Straight Commission and budgeting/saving??

[Stayseeliz]

Dh works on straight commission and I'm wondering about how to handle a few budgeting/savings issues. He works for a good company but his income can be sporadic. It's rare that we get a week with NO paycheck but they can be quite small sometimes (as in not enough to cover that weeks bills). We have what we need for the month figured out and we pay ahead if we get bigger checks. We are also paying down debt per Dave Ramsey. But I was wondering about savings. Since DH is on straight commission and we can have slumps where business is slow and we don't get paid much. We were thinking we should have our $1000 emergency fund and then one month's pay in another account that we don't use unless we get really tight and we'd pay it back right away. Is that a good plan?

I was also thinking about groceries. I coupon and shop sales so sometimes I spend $150 one week, $75 the next and nothing the next week. I was thinking about "paying myself" into a separate account a certain amount each week then using that account only for groceries. Would that make things too complicated? I like having extra money set aside for sales, etc and if things get REALLY tight I want to feel like I can buy groceries. Not sure if that makes sense or not. Thanks for any input!

[BetsyS]

We're not in the same position (50% salary/50% commission), but I'll share what works for us.

We get 3 paychecks a month. Two are salary, and one is commission. The salary checks are not enough to cover our expenses, so we need that commission. (This in itself was difficult for my dh to accept; his dad got commissions growing up, but they were always for extras/toys. It was a hard thing to accept for dh)

I have a list of our expenses for the month. I prioritize them. They are listed from top to bottom: food, gas for our car (cause dh has to get to work), mortgage, utilities, car insurance, debts (we have student loans and a small medical debt), all the way down to blow money, eating out, and gifts. About mid-way down, I have a category called "savings for low months". It's just under debts, before any discretionary moneys. The amount I put in varies, but I try to keep an entire paycheck in the "SFLM" envelope. And, also important for us, cause we have older cars, just under the savings, I have a "car" category that covers repairs, maintence, etc.

I have an amount that would fund every envelope fully (for us, that means, we both get a little blow money, dh gets a haircut that month at the barber, we have $10 set aside for gifts, and we eat out twice). I also have a minimum. For us, that's every envelope funded through the debts.

When we get the check, I just go down the list and fund envelopes as far as I can. If I don't have enough money before I get to our minimum (which is all debts), I pull from the "savings for low months" envelope. If I can fund our minimum, then I don't pull from that envelope. Even if we do without any and all extras that month.

In a month that commission is low, and we don't fund any extras, I have to be creative. Sometimes, if we need a birthday gift, say, I'll make it myself (I have lots of crafty supplies, and my mom does, too, so I can swipe from hers), or I'll take it out of grocery budget $$, or I'll sell something on craigslist. In an ideal world, I'll have some money leftover in that envelope from the previous month. But, we know the world isn't ideal.

If we eat out that month, same deal. Creative about the funds. From the grocery budget or a mystery shop or a gift card or garage sale money or whatever.

This has worked really well for us in the last year. I hope it helps!

edited to add: Because we get salary biweekly, it allows me to have two "extra" checks a year. I budget based on two salary checks a month, but 2 months a year, we get 3 checks. Those "extra" checks are for vacation (these days, mostly camping + something needed for the house) and Christmas. This allows me to not have to save for these two things throughout the year. This really, really helps.