How to manage irregular income as a founder

It’s common for founders to build a company without building a stable personal financial system. As a result, you might feel like one bad month on both fronts can cause everything to come crashing down.

Most founders don't take a consistent salary — or any salary — while they’re focused on growing the company. But managing irregular income isn't about discipline or “being better with money.” It's about designing flexible personal financial systems that make sense for founder life.

A few basic principles and practical tactics will help you feel stable, without forcing you into a monthly budget that falls apart when reality hits.

For many founders, the question isn't if income will be irregular, it's how irregular will it be? Delayed salaries or lump payments are common when you're bootstrapping or preserving your company’s cash runway. Even when money is coming in, you might be reinvesting most of it back into growth, such as hiring, inventory, and marketing. You might also experience tight periods between fundraising rounds.

A report by accounting platform Pilot found that median founder salaries were down 43% in 2025, compared to 2024. “You can have all the benchmarks you want, but the reality is that you have to get to a consistent level of profitability before you can even dream of paying yourself [a decent salary],” Sharon K. Gillenwater, co-founder and CEO of ExecutiveIQ, said in a video shared on LinkedIn.

Financial planning for entrepreneurs often includes a lot of stress over a low salary and irregular income. And, because you're supposed to be “good with money” (you're running a business, after all), there's a shame loop that kicks in: “I should have this figured out by now.” That leads to avoidance, which leads to surprises, which leads to more stress.

Your goal shouldn’t be to eliminate irregular income, because that's not realistic for most founders. Instead, here are some common founder personal finance principles for managing income volatility.

1. Pay yourself something — even if it’s symbolic

As a founder, paying yourself from your business to your personal account matters more than the amount. You’re setting the expectation that the business needs to earn enough to pay you, just like it pays anyone else on your team.

There are a few ways to structure this:

• Baseline draw or salary: The same amount every month, regardless of what comes in. 
• Baseline plus quarterly top-up: A small consistent amount, plus a bonus-like distribution when there's extra cash.
• Percentage-based pay: A fixed percentage of whatever cash comes in

Pick a startup founder salary planning approach that matches your business’s cash flow needs. The point is consistency: something you can count on, even if the amount is small.

2. Separate your business and personal accounts

Mixing business and personal finances is one of the fastest ways to create anxiety. When everything lives in one account, you lose visibility. You can't tell what's “yours” versus what belongs to the business. You may accidentally borrow from one to cover the other.

Separation makes taxes simpler and spending decisions clearer. It also prevents you from intermingling business and personal expenses (which can create accounting issues later, depending on your business structure).

Mercury personal banking helps you keep your personal account separated from your business, while also accessing features like auto-transfers and investing.

3. Build a personal buffer (aka your own runway)

Just like your business has runway, you should consider your personal runway: the number of months you can cover your baseline expenses without any new income. 

You can think of your personal buffer as a tiered approach: 

• Shock absorber: This is a small emergency buffer that can cover an unexpected expense, like a car repair or medical bill, without derailing everything.
• One-month baseline: You can cover next month's essentials, even if nothing comes in.
• Two to three months baseline: A larger buffer means more breathing room, so you can stop making decisions from a place of panic.

Creating a personal runway can help create a grounding sense of space and flexibility, which could reduce the chances that you’ll make desperate business decisions based on your personal finances. When you're not worried about making rent, you can negotiate better, wait for the right opportunity, and avoid making deals that’ll hurt your business long-term.

4. Automate savings based on percent of income, not a fixed amount

Lots of people rely on automatic transfers between accounts, but this doesn’t work when your income is uneven. Telling yourself “I'll save $500 a month” doesn't work when some months you bring in $2,000 and others you bring in $15,000.

Instead, you’ll want to consider making transfers based on your actual money coming in. A simple rule: Every inflow gets divided immediately into different accounts for different purposes. For example, this could mean sending 25% to taxes, 10% to grow your buffer, 50% to cover your everyday expenses, and 15% to flexible/discretionary spending. 

The percentages you choose depend on your situation, but the principle holds: Pre-determine the amount of your split and automate the transfers, if possible.

