http://www.salesproblog.com - Ever get confused trying to budget out your income when sales commissions are unknown. Learn my tips to keep the math adding up.

1. How To Budget Your Finances When
Earning Sales Commission
Originally seen at
http://www.salesproblog.com/how-to-budget-finances-when-earning-sales-commission/
Every once in a while I like to deviate from the
normal sales tips and tricks that the Sales Pro Blog
is known for and give you some real world advice
to help you be a better sales person. This after all
is the ultimate goal here.
Today I want to help you understand the financial
precipice that sales commission can lead too and
how to manage your finances because of it.
The concept I am going to lay out below is based off of Dave Ramsey’s Total Money
Makeover (affiliate link). Dave has been doing this for decades and my family has used his baby
steps to pay off over $65,000 in debt. In fact, as of 12/27/13 we are 100% debt free. WooHoo!!!!
So how can I help you get there? Well the first step is to start using a budget. Write out, on paper,
before the month begins, where every single dollar you earn will be spent.
The way I’ve done this is to include salary and commissions.
Since I’ve been lucky enough to have my past sales positions paying both a salary (or hourly) and
additional commission based on sales.
What we did was live off of the salary for our basic expenses.

Giving

Rent

Groceries

Utilities

Phone/Cable

Gas
How To Budget Your Finances When Earning Sales Commission
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2. 
Personal Care (haircuts, clothing, etc)

etc.
We then used my commission, or any extra cash brought in that month to pay down the debt. If you
already don’t have debt you are awesome and can apply that to an emergency fund and investments.
Although you might be thinking, I don’t always know what my commission is going to be this month.
I have the same problem right now too. I get commission on the last paycheck of the month. It’s hard
to plan out something before the month begins when you don’t know the final value until the 27th.
Well here’s my little tip to get around that issue. You use commission income from this month for
next months budget.
For Example:
Lets say I make $3,000 in salary and $2,000 in commission for the month of January. This is
assuming this is actually being deposited into my bank account. No need to worry about taxes for this
discussion.
Well instead of guesstimating the $2,000 in the January budget, I am going to apply it to the
February budget.
So for February I can accurately budget out the normal $3,000 salary and the known $2,000
commission I earned from January.
And if I make $900 in commission for February, then I would be able to use that for my March
budget.
Simply push the commission into the next month so you can accurately budget out your expenses
each month.
~ Johnny Bravo
Image courtesy of patpitchaya / FreeDigitalPhotos.net
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