Being successful as a real estate agent requires you to be a self-starter, adept at dealing with people, and hard working. Because agents are paid by commission checks, rather than with a regular salary, you'll also need to have some skill when it comes to managing your money. Depending on how busy you are, you may occasionally receive a check and then not get another for several weeks or perhaps even a couple months.
Fortunately, large commission checks can sustain you for the periods in which deals aren't being completed, but you need to effectively manage these earnings so that you don't leave yourself short. Here are some tips to follow.
Save Some Right Away
The adage of paying yourself first is true when it comes to managing your real estate commission checks. When you receive a check, it's a smart idea to put some of it directly into a savings account that you don't plan to touch. If you ever hit a prolonged dry spell, this saved money can come in handy to sustain you. If you don't need it in the short term, though, you'll be contributing to a tidy retirement fund in a business that doesn't conventionally offer company pensions. The percentage that you choose to save can differ according to several factors, so you'll need to find what works for you.
Reinvest in Your Business
Local real estate agents often work for themselves, which means that they're responsible for the costs of running their business. After you've set some of your commission check aside in a savings account, assess how you might be able to invest some of your earnings back into your business. There are numerous ways to consider doing so. For example, you might want better business cards printed, a new tablet, some upgraded clothing, or even a new car. These investments can all help you to build a stronger, more professional-looking business.
Cover Future Bills
You should know to pay your immediate bills whenever you receive a commission check, but it's a good idea to also evaluate what bills will come due in the future. You won't always know when your next commission check will land on your desk, so thinking about future expenses will prevent financial stress. For example, if you know that the property tax bill for your home is due in three months, don't ignore it and hope that you'll get another few checks before then. If you're able to do so now, paying the bill will clear it from your expense list.