can never do.

Download the belo app and build your savings goal according to your account and current conditions.

Frequently asked questions about how to set a savings goal when your income is irregular

What happens if no money comes in one month?

The buffer rule covers this case: if after applying the calculated percentage there is no margin to cover 15 days of fixed expenses, you do not save that month. The system is designed to recover in good months, so skipping a month does not break it.

How many months of history do I need to start?

Three months is the recommended minimum because it captures variations without overly distorting the result. If you have been working independently for less time, you can start with the data you have and adjust the average as you add months.

Can I use percentages other than those on the scale?

Yes. The proposed scale is a starting point, not a fixed rule. The important thing is that the high-month percentages are significantly higher than the low-month ones, so that periods of higher income compensate for the slower ones.

In which currency is it better to keep emergency savings?

For the emergency fund, the currency you use to pay your daily expenses is the most practical, because it avoids having to convert it when you need it. The portion allocated to medium-term goals can indeed be saved in dollars or stablecoins to protect it from inflation.

How often should I review the percentages?

Every three months is enough in most cases. If your income type changes significantly, such as shifting from daily pay to long-term project pay, it is worth adjusting the percentages before that period is up.