I was so broke when I began my sales career… (How broke were you?)
I’ll tell you how broke I was.
*** I was so broke, if anyone had robbed me back then, all they would have gotten was practice.
*** I was so broke, someone held me up at the ATM one night and felt so sorry for me, they bought me dinner.
*** I was so broke, I couldn’t even afford to pay attention.
When I am speaking to groups, I often refer to my story and how I went through some very difficult financial times. Some of the reasons that I experienced those financial difficulties were beyond my direct control. However, if I had been exercising good fiscal management I could have certainly made it through those times in better shape.
Most sales people I know are not the best at managing their personal finances. I am convinced that the two primary reasons that this is true is because their commission incomes drastically fluctuate; and they have never been taught how to manage their money.
Remember that if your finances are out of control – your family life will soon get out of control as well. I have heard it said that couples only fight about three things; sex, money, and how to raise your children. I may not be able to help you with two of those things – but I can give you some pointers on how to handle your money. Most of the things I practice are things I learned from Dave Ramsey. I highly recommend you get his material and use it.
- Write out a family budget. Include your spouse or significant other in that process.
- Prioritize your budget based on where each bill ranks in importance in your family life.
- Save money for emergencies. Most financial planners say you should have 3-6 months of expenses in your savings account. For commission sales people, I recommend a minimum of 6. If you don’t have that much now – START. You will never get there if you don’t take the first step.
- If you are an independent contractor – open a separate checking account for your business/sales expense use. Use an accounting software such as Quicken to keep up with your income and expenses for tax purposes.
- Save money for your taxes by having that money diverted into a savings account before you ever get it into your hands. If you are an employee, make sure that enough is held out of your commission checks to cover your taxes. If you are an independent contractor, check with a CPA to find out how much you should save based on your personal situation.
- If your income varies, as is the case in most commission sales positions, when you get paid – pay the items on your family budget in the priority order you set for yourself. Do not pay bills out of order. And if you don’t have enough to pay the next bill – hold the cash (don’t spend it) until you do have enough.
- Eliminate debt. Dave Ramsey teaches a great process called the debt snowball that I have used successfully.
- As you eliminate your debt, it will free up money for you to use in other important areas.
There is much more to learn in this area than we can cover in a single blog post – but if you will apply the 8 steps above consistently, you will be miles ahead of most sales people – and your family will have a much better lifestyle.
What financial matters worry you the most?