A lot of financial advice is geared towards people who make a salary.
But what if you make tips?
What if you are a server, a bartender, a hairstylist, anyone who relies on tips for a living?
What do you need to know to manage your money?
And how does that also apply to freelancers, side hustlers?
Where is the overlap?
That's what we're going to talk about today.
You can afford anything but not everything.
Every choice that you make is a trade-off, again, something else, and that doesn't just apply to your money.
That applies to any limited resource you need to manage, your time, your energy, your focus.
So, what matters most?
And how do you protect that and grow it?
That's what this podcast is all about.
My name is Paula Pant.
I am the host of the Afford Anything podcast.
And today, we're talking to Barbara Sloane.
She is the author of TIPT, a guide to personal finance for people who are service industry professionals,
ushers, valets, barbacks, strippers, Uber drivers, nail salon workers, anyone who makes money from getting tipped.
Barbara herself was a service industry professional for many years.
And saw firsthand that most mainstream financial advice is not geared to this crowd.
So, if you or someone you know relies on tips for part of your living, you're going to love this episode.
Here she is, Barbara Sloane.
Hi, Barbara.
Hi, Paula.
Thank you for being here.
I'm so excited.
Barbara, you wrote a book about TIPT workers, people who primarily earn their money through tips.
What are some examples of TIPT workers and why are finances different for them?
There's four main categories of industry that I like to talk about when I talk about TIPT workers.
I like to talk about hospitality and restaurant workers.
So, that looks like servers, bartenders, strippers. I like to talk about beauty and body services.
So, that is hairstylist, massage therapist, sex workers.
I like to talk about transportation and delivery services.
So, that is movers, taxi drivers, your food delivery servers.
And then I like to talk about hotels, your room service, your tour guides, your bellhops.
Those are the primary roles for people who were in the TIPT sector.
Thank you for enumerating that.
The reason that I ask that question is because I think a lot of people don't necessarily think about some of those sectors.
We forget sometimes about valets or bellhops or taxi cab drivers in the conversation around TIPT workers.
Totally. And I think it's normal and people need to give themselves a little bit of grace in that way.
In the personal finance space, when we're talking to people, we talk about emergency funds and we're like, start with three months.
Luxury services are becoming more available to people.
And so people are utilizing those luxury services more and more.
So, you may not understand all of the rules around TIPT being right away.
Start with getting it right with restaurant workers and beauty and body services and expand your knowledge.
You have to be an educated consumer in every industry and this is no different.
So, give yourself some grace if you're just learning that some of these positions are TIPT positions and that it requires a little nuance.
What are some of the financial challenges for the people who are listening right now who primarily earn their money from TIPT?
What are some of the biggest financial challenges that they face that salaried workers don't face?
People who work on TIPT, a lot of times do not have access to healthcare.
Through their employer, they don't have access to retirement accounts. They don't have access to paid time off.
They are often paid at least a portion in cash.
So, they're dealing with a fluctuating income. It's harder to budget. It's harder to manage your money.
It's harder to put things in place like automation when you're dealing with cash and fluctuating incomes.
So, a lack of benefits and income volatility.
Yeah, you said it beautifully.
Both of those challenges also apply to anyone who is self-employed, anyone who has a side hustle who's starting their own business, freelancers, consultants, contractors, independent contractors.
So, both lack of benefits and income volatility apply to anyone engaged in any type of entrepreneurial activity.
But there are also special challenges that many people in TIPT industries face.
Yeah, I often tell people who work in the TIPT industry that they have to be as good as people who own their own business in managing their money.
The same skill sets of estimating your income, of estimating your expenses, of building in buffers.
Those are things that every business deals with.
No business is able to have consistent income and consistent expenses. And yet, most businesses still put together a budget.
They still execute a plan around their income and their spending.
And so, when I get people who come to me, servers, bartenders, strippers, and they're like, how do I manage my money?
I empathize and I say, it's going to be harder for you, but it's even more important for you.
So, think like an entrepreneur?
You are an entrepreneur. You are having to do the sales for your business.
You are having to manage the beginning, middle, and end of a transaction.
