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You Need to Have a Rainy SEASON Fund

Protection Planning Top Ten

We can’t control the weather. But what we can control is our preparation and response. Which is why I advise those with a variable income to have a rainy SEASON fund.

Don’t be caught off guard when December rolls around and brings a storm with it. Sadly, sales and revenues won’t always go UP. Prepare now for when the storm happens.

One of the most fundamental components of a solid financial plan is having an emergency fund. For those with a compensation structure that includes a variable component, having a rainy SEASON fun that you can fall back on is all the more vital in protecting your financial well-being.

Top Ten Ways Sales Professionals Can Take Their Finances to the Next Level

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Things beyond your control

I’m sure you are good at what you do. But sometimes circumstances outside of your control can impact the business of even the best sales professionals.

What if a corporate scandal happened and sales ground to a halt? What if an upstart competitor comes onto the scene and gobbles up all your market share? How about if there is shakeup in management or a merger, and suddenly your role is redundant?

The bigger picture

The economy is in the middle of the longest winning streak in history. That’s likely been great for your income. I can’t predict when that will end, but I CAN predict that it WILL end. At some point, the economy will slow down and slip into recession. Income for those in a sales role is typically impacted more than most when that happens.

Emergencies do happen

There is also the chance that an ACTUAL emergency happens. If something happens that impacts your ability to work, you want to have something to fall back on. In a previous blog, we discuss how to financially prepare for natural disasters. The better prepared you can be, the easier it is to recover.

How much should you set aside?

Most experts recommend setting aside enough money to cover 3 - 6 months of minimum living expenses. This would cover your mortgage, food, and anything else that you absolutely could not live without.

I advise having at least six months, and in most cases, I recommend having up to twelve months living expenses set aside for your contingency plan, in case sales slow and you need to tap into your reserves.

Where should you put the $$?

It needs to be somewhere safe and in an account you can access quickly. A high interest savings account or a money market fund are great options. I recommend staying away from bank certificates of deposit (CDs).

Even though a CD may offer a slightly higher interest rate, remember, this is to be used in case of an emergency. You usually don’t get six months' notice that an emergency is around the corner - and penalties from tapping out early on a CD will wipe out most or all of your accrued interest.

It has been said that a recession is simply “a yard sale for the wealthy.” In a recession, prices on quality investments from real estate to the stock market are always much lower and it is the savvy investors who swoop in and take advantange. But those investors have one thing in common: cash on hand. 

Every good sales professional knows the vital importance of timing in sales, but they should also consider its value in the management of their financial life. 

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