Financial strain can creep up on anyone, especially if you work as a recruiter on a commission-based income where regular and reliable monthly pay isn’t always guaranteed. So with this in mind, how do you ensure that you plan your money sensibly with these irregular and varying pay cheques?
Here, David Rankin from Creditfix, shares some top tips on how to plan and budget ahead to ensure you have convenient, affordable arrangements in place for those not so lucrative months at work.
1. Get to grips with your outgoings
Firstly, if you haven’t already, list your outgoings, with the most regular and important at the top – all the way down to your Friday evening drinks and coffees with prospective candidates. Any outgoings you are certain about like your mortgage / rent or Council Tax, make sure these are added and accounted for.
It’s probably handy to be overly cautious with these figures. For example, with your energy bills put an additional ten or twenty pounds on to the outgoing cost, this way if it is more than you expected, you have already planned for it and can accommodate for the extra expense.
With this list in hand, you will have a rough estimate of how much money you need each month, if things get tough and months are slow, rethink the list. What are the absolute essentials and what can you cope without?
2. Cover bad months with the good months
Unfortunately, working on a commission-based salary means that you can’t guarantee you are going to be one hundred per cent secure every month with your finances. The fact is that some months will be lucrative and others won’t, and so when you have a particularly good month placing candidates, don’t just go and blow the extra money on luxuries you might not need. It is always advisable to save any money you have made as extra on top of your average earnings.
These savings will soon build up and act as a much-needed safety net when it comes to those months where things are a struggle.
3. Be strict and save
It’s so much easier said than done, but saving can be the one crucial thing you do that could make the difference between you losing control of your finances and staying on top of them. Be hard on yourself, if you’re just beginning a commission-based role, keep the worst scenario in mind – don’t ignore the potential of being left short, because it might be more likely than you think.
If you are just starting on a new payment structure, begin saving early on and only spending money on absolute essentials. If you can live with no luxuries for your first or second month, you can quickly get to a point where you could continue comfortably for a month without having a pay cheque.
4. Ask for help
If it does get to the point where you are caught under the weight of bills and outgoings, then speak to someone for advice and support – friends, family, expert professionals or even another colleague at work. The chances are that in a commission-based role, you will be working in an office full of other people in a similar position. They may have the perfect solution from previous experience of their own. It’s always better to confront money issues head on – the longer you leave them the worse than situation can become, especially if you are borrowing money on credit to cover monthly bills. Planning ahead and not burying your head in the sand when issues arise should keep you on the right track.
About the author: David Rankin is the director of insolvency at Creditfix.