You are having to problem solve. You are having to deal with time management.
I run a very successful multi-million dollar business here in New York City.
And everything I learned about running a successful business, I learned working in the service industry.
Tell me about that. Let's talk about your story because you've had some interesting beginnings.
Yeah, so I think that there are those moments in your life that you look back on and you're like, these were punctuation moments.
I would say the first punctuation moment for me was at the age of 12. My mom left our home.
I was the person who was responsible for managing the household. I was managing her checkbook.
My dad was my primary parent at that point and was working nights. I was left alone.
I was working a paper route to try to help bring in money. I had a few blocks and I remember around the holidays getting dollar bills and five dollar bills as tips.
And it just made all the difference in my family's finances.
There were substance use issues in my house growing up. And when I turned 15, I came out as gay.
And I also ended up becoming homeless at this point. I worked a bunch of jobs. Hard work was modeled for me growing up.
So I was very lucky that that was modeled for me. But one of the jobs that I worked when I was in high school was working at an A&W.
And I don't know if your listeners know what that is, but it's a car hop style restaurant where you serve root beer and hot dogs.
That was my intro into the service industry. I worked a bunch of jobs in high school, including some dancing.
And at the age of 19, my dad passed away. It was a really hard time in my life.
And how I result that grief was through purchasing the house that I grew up in, 100% financed, and then maxing out 10 credit cards to try to renovate the house myself.
Wow. And what you realize when you lose a parent at a young age is just that life is precious.
And so after a year of taking all of this on, putting myself in a terrible financial position and feeling like adulthood was just way more than I could handle, I left and moved to California and started waiting tables because I needed something that felt easy.
I needed something that felt more joyful where I was connecting with people, and I was getting to just enjoy myself a little bit more after such a serious few years.
I fell in love with the service industry because of the camaraderie of my coworkers, because we went out for drinks afterwards, because the people in those industries understood what it was like to have a challenging life.
And I felt like I belonged.
Wow.
Thank you for sharing that. If you don't mind me asking, can you tell us about when you became homeless when you were 15? How did it happen? And what did you do? Where did you sleep? What's the day to day of that?
When most people think of someone becoming homeless, they think of them not having friends or family, not having any money and just you go from this life to all of a sudden you're sleeping in the box on the streets and that's just not what it looks like.
When I came out, my family, and I were having really tough conversations about that. And when my home became an unsafe place for me to live, I didn't feel as though I could call on my family members at that time.
It just was not an option at the time for me to call on family to live with. And so it looked at first, like me staying in my car. It looked at first, like me staying with friends.
I tried to move in with a girlfriend who I was dating at the time, but her mom was a social worker and said that because of her work, she couldn't have me staying there knowing that I wasn't living at home.
I was working at that A&W and I remember bringing all of my stuff and making a bed roll on top of the walk in cooler with the full intention of moving into where the A&W that I was working at and sleeping there without anyone realizing.
One of the cashiers who was an older woman at the time to pity on me and she was like, you can crash on my couch for a couple nights and that's really what it looked like.
It looked like clawing together places to stay, getting your head slightly above water feeling like you had a place to stay and then that kind of being pulled away from you.
And it was a lot of instability. And so for me, it didn't look like sleeping on the streets. It just looked like I never knew where I was going to sleep.
At the same time, I was kicked out of my high school because you needed an address in order to attend school.
So while I was still trying to find housing, I was also trying to find a school that would let me go there without an address in order to get my high school diploma.
How did your school find out that you didn't have an address?
It's a good question. I'm not sure. Someone might have reported that.
I just remember getting called down to the vice principal's office and her saying, we're aware that you're not living at your home anymore. And I was like, yeah.
And I think she gave me the option of going to social services. And I was like, I'm not doing that. And then she was like, well, then we technically can't have you here in the school without an address.
And so that's when I went and started applying at alternative schools. And I did find an alternative school. And that was how I was able to graduate from high school was through one of those schools, which it's an amazing program that those exist.
Did you reconcile with your father?
Yeah. You know, the thing that is interesting about my dad is that even when he was struggling with his own substance use and he had a tough life is that I always had massive amount of respect for him. He was always a hard worker. He just struggled.