5. Use high-yield savings for idle cash and short-term goals

If you need to use your money within a year, keep it in a bank account (not invested). A high-yield savings account earns interest, so your accounts can grow while also remaining accessible.

It also helps to separate “buffer” from “goals.” Your tax savings shouldn't live in the same “bucket” as your vacation fund. Open different accounts for different purposes. Mercury offers personal high-yield savings accounts with no minimum balance.

6. Track your personal burn rate

You probably have a firm grasp of your company’s burn rate. But do you know your personal burn rate?

Here’s a formula for calculating the burn rate for your personal finances:

Your personal burn rate = baseline monthly expenses + known irregulars (taxes, insurance, annual expenses)

Tracking this number lets you answer one simple question each month: “Did my runway grow, shrink, or stay the same?” The answer tells you a lot about your overall personal financial health — and can help you make better financial decisions.

Now, you understand the six principles (detailed above), but you might be asking yourself, “What do these look like in real life?” Principles are useful, but you’ll also need to adopt concrete personal cash flow strategies. Otherwise, you’re still doing the constant mental math about paying your mortgage next month or spending money on a family vacation.

Zero-based budgeting

Budgeting with inconsistent income doesn’t look the same as budgeting on a salary. Zero-based budgeting means giving every dollar a job when it arrives. You’ll have fixed expenses that have to be paid, and anything after that gets divided into different accounts or “buckets” (taxes, buffer contribution, short-term goals, flexible spending) until you have $0 remaining. 

Zero-based budgeting is typically based on a monthly budget. But if your income is irregular, you could do this based on each paycheck or distribution. Your amounts may change, but the variable income budgeting process is the same.

Tip: Map out a “$10k month” allocation versus a “$3k month” allocation (or whatever your high and low variations might be), so that you’re not making decisions on the fly.

The envelope method 

The envelope method is an old-school, cash-based approach. With the envelope method, you’d use cash and divide your paychecks into envelopes with different labels. When paying for something (like a meal at a restaurant), you’d pull money from that specific envelope. 

Even in an increasingly cashless society, the concept still works. You’re used to managing cash flow as a founder, and the envelope method is based on the principle that you spend the cash you have available. 

Instead of physical envelopes, use digital buckets (or “envelopes”), such as separate savings accounts or sub-accounts. You can also use budgeting apps that allow you to keep track of your expenses in more detail.

A few “envelope” ideas to get started:

• Recurring bills (rent, mortgage, utilities, subscriptions)
• Monthly regular spending (groceries, gas, subscriptions)
• Taxes (Tip: Set aside funds to pay taxes before if feels like “yours.”)
• Buffer (aka personal runway)
• Short-term goals (travel, big purchases)
• Flexible spending (a “catch-all” for other expenses)
• Fun (spending on hobbies, your family, or yourself)

Schedule “money check-ins” 

Put a recurring 30-minute calendar invite on your schedule for your monthly money check-in. During that time, look at your expenses compared to your envelope or zero-based budget, make transfers to different accounts, and plan for the upcoming month, if you know your income will be different. 

Tip: If you have a lot of expenses or activity on your accounts, set aside 10 minutes per week to do a quick review. This isn’t to add stress, but to keep you aware of your income versus spending. 

Make your system easy to follow

The best system is one you’ll actually use, whether it’s a spreadsheet, an app, multiple accounts, or another method. If it’s too complex, you’ll find yourself spending too much time “maintaining the system” or accidentally mixing personal and business funds.

Tip: If you keep all of your accounts at one bank — both business and personal — it’s easier to see a full financial picture in one place, instead of logging into multiple banking websites.

Here's a quick reference for matching your situation to an approach.

While low salaries and irregular income are normal for founders, they create a specific kind of stress. Even when the business is technically “fine,” uncertainty about your personal finances hums in the background. 

Personal financial stress management at a startup is important. If you pay yourself a consistent baseline, rely on runway planning for founders, and set up buckets for different financial needs, you may reduce the mental load of constantly worrying about your income. You can focus on building your business, instead of wondering whether you can cover your expenses next month.

Mercury supports the full picture of founder financial wellness — not just business banking, but personal banking as well. Check out Mercury personal banking products to learn more.