If you’re doing an office job and getting paid a solid amount at the end of the month then managing a budget is important but not necessary. This is because when you’re sure about a substantial income coming each month and it’s going to be the same for the next few months or years then there is no need to worry about the expenses because if you go short of money at some point, there is an assurance that you’ll be paid again in a few days of time.
On the other hand, if you are in the real estate business, the case is just almost the opposite. Real estate income is completely unpredictable and inconsistent. One month you can earn thousands of dollars through commission and the next month you might just sit free waiting for some client and projects but to no avail.
For this purpose, there are too many articles and blogs available online by some expert real estate agents who have suggested some reliable budgeting tips that prove to be helpful in balancing the budget without having to go into debt or suffer due to the shortage of money.
Why do realtors need to manage personal finances?
As mentioned above, the main cause of the debate about the need for the realtors to manage their personal finances more than any other business or job is the irregularity of the monthly income that they have to go suffer from. This is not actually any sort of suffering from their side if that irregular income is finely managed.
While some real estate agents manage to keep their finances and personal expenses balanced with the help of the reliable techniques, most of them fail to do it due to the lack of awareness and knowledge. This is the main reason for the realtors to look into the facts and figures and maintain a finance book in order to survive happily even when there is no business for months.
Here are some of the understandable reasons for the realtors to manage their personal expenses more than any other business person.
- The property selling market is never consistent, one moment the prices are reasonable for people to purchase them while the other one is a tough call for the buyers who think a lot before making any non-profitable decision.
- The commission paid to the realtors has been set by the business laws and regulations but not everybody follows it. So when a relator cracks a deal, it is not confirmed to receive the understood commission by the client.
- The real estate market faces some unobvious ups and downs on a regular basis. Because of this reason, most of the realtors get financially frustrated and stressed out for not managing to gain a regular income.
- Not every property sale or rent has to be a heavy amount for the realtor to receive a commission for. The amount can be as little to just survive a few days or too big to be enough for the whole year.
Tips for the realtors to manage their personal expenses
1. Strictly follow a personal budget:
Following a personal budget for the realtors works big time in their favor. This can be done by managing an excel sheet or some other budgeting tool in which you can list down your income with your necessary and unnecessary expenses.
After that, you can calculate how much money you will be left with after completing the essential expenses and if there is a room for the unnecessary ones, then definitely go for it too otherwise refrain from spending on it.
This is to make sure that you are totally aware of the total income that you own at the moment and how much you need to control the budget to balance it for the tough times.
2. Save a dependable amount for an emergency:
Saving for the emergency is something that everyone should make a priority regardless of their business field. However, the unpredictable commission-receiving experience of the realtors makes it necessary and mandatory for them to save for the emergency funds in the future.
Also, it’s very simple and easy to do it as well. Whenever a realtor receives a hefty amount for a commission by a client that is enough to survive for months or a whole year, then all you can do is take out a substantial amount from it and save it in the bank or your personal locker. This way, the emergency funding will be done rightly.
3. Keep saving after each income:
Whatever amount of the commission a realtor receives, saving a little amount after every income should be made a regular practice by them. This is to ensure that there is a little bit of the saved amount kept in case you fall short of money just before you’re about to get your next pay. You can do this by saving a mere amount of $20 or $50, according to the personal choices.
4. Don’t overspend:
Overspending in a business in which most of the time you’re unsure about your next income is like calling the misfortune to disturb your expenses and finances. Here is how you can stop doing it.
- Don’t buy expensive clothes to impress the client.
- Buy mobile network packages to ensure a less expenditure made on the calls and SMSs.
- Don’t invest in a car that is way too much than your budget.
- Don’t immediately buy the luxury items whenever you receive the commission.
- Don’t spend too much on the outside food and make the home-made food a preference.
5. Do not use a credit card in the tough times:
Credit cards are tricking. They trap you in the debt web from which it is too difficult to get out. If you’re running short of money, then do not depend on the credit card, instead, use your savings and spend sensibly to avoid the debt that you’ll have to pay in the near future.
Managing personal finances for a real estate agent might be tough but it can be done with experience and sufficient knowledge. Once you get the hold on the saving and spending habits, then the financial worries come to an end with everyone remaining happy and contented from whatever, less or more, they have.