How can you manage your expenses in order to thrive in a shifting market?
Expense management is all about protecting your margins. It’s not necessary to change your spending habits during a shift, because survival isn’t mandatory for all agents. Shifts hit everyone equally, though, and what happens first is the equalizer and occurs without choice. What happens next, however, is unequal and determined by choice. There is no expense that’s untouchable and no cut too small, so cut, cut, and cut some more.
You’re cutting costs to live another day, and there are two areas to focus on in regard to this. The first is variable expenses. These might include hidden fees, add ons, or other third-party lead generation platforms. Additionally, check for unchecked and ineffective expenditures that have little-to-no return.
After that, look at your fixed expenses. These can include car payments, phone bills, rent, monthly technology fees, and salaries. It’s best to think about how to convert these into variable expenses. If you can shift fixed costs into performance-based costs, do it now.
So, make your money smart again, because once the market shifts, it immediately becomes dumb. In other words, what once works no longer does. Warren Buffett once said that the first step toward financial recovery is to stop doing the wrong things. You don’t have to make your money back in the same way you lost it.
A smart dollar is one that’s invested and will generate multiple returns, so reduce your expenses, find your margins, figure out what works, and put your money behind that. Don’t try spending your way out of a shift. Open and close your books monthly—if not weekly—because the key to changing your budget is changing the way you think. Challenge everything, make nothing sacred, and become a budget bully. When you lead from a position of profit, your world is full of possibilities.
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If you have any other questions, feel free to reach out to us as well. We’d love to help you.