Money Management: How to Spend Your Commission

The number one reason most recruiters are recruiters is financial reward.

Sure, there’s a warm fuzzy feeling to be had in placing a genuinely deserving person in the job of their dreams. But nothing beats the warm fuzzy feeling of looking at a swollen bank balance either.

Commission is king.

Or, if not commission, the financial freedom that comes with it.

Even in the more strategic world of internal recruitment, on-site with your client, you’d be lying if you told me financials didn’t play a part.

Everyone needs to make rent. And being a recruiter will mean you can swap rent with a mortgage. And then, hopefully a second mortgage.

In theory, the money in our industry should turn this possibility into a reality quite quickly.

Nothing apart from your own desire and capability’s stopping you from earning big money.

So you might well find a habit of frivolity creeping in to your lifestyle. Whether you’re young and don’t have much financial burden or just never needed to be frugal, the more money you have, the better lifestyle you become accustomed to.

So, whatever age you are, however long in the tooth, it pays to actually think about the money going into your bank.

You don’t think about money when you’ve got it. When you haven’t got it, it’s the only thing you can think about. Are you going to be earning this wage forever? Probably not.

Are you going to be earning it beyond this month? Hard to tell.

So here’s how you make sure a dip in earnings doesn’t bring the wolf to the door.

1. Create an emergency fund

This might seem like a negative start. But trust me, it’s worthwhile.

Having a pot of cash saved away for true emergencies is the strategy you wish you’d thought of when an emergency hits. How much you put in here will depend on how much you’re earning. But it’s probably wise to think about the consequences of not having an income and how long you could live for.

One month? Two? You’d obviously be able to strip things back.The gym membership might go. Nights out less frequent. Fine dining might not happen for a while. But if you don’t pay your mortgage, you’re going to be up at night worrying.

Try to save enough to live without any income for three months. That way, worst case scenario, you’re safe and have enough of a barrier to live on.


2. Have savings goals

Depending on what stage of life you’re at, you’ll have different goals for the next few years. Where the above pot shouldn’t be touched, this one’s a little different.

Maybe you’ve got a child on the way? Maybe you’re already a parent and school’s round the corner? Trying to buy your first house. Even just a nicer car.

The best blogs out there around money management all suggest you put 10% of your salary away each month. The thinking behind this is you can live on 90% of your salary without noticing the difference. Especially if you’re earning commission on top. If you’re doing particularly well at the moment you might increase this.

But if you get into the habit of saving every month, you’ll know it’s fine to dip into savings for urgent or desirable lifestyle choices. Because the money will be replenished as long as you’re earning.

3. Never buy a brand new car

As someone who’s very much into cars, I don’t mean never buy a nice car. That’s not something I could advise with integrity intact. Big ticket material purchases like cars, watches and expensive toys positively impact your self esteem.

There’s a rise in self-worth when you treat yourself to something. Especially if that’s something you’ve worked hard to attain.

But, there’s a difference between treating yourself and being short-sighted.

A new car’s a fantastic thing to own. But a brand new car will almost certainly drop in value the moment you drive it off the showroom. And it’ll drop in value by thousands. That money won’t go to anyone. Just into a hole. Now, there are ways around this.

You could by almost knew. Ex-demo. In most cars you buy new you can’t truly put your foot down until a few thousand miles are on the clock anyway.

So let someone else do that, and take advantage of their desire to relinquish the negative equity.

4. Invest

Investing money’s a risk. How much of a risk will depend on the specific investment. Then again, leaving your money in a hole in the ground’s a risk too. So, the best thing you can do is spread the risk across multiple portfolios.

Crypto-currency’s en vogue right now. But given the fluctuation in price, it’s probably not wise to invest a lot. In fact, as with any medium to high risk investment, only put in what you’re willing to lose. Because that’s very much a possibility.

Luckily, other investments worth thinking about are plentiful. Expensive watches normally hold value. Barring any heavy scratches doing press ups on the bar at the Christmas party. Bricks and mortar, while obviously towards the top end price, is always a good idea. Buy a house as soon as you can legitimately afford to. And specifically in high yield areas like major cities.

Making friends with a mortgage advisor will do you a lot of favours too.

ISA’s and the stock market are also fairly good bets. As with the above, making sure you’re familiar with the ins and outs before investing is the best strategy. Lest you go in above your head.

5. Look after your health

No amount of money you have in your bank is a substitute for good health. Whether you’ve got the benefit of the NHS or private medical insurance making sure you’re in good nick is a priceless activity.

There’s zero point in being the wealthiest person in the graveyard.

So if you’ve got good money coming in, make sure you’re looking after your most important assets. Your body and mind. You don’t have to have the best gym membership going. Exercise can be free. It costs nothing to run. And if you’re constantly taking time off through illness that’s going to diminish your ability to make money.

Beach Palm Tree

6. Don’t pay off your student loan

If you went to Uni, you start working with a lot of debt. If you’ve been to University in the last few years you’re probably staring down the barrel of thousands. But contrary to intuition it doesn’t actually pay to get rid of this debt quickly. The payments will come out of your paycheque as standard.

It’s estimated many students will never pay off their student loan. But the reason you shouldn’t be thinking about getting rid of this debt early is it will take precedent over more important saving and payment activities.

7. Educational courses

The thought of studying may strike fear into many. Spending the best part of your life in school has that effect. But extra accreditations are never a bad thing to have.

This might even be something your employer will help you out with. But as long as it doesn’t get in the way of your career, you’ll advance your understanding of a niche or add strings to your bow.

Research the right courses and set some money aside to make your future career more varied. You’ll thank yourself later down the line if you decide you want a career change.

8. Think about your pension

In an ideal world, you’ll have so much money by the time you retire, any formalised pension will be secondary. But, let’s say you don’t. You can’t predict the future. In the UK, it’s now mandatory for employers to offer contributed pensions.

Take the offer.

And match what your employer pays. This is another thing you don’t want to scrimp on. Yes, it might be nice to think about the instant reward items. But reaching prolonged financial stability is one of the best things you can do.

9. Go on holiday

Taking time out from work is an absolute necessity to your mental health.

It’s always tempting to look after work while you’re away. Especially when it’s worth a lot in commission. But being able to afford time off doing what you love is instant reward. There’s also a big argument for planning at least two in advance.

Not having something to look forward to will mean you get caught up in the rat race and get stressed easier. Always come back from holiday with a holiday already planned. That way the post-holiday blues won’t be quite as crippling.

If you work on all of these things you’ll be well set in recruitment. You’ll never feel like life throws too many negative surprises and will be prepared for the future. Whether you’re earning satisfactory money or are set to be top biller, again.