Wow. Thank you for sharing that.
Tell me about the decision to buy the house that you grew up in.
Was that something you'd been thinking about for a while? Was it sudden?
How did that come about?
When my dad passed away and we were trying to make arrangements, it was expensive as anyone who has lost somebody knows you go to the funeral home and you're like, wow, this costs that.
Realizing that we wouldn't have the financial means to get him a plot and a tombstone.
I felt I had robbed him of a legitimate death and I really struggled with that. And I remember just out of sadness driving past the house that I grew up in, which was sold against my wishes after he had passed.
And I sat in front of the house and I remember grabbing a notebook out of the back of my car and writing a letter to the owner and saying, this was the house I grew up in and it was sold against my wishes.
If you ever decide to sell, please reach out to me.
I got an email from them a week later.
They were open. I mean, I ended up purchasing the house for twice the price that it was sold for.
I had no financial literacy at this point and the fact that I was able to finance that at 100% just tells you how the system was in 2003.
So I dug myself a whole financially in that decision, but it was in my head at 19, a way to honor my dad and the way that I hadn't been able to.
Where was this? What city, what state?
This is in Michigan, just outside of Detroit.
Do you still have the house?
No, I sold it in 2005. I would say that I was able to work through my grief in owning the house and in working some projects on the house and it served its purpose.
You know, I felt like I was able to kind of reconnect with my dad and I was able to do what I needed to do.
And then in 2005, I sold it and I moved across the country because I needed something different.
I needed to be someone in their early 20s.
I needed to not have a house that was falling apart around me and massive debt and a life that really wasn't one that I designed for myself.
What was the first job you got when you moved to the West Coast?
I started on Craigslist answering ads for cater-watering gigs, so working events, working in people's homes for holidays, backyard birthday parties, things like that.
It was very flexible schedule. It was easy cash. It was fun.
I usually got to go to the beach in the morning and then do a gig in the afternoon.
I was living in a studio apartment with three other girls.
This was before I knew what house hacking was, but it afforded me the ability to live in a really high cost of living city and to go to the beach almost every day and to kind of hit reset on what I wanted out of life.
What city was this? This was Los Angeles.
Did you know any of the people you were living with or was this all Craigslist?
No, I knew one of the girls when I moved out there, but the two I had met on the way out there.
And it was tight quarters. It was a tiny studio.
But how do you meet people on the way out there?
The girl who I was moving with, she knew the other two girls. So we drove out there with all of our stuff and I got to know them on the way out across country.
Got it. Got it.
And that was what began for you a series of jobs in the service industry.
Yeah, I remember taking a weekend trip to Las Vegas. It was the first time I'd ever been to Las Vegas and I was like, oh, I could work here too.
And this ended up being the reason that I left Los Angeles and moving to Las Vegas, which is a move I ended up doing twice.
And moving to Vegas was another eye opening moment into the service industry where I was like, oh, I can become a mermaid.
I can become a sideshow showgirl. I can become a player bartender.
There's so many other jobs in the service industry and they're very exciting and fun.
And so Vegas was another experience.
And as I was going along my path of all of these different jobs in the service industry, I didn't have a traditional job to compare them to.
So I didn't realize that I was missing out on health insurance.
I went over 10 years without having health insurance, which is terrifying.
I'm lucky that nothing happened to me during that time. I went over 10 years without dental insurance, without a dental cleaning, a dental checkup.
It's terrifying to think about that.
I didn't realize that you had to save for retirement. I didn't know that was a thing.
I was a good and disciplined saver over those years, but I always saved up for a move.
I always saved up for a vacation. I didn't realize that I needed to be sending money towards an emergency fund or towards a retirement.
I had no idea that the umbrella of personal finance even existed.
And it wasn't until 2013 when I moved to New York City with my wife.
I got two jobs. I got one job working at Coyote Ugly, which is a bar where you sing and dance on the bar, you hit your patrons, you have girls take their bras off.
It's a very good time. And then I was also working at a unregulated market on Wall Street, which was part trading floor and part independent sales organization that specialized in selling usurious loan products.
