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managing your cash flow and income can be hard enough when you have a set salary let alone when you are commission based So today we're going to talk a little bit about how to handle commission based income and we're going to walk through it for somebody who's all commissioned and then somebody who's part salary part commission so we'll start with salary Commission because that one's a little bit easier so when trying to figure out how to manage your cash flow and how to save for all of your goals and plan for everything that you want to get done sometimes what you have to do is say hey my salary alone is not going to be able to cover everything I want or even need but best case scenario is you can use your salary to cover all of your needs this could be rent it could be your mortgage car payments you know groceries the things that you really need to cover and then what you need to do is you need to figure out well how do I then manage commission uh in a way to help me pay for everything else that I need to do and the way that I found to be the best and work for the most amount of people is try to make it feel like your commission is a salary so some people have months where they're going to make 10K in commission or 30k in commission other months where they might make zero and so what I like to have people do is set up what we call a pay account so this could be at a high yield savings account it could be another form of a checking account but what you do is you're going to put extra commission inside that account so let's say you know you're making three thousand dollars a month of your salary and your fixed expenses are 3 000 to make it simple so that basically washes out so in January you get ten thousand dollars of commission after taxes and you know you spend about five thousand dollars a month above your salary so what you're gonna do is you're gonna put five thousand of that into that high yield savings account or your pay account whatever you want to call it the other five thousand is going to go into your checking account for living so then next month when you make eight thousand dollars of commission and you know you need five of that you're gonna take five away and you're gonna move three to that pay account and build it so then in March when you get a thousand dollars and you say well shoot we're going to be four thousand dollars short what you then do is say okay well I'm gonna take four thousand dollars from that a commission account and I'm gonna move it over and then April's gonna come and maybe make three thousand and so now you're two thousand short okay great I'm gonna pull from that pay account again and then May comes along and you do eight thousand again well great now I'm gonna move three thousand back over to that pay account so basically what you end up doing is you don't just say hey I got a bunch of commission I'm going to throw it in my checking account I'm going to end up overspending but what you're going to do is you're going to create yourself a salary through these extra commissions that is what I found to be the best approach and this can also be applied to if you're 100 commission obviously the 100 commission's a little bit harder because you have no salary you can't necessarily say hey for sure my fixed expenses are going to be covered but the system is going to remain the same so let's say you spend five thousand dollars a month and in January you make ten thousand dollars of commission okay great I'm gonna put five thousand dollars in that checking account I'm gonna move five thousand dollars over that pay account and I'm gonna spend it so February comes along I only make two thousand oh great well I need to take three thousand from my pay account to help me cover my expenses Marge comes around I make six thousand okay I have a thousand extra I'm gonna move that pay account so I hope you're kind of understanding the framework of this of you when you have extra income above what you need you move it to your pay account when you don't make enough Commission to cover your wants and your needs for that month then you're going to move money from your pay account to your checking account the goal here is really to create a salary for every month to feel pretty similar so you're not like oh I have a lot of money and then I have no money and then I have a lot of money then I have no money that creates a lot of anxiety it also creates a lot of overspending in the months where you have extra commission so I hope you're able to go and give this one a try but I think it'll help make commission based income better for you and easier to plan for