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5 Budgeting Ideas for Real Estate Agents

posted Jan 19, 2014, 1:30 PM by Steve Penner   [ updated Jan 19, 2014, 7:19 PM ]
Many agents find making a budget difficult.  There is no monthly paycheck or steady income flow. Expenses can pile up, especially for new agents, and those slower months can cause many to avoid wanting to work on their finances.  After all agents want to sell houses and are by nature social creatures and not liking the boredom of number crunching.  

The good news is that with a little strategy and the right software tool, you “can” make a budget and January is an excellent time to do it.  Done with the proper mind set, budgeting will empower you make better decisions and understand those flows of money through your accounts for the year ahead.

Here are a  5 helpful budgeting tips for Real Estate Agents.

1. Measure Your Marketing Money

Where does your business come from? Agents have many ways to market themselves, some are free, some are expensive.  But expensive is a relative term.  For example, if you spent $300.00 on marketing that yields you a $2,500 commission that is cheap advertising.  However, if a different marketing effort costs you $400.00 but yields 2 sales for $5,000 commission that is money better spent.  Like any business you must measure all your marketing efforts and budget for those that work best for you. 
  
2. Put Money Aside in the Good Months

When those good months happen, it is easy too get a little excited and spend more than you should. Rather,  be sure to put some money aside for a rainy day.  For the 6 or 9 months of the year when commissions are strongest, budget in an amount for savings to build up that rainy day or emergency fund.   As you build your business you will also want to budget your retirement fund. 

3. Stay Within Your Limits

It is often tempting to “impress” people with the expensive clothing, accessories, and cars.  Unless you are selling multi-million dollar homes, focus on looking professional but you do not have to be flashy.  Work on providing good service and being professional without breaking the bank.
   
4. Save Where You Can

Review your cell phone plan.  Look at your insurance coverage, how much interest you pay on lines of credit and any area where you can trim your expenses.  When creating your budget look at all the numbers and make adjustments.  Look for discounts and save where you can.  This is the time of year to look ahead and make those changes that will save you money.

5. Use "Free" Budgeting Software

Using budgeting software or a spreadsheet gives you a reference document with the ability to change the numbers and immediately see the impact to your net income.  It clearly shows that everything is accounted for and is a document you can refer back to throughout the year.  Moneyledgers offers a “free “ very easy to use budgeting program for real estate agents.  Feel free to watch the short instructional video and download it for free from this webpage

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