This was a huge education for me, not only on financial services, but on the markets.
And after a few months, I was like, oh my gosh, I got to get out of financial services. This is super toxic. I need to go back to bars and construction, which is so much safer.
And so I ended up applying for a job at a construction company.
And it's actually the company that I now own. I was employee number three.
And I remember what I was tasked with when I first started was to set up, they were growing. They wanted their employees to be able to grow. So I was tasked with setting up an HR department.
I had no idea what HR was. So I had to do research on, you know, what health insurance was, how to explain health insurance to people who were working in construction who had never had health insurance before.
And I had to do research on what is a paid time off policy. How do you administer that? How do you set up a 401k? How do all of these benefits help and serve the life of the employee?
What are the tools that HR has, like automation? It was through this. And then also on the other side, we were working for these really high network clients.
And we were discussing their budgets, their million dollar budgets, and kind of getting to see the behavior behind that and the trade offs that they were making.
And I was like, oh, it is these financial mindset and behaviors coupled with these benefits and systems that help people build wealth. And it was an aha moment where I was like, this is the reason that people in the tipped industry are left behind.
It was in this role that I learned that the two number one ways that Americans build wealth is through their 401k and through their primary residence, two things that people in the industry typically don't have access to.
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Let's go into what are some ways that people in the service industry, as well as people who are self-employed, people who do not have access to employer-sponsored benefits, and who often have a harder time taking out a mortgage because if you've been self-employed for fewer than two years, that's very difficult to purchase a home.
What are some of the tips you have for those who are tipped?
Yeah. In the tipped industry, typically there's two ways that that employment is structured.
The first is through a W2. Now, the tipped industry has a federal subminimum wage of $2.13.
So when you hear W2, you think, oh, they're part of minimum wage, but that's not the case.
But if you are part of a W2, then you have access to an individual retirement account.
If you are claiming earned income, then you have the ability to invest into an IRA.
You don't need it to be attached to your employer. You can take out an IRA in your own name, which most people in the service industry don't realize.
If you are a gig worker consultant or you're working in the service industry for an employer who doesn't have you on the books, maybe you're paid under the table, maybe you're considered a consultant and you're getting a 1099, then if you get that 1099, what you are is you are your employer.
So you have access to things like a step IRA.
Mm-hmm.
When either of those buckets are filled up, the IRA or the step IRA, you then also have access to a brokerage account.
Most people don't think of a brokerage account as a retirement account because it doesn't have tax benefits to it.
But when you don't have access to things like a 401k or 403b or 457, then a brokerage account is a perfectly perfect account for your retirement funds.
Mm-hmm.
You can still achieve the same goals as somebody who has access to pre-tax buckets.
I think for a lot of people listening, they're probably thinking, it's great that these various accounts are available to me, but how do I actually set aside money to put into these accounts given the volatility of my income?
Yeah, budgeting is very hard for people who work on a fluctuating income.
The first thing I always tell friends, coaching clients, start with tracking your income.
Just like with a business, there are trends.
You may not be able to see them now, but once you start tracking your income, you will see trends.
Maybe you're in an industry that has some seasonality to it.
I know when I dance, summers were slow, sporting event nights were slow.
When I bartended or had access to a patio, summers were busy.
I made more.
So when you start to track your income, you see the trends and patterns, and then you can put systems in place, like, oh, I'm not going to do that.
They're not going to do that.
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I think there's that much money or more.
Yeah, definitely.
I think a lot of people in the industry often work backwards.
Work seven days a week until I make enough to cover my expenses for the month and then
I take the rest of the month off.
Or maybe I work all these heavy lifting shifts and then I can offload shifts what I need
to pay for my expenses this month.
People in the industry also get caught up in a debt cycle because they don't have a system
that works for them.
They'll put things on credit and try to hope that they can make up for it by working
extra shifts after the month has passed.
That's why I encourage people to put buffers in place and build up buffers into their
expense accounts before it happens.
For spicy entertainers, people who work in maybe in sex work or in strippers, I often
tell them to set up two accounts where I'll say, set up this account with one bank
and set up another account with another bank.
