Budgeting For Network Marketers

rodney bukuya

A life at the beach is just a decision away.

Once you get past most network marketers dream talk of massive homes, fantasy cars and house maids, I’ve found that the reason most people are building their businesses is to achieve quality of life.

Quality of life is different for everybody but for many that I advised in my time as a financial planner, the key points that most were chasing were;

  • freedom from debt;
  • freedom from time constraints;
  • freedom to enjoy pleasurable pursuits;
  • freedom to explore the world;
  • freedom to spend time with cherished individuals, and;
  • freedom to spend money on things that bring joy and beauty into one’s life.

So, now that you’ve chosen network marketing as the vehicle to help you achieve these freedoms, how can we find money to invest in building our business when there are so many hands already grabbing for our hard earned cash before it even lands in your bank account.

Firstly, if you’ve been in your business for more than two days, you’ve probably worked out that you’ll need to be investing in your business and your own personal development.

Hopefully, you’ll have also realised that network marketing, as Eric Worre warns, is an actual business and not,a lottery ticket and as such it could be some time before you’re making positive cash flow or profit.

In that regard then, Network Marketers need two budgets, one for Pre-Profit  and another one for when the cash starts rolling in and we start living the lifestyle we’ve always dreamed of. I’ll call that MLM Cash

I believe that budgeting is just as important when we’re successful in Network Marketing as before we achieve that success. Afterall, you don’t want to become one of those people that has to sell their successful MLM business just because you never learned how to control your spending and now have crippling debts.

High cash flow does not always mean High Net Wealth.

To quote Eric Worre again, Network Marketing isn’t perfect, it’s just better.

So, let’s look at our two budgets.


This is the simplest of the budgets because it’s working around the money you already earn and uses a generally accepted principle of wealth creation.

  1. 90% Current Living Expenses
  2. 10% Business Investment

That 10% includes all your current household income to be invested in your business. Investment includes, seminars, business building tools such as audios, webinars, books, more books 🙂 transport and accomodation costs of seminars.

Investment doesn’t include your product purchases, unless those purchases are being used to promote you and your business. Otherwise, products should be purchased from your expenses budget.

No business can survive without the fuel it needs to grow. And the fuel that Network Marketing businesses need is for their distributors to invest in themselves. Consider this, your apprenticeship.

MLM Cash

How then do you allocate your income from your new business, once it starts coming in, so that you don’t just waste it like last years tax refund? Firstly, you need to open another bank account and put a proportion of your new income away for tax. Don’t get caught out at the end of the financial year having to look for money, just because you spent the tax mans share.

After you’ve met your tax requirements, this is how I recommend you allocate your new income whether you’re earning $100/month or $20,000 per month or more;

  1. 30% Living;
  2. 30% Debt Reduction / Investment;
  3. 30% Life Experiences, and;
  4. 10% Changing The World.

1.  Living. You started a new business to improve your life, so I believe you should take some of the profits from that business to increase your lifestyle. If you eat all your meals at home, why not take your family to dinner occasionally. If your wardrobe is in desperate need of an upgrade, take a shopping trip. Or even better, will this extra money help you afford a cleaner once a week, so mum can have some time with the family she loves instead of becoming it’s most important employee.

2. Debt Reduction/Investment. If you’re one of the few people that don’t have any debt then, you can jump straight into investment, either traditional investment such as shares or property, or even smarter, you can find ways to invest in the further growth of your business.

When you’re investing in your business, the same rules apply as though you weren’t making any money yet. Invest in your people and the money will come.

If you’re like most people though, you will still have some debt and to be truly free, you need to have freedom from the clutches of your lenders. to do this, I recommend that half of this portion of your money be directed to making extra repayments on your loans until they’re all completely extinguished,

with the other half of this portion, you too, will invest in your business. If you can’t find a way to invest in your own growth or your teams, consult your upline, they’ll have a solution for you.

3. Life Experiences. This is where the rubber meets the road on the journey to the quality of life you joined your business to create. The life experiences you can engage in, will obviously depend on the monthly income, you’re currently generating from your business.

If your new business income is $100/month, your experience may be limited to a movie night with your spouse. If it’s $10,000/month, you might hire your dream car for a day or take your family to another city for a weekend away and a night time helicopter tour.

When your business is really pumping, you might spend the entire Christmas holidays in another part of the world, in your absolute favourite resort.

4. Changing The World. Some people refer to this part as tithing, some people refer to it as charitable giving. For me, I like to call it changing the world, because we all have a cause that we really want to contribute to.

Something that we think is not quite right with the world and that we believe should be changed. We’re becoming financially successful in our businesses and it’s only right in my opinion that we then seek to help those that we share the earth with, whether it be the planet itself, or the creatures that walk it, including the lives of other humans.

Some people, prefer to give to established charities, while others like to help in a more direct way. Some people even like to make political donations, in order that they may have direct influence with key decision makers.

Whatever your bent, allocating a set percentage of your income to that cause will help you contribute in a meaningful way. My friends know that I, for example, like to help in the practical management of depression through my group Black Dog Boxing.

I hope this has been helpful to all my friends in this great industry of ours. Please share your thoughts in the comments section.

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