Many salespeople think they can’t make a living from a commission-only income, and as a preneed or final expense insurance agent, you might feel the same way. However, living on commissions only is actually a lot easier than you might think. With the right strategy, you can actually not only get by on a commission-only income but thrive on it.
Finding the Balance
Since the commission you bring in is based on how many sales you make each month, the higher your sales, the more money you will earn. It can be difficult to predict with accuracy how many sales you will make each month. It is likely that some months you will have higher sales, and some months you will not have as many. Therefore, the most important thing you can do to help yourself thrive on a commission-only income is to set money aside during those months when you have greater income. The extra money you set aside, ideally in a savings account, can help cover your expenses during a month in which you do not bring in as much income.
While you may not always be able to control your income, you can have a lot more control over your expenses. Knowing what your expenses are by making a budget and sticking to it can be a good idea. You should aim to keep your expenses as low as possible. Guidelines suggest that you spend no more than 30 percent of your income on rent or a mortgage. Cutting back on unnecessary expenses such as frequent dining out and the top-level cable package can also help. You’ll also want to keep in mind that emergency expenses such as car repairs can come up, but if you have a savings account from the good months, covering them won’t be so challenging.
Think of living on a commission-only income as containing three different levels. At level one, you are paying all your bills, and you have money left over to save and invest. At level two, you are paying only a minimum amount on your bills, and you may have to access your savings. At level three, you are barely surviving. Your goal should be to always stay at level one and to never hit level three.
The key to making a commission-only income work is to not get discouraged during the difficult months. If you feel you aren’t closing enough sales, there are always ways to work on improving your sales skills, and there are always ways to get new leads with our lead generation programs. Stay confident and believe that you can make this work.
Advantages of Commission-Based Income
Don’t forget the biggest advantage of living on a commission-based income – the sky is the limit! Unlike a traditional salary, there is no limit to how much money you can bring in. When you work for Security National Life, you also benefit from our daily payment program, the support we give you to help you succeed, and the chances we provide to earn additional income through sales incentives, contests and bonuses throughout the year.
While you might feel uncertain about your ability to live on a commission-only income, confidence and following the tips mentioned above can go a long way in helping you make the most of your earnings potential as an insurance agent.