Personal finances in sales

(dramatic rhythmic piano music) (clapperboard clicks) - So, I'm paid on performance and my husband is too. So, when we were first looking at buying a house, we sat down with a financial advisor and what is the first question? "How much do each of you make?" Right. And we kind of sat there and said, "Oh, like, between x and y, "and here's our W-2 from last year. "It's kind of hard to predict because this is only Q2." And that is indicative of a larger problem for salespeople. - It is, it can be a real problem because if you're in sales, your income is going to fluctuate. Hopefully, it's going to go up, but let's be honest, it's a lumpy business, as a friend of mine says. And so it's going to go up and down, and you've got to be prepared for it. - Right, I learned the term variable income. Which is like the professional term for lumpy, I think. But the more planning you do in this, I think we can both agree, the better. It takes an extra element of planning to manage it, but when you do, you're able to show up for your customer with less nervous energy. - Yeah, and that's the dots that I want to connect here is if you want to show up as your best self, not your scared self, not your frantic self, not your desperate self. You need an emergency fund. So, any financial planner will tell you you need three to six months of an emergency fund in the bank. What I will tell you is, as a seller, if you cannot cover six months of living expenses based on the emergency fund you have in the bank, you are having a chilling effect on your ability to sell. - That's true. - Yeah, because six months, if you can get six months in the bank, then you know, "If I don't make this deal I'm okay." - And it seems counter-intuitive-- - Your subconscious is more at peace. Even if it doesn't feel like that on the surface, when you're struggling to manage input and output, your buyer is feeling it. - Yeah, and they feel that graspy energy. And so, even if you have a lumpy income, you need to be really clear on what is your minimum that you need to survive. - And I think on that note, it's so easy to fall into a feast and famine mentality, and I have to talk myself out of it all the time. And when you make a big sale you want to go out and just be like, "Oh, let's go to Europe!" - Yeah (chuckles) - But that's not always the best idea. - Yeah, if you make a big sale and you've got six months or a years income in the bank, go to Europe. But if you don't, my advice is know your bottom number. What's the number that you need to get through every single month and pay all your bills? And then any time you make above that, put it into a savings account until you have six months worth of that in the bank. 'Cause if you have that, you will actually start to close more business because you'll show up more confident, you'll have a better mindset. - I think that your bottom number is a really important point, here. And some good advice I got is to make a budget based on your lowest paid month of the year. So, even if you have 12 months of your lowest paid month, somehow, you're covered. And that doesn't mean the budget includes things like vacation and shopping and home improvements, but it's bare-bones. All your bills are paid and you're able to quiet that fear. - Yeah, and so that's the kind of lifestyle you want to set up with your rent, your mortgage, whatever it is. - Right - Where you can survive on that lowest level. So, what's an example of some numbers? - So, let's say you make between, like, four and seven every month. - Four and 7,000. - Four and 7,000. Your bare-bones budget would be at four. So, four times 12, 48,000. You need to be living your life in a way where your bills are covered on 48,000 a year. And then anything extra goes for those fun things like vacations and things that are more optional. - Yeah, so the thing I want you to take away from this is a variable income should not be affecting your confidence as a seller. Make a plan, know what your bare-bones is, get that emergency fund in the bank, and then you can show up as your confident, best self for your customers, which will result in you making more money.