Life on Commission: Feast or Famine

My husband Matt, is gifted at so many things, but sales is not one of them (he will tell you that himself :)). When we first started dating he was working at a Christian telemarketing company in which his paycheck was based largely on commission. He had to sell a certain number of commercials in order to even receive a commission and in the five months that he worked there he hit that commission exactly –once. It was a very difficult five months, but he learned a lot during that time. One of those things being, that he will never work in commission based sales again.

However, although Matt struggled, there were people all around him making a fantastic income with their commissions (although not many, in this particular company). In all parts of the workforce, there are people thriving on commission, who are gifted at sales or whatever their commission is based on, and who love what they are doing. So what exactly does it mean to be paid on commission?

Being paid on commission, according to Webster’s means to be paid “a fee for services rendered based on a percentage of an amount received, collected, or agreed to be paid”. There are many people in all kinds of fields that work on a commission basis. Sometimes there is a base salary and then the majority of their income is based on commission. Commission based income includes fields such as real estate, insurance, telemarketing, farming, and many types of sales people such as car, clothing, jewelry etc. These are just a few examples, but commission based income is so prevalent today. It has wonderful benefits in that in many ways you directly control your financial income. The harder you work, and the more time you put in, the more money you can potentially make. However, it also has potential for extreme fluctuations in income. Many commission based jobs can be completely tied to the economy or the seasons. For example, some fields boom in the spring (like real estate), most flourish in times of economic prosperity, some are dependent on the weather, and some thrive only around Christmas. This can be extremely difficult to plan a budget around.

My husband’s father is a farmer, and growing up Matt experienced the extreme fluctuations in income that come with a commission based income. If the crop did well and thrived, they would have a good year, but if they did poorly, they would struggle financially for an entire year. Matt describes his financial life growing up as “feast or famine”. They would get paid for their crops once a year and had to live off that money for the entire year, plus buy their supplies for the next crop. (It was actually a bit more involved because they farmed on loans, but I am simplifying :)) So once a year they would have abundance and would go crazy buying all the things they wished they could buy the rest of the year, and then struggle the whole rest of the year.

This “feast or famine” mentality is so prevalent in commission based fields, but it truly does sabotage a budget and any sense of stability throughout the year. Furthermore, it really can contribute to a poverty mentality where you just waste your money when you have it because you are so excited to be free of the deprivation that you feel the rest of the time. Once again, a budget is a fantastic tool on commission based income. However, you first need to stabilize your income, and you are just going to have to come back tomorrow to find out how to do that… Sorry for the tease, but I promise to go into detail tomorrow in how to do just that. In the meantime, if you get paid today, happy payday. If you are rejoicing today that it is your last workday until the weekend, happy Friday. And if you are plowing in the field of commissions today, may you find favor and grace with whatever you set your hand to do and have a very happy day.