Working in sales...

iVillage Member
Registered: 08-10-2004
Working in sales...
6
Sat, 09-04-2004 - 9:38pm
Does anyone have experience working in a sales job where the majority of pay comes from commission, and you never know what you'll make from month to month? My DH is a mortgage loan officer and it is SO difficult to budget because his pay is never the same. It is also very stressful for both of us because if he doesn't have a good month, we are in trouble financially the next month. :-( It really stinks.

Any advice on how to deal with this? It also makes it so hard to pay off debt...I'm afraid to spend extra towards CCs when I don't know what $$ will be coming in next month.

Thanks,

Sharon

iVillage Member
Registered: 06-15-2003
Sun, 09-05-2004 - 7:08pm

Hey Sharon. I have some experience with this. I worked in a restaurant for many years, I made an ok salary, but it was never guaranteed. You have no idea how many times I treid to input my info into Microsoft Money and set up up budget. It never worked, my income was always different, it was so hard.


However my father has it mastered, so it can be done. He has sold cars his entire life with annual incomes fluctuating $20,000 at times.


My advice would be to go back to basics. Get rid of any extras you have. i.e. extra cable channels, extra cell phones, or features on your home phone, get rid of long distance and use calling cards, and be very, very anal about utility bills.


Then, save as much as possible every month until you have at least 3 months expenses saved. Then you can start to pay down debt without being worried that you won't have the money should your DH have a bad month.


This will take discipline, and hard work but it can be done, if you are serious enough about your situation, you can do it.

~okee

(formerly oneandonlyother)

iVillage Member
Registered: 07-23-2004
Sun, 09-05-2004 - 7:14pm
Hi Sharon. Would it be possible for you to take any extra money dh makes in his good months, and set that aside in an emergency fund? If you can manage a few dollars here and there, you can use it as a cushion for any rough months that may come along...I have been selling things I dont need on ebay, and putting my change every day in a jar to just try to get something set aside...I have also been spending alot of times on the different boards here at Ivillage, like the frugal kitchen one, and the shoestring budgeting board. Is there anything you can cut down or cut out? like bringing coffee/lunch to work, cut down on eating out, cheaper cuts of meat at the grocery store, etc? If you are able to something put away for the tough times, it will make your every day life easier. I dont really know what your situation is, but I understand what its like to not know whats going to happen in any given month. My dh was out of work on and off for a period of time, and I was terrified, because we had always lived paycheck to paycheck. We had just adopted 2 babies, a 1 and a 2 year old, and I couldnt sleep or function at all because I was terrrifed. He is back to work, but we dont know if it is permanent or not. We have cut every expense down that we possibly could, so I can put away something just in case. If possible, try to avoid those credit cards..In my experience they only cause more trouble. We have CC debt in addition to all the other things I mentioned, and I am slowly but surely working on paying them down. Whatever you decide to do to handle this situation, I wish you all the luck in the world...

Hope this helps

~Dawn

 

iVillage Member
Registered: 07-22-2004
Mon, 09-06-2004 - 9:56am
My husband doesn't work in sales, but has his own heating & a/c company. Our income depends a lot on what kind of weather we are having. One thing we did in the spring was I went out and got a part time job on weekends. It really sucks not having much "family" time, but it's amazing how much that little paycheck helps out. We have had such a mild summer (I think only two 90 degree days), it has really come in handy. Plus when he is slow, I can pick up extra hours and earn a little extra.

Good luck!

Kristen

iVillage Member
Registered: 10-09-1999
Tue, 09-07-2004 - 12:46pm
Ok, here is the Dave Ramsey way to budget for incomes that are not the same every month. List the items that need to be paid in order of importance, food, house, utilities, transportation etc. Then as the money comes in pay the items in that order, hopefully you have enough to pay everything on your list. The next month do the same. I do agree with another poster, it would be important to try to put extra $ in an emergency fund for the months that you fall short or in months that you have extra $, paying ahead some items for the following month. But prioritizing your budget is the key when you aren't sure of what your income will be. I hope this helps.

cindylee
iVillage Member
Registered: 03-27-2003
Tue, 09-07-2004 - 2:37pm
I haven't been in your position in years, but here is what I would do.

I would sit down with the past one to two years' worth of records, and work out not only what my monthly bills are--food, housing, utilities, gasoline, etc.--but also what my "irregular" expenses in each category have been, on average (this would include car repairs, clothing, fees and dues, etc.).

As a previous poster said, I would then prioritize.

Next, I would set up accounts (either separate accounts the way you can do in ING or all in the same account but separated in your records through Money or Quicken) for each category of expense. Each month, I would pay the bills in order of priority. In any month where a bill actually costs less than the monthly average (in a cheap electricity month, for instance), I would set aside the difference into an account marked for that purpose.

I would do the same for the "unexpected" categories.

Some months at first you might not be able to pay everything on your list. On other months, though, you'll be setting aside money to cover more expensive months.

Now, in months when your income actually exceeds your expenses, I would go a step further and, starting at the top of your priority list, set aside one month's expense into each appropriate account. So, for instance, let's say your income is $1000 over your expenses one month. At the top of your priority list, let's say you have groceries, on which you spend $500 a month (our family of four spends less than this--most families spend more. You won't know how much you're spending until you track it--and then of course you can find ways to reduce it, but that's another discussion altogether). You would put $500 into your groceries fund. If your next priority were housing and your mortgage payment were $800, you would then set the remaining $500 into your mortgage account.

If your income again exceeded expenses in the next month, I would put another $300 into the mortgage account, and then move on down the list. I would do this every month until each category contained between three and six month's worth of expenses.

It sounds complicated, but our family does something similar even though we have a steady income, and it's really not that difficult once it's set up.

In months when your income is lower than expenses, you have a reservoir to tap. You replenish the savings the next time your income exceeds expenses.

Once you have the three-to-five-month cushion, you can reallocate extra earnings to other types of savings, like retirement or vacation or a new car or whatever.

Good luck and blessings,

Heather

iVillage Member
Registered: 08-10-2004
Wed, 09-15-2004 - 5:58pm
Thanks so much for all your suggestions! I will be spending a lot of time mulling these over in my head! I really appreciate everyone's great responses.

Sharon