Your first account, you'll put all of your cash in that account.
Everything goes into this account and then you can pay yourself more fixed paychecks
if you will.
You can pay yourself from this account.
This is also important to hold because if one of your accounts gets shut down,
you have access to another one quickly where you can transfer all of your funds.
That piece of advice is useful for anybody who earns a fluctuating income,
have one account that is the recipient account of all income and then quote unquote
pay yourself a salary from it by transferring a fixed amount every month.
Yeah, I'm a big fan of using the envelope system but with lots of accounts instead.
I am someone also who thinks that budgeting is very important because it gives you a lot
of information but I also think that budgeting is hard.
You shouldn't have to budget for your entire life.
So I'm a big fan of zero based budgeting.
I know there's a few names for it but putting your goals for savings first and then
living off of everything else.
You can do that when you have multiple accounts and you're able to set up those
automations in your own way.
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The distinction between budgeting off of your income versus budgeting off of your expenses
is an interesting one because you're right in that nine to five years people with steady
paychecks often start with the statement this is how much I make that leads to the question
therefore how much can I spend.
Whereas people who make money in more entrepreneurial ways and I think one of the big takeaways
that I'm getting from this is that people in the service industry have to budget like
entrepreneurs.
And those who earn money entrepreneurially do the opposite.
We start with these are our expenses therefore how much do I have to earn.
Exactly.
Given those two frameworks can you talk more about zero based budgeting the notion of starting
with a different statement starting with the statement these are my savings goals therefore
how much do I need to earn and spend.
How does a person who's listening to this someone who is a cab driver or a server how
do you determine what reasonable savings goals are.
Yeah I know you hate rules of thumb and I know you all make fun of the etymology of
this word.
Exactly.
But for people who don't have previous financial knowledge previous financial literacy and
are also in an industry where the money management side of the equation is not talked about rules
of thumb are incredibly helpful.
Once you start with that tracking piece where you are getting idea of oh this is how much
I make and that's the first time you're realizing this is how much I make.
Then those rules of thumb of like oh I put 20% aside for future me 10% of it goes to
debt payoff 10% of it goes to retirement.
Those are helpful guide posts you live that and then you iterate maybe it doesn't work.
Maybe those percentages are too extreme for you.
Maybe you need to cut back but those rules of thumb help you with a starting point.
This is what I'll aim for and we will iterate as we go progress over perfection.
Where do most people get it wrong in your experience?
Tracking it's a habit.
It's a muscle that you have to build and I think people don't give themselves enough
grace for for messing up.
This is imperfect even companies have entire teams dedicated to accounting and financial
planning and analysis.
You are one person.
It's going to take a little bit.
It's going to take a few tries to figure out your system.
It's going to take a few tries of figuring out what is achievable for you.
What works?
Are you good at tracking these things?
Are you not good?
I know some people who when they budget it brings up other disordered behavior for them.
Just merely the fact of them counting things and counting their income and counting things
brings up other disorders in their lives and so they can't do that.
It's so individualized.
It's a learning process.
Just stay curious and keep trying until you find something that works for you.
Tell me more about how budgeting can be a trigger for other disordered behaviors.
I think for anyone who has experienced maybe an eating disorder or obsessive compulsive
disorder or intrusive thoughts, when you are constantly focused on your numbers, it can
put you into a scarcity mindset.
It can put you into feeling like you won't get enough, feeling like you're not good enough,
feeling like if you're not just constantly depriving yourself, you're not doing well.
I think it can show up for people in a lot of different ways.
I think when you are setting up a budget for the first time and some of that behavior has
shown up in your life, be mindful and stay aware of how you're feeling throughout the
process.
You can take breaks from it.
If it's not working for you, you can try different things.
The reason I love zero based budgeting is because you're just sending money to your savings
goals and then you're not tracking the rest of your expenses.
You're like, okay, this is my savings goal for my emergency fund.
This is my savings goal for my retirement fund.
I get to live off of the rest of what I make.
I don't need to overthink it.
I don't need to over optimize.
I can just live my life and know that I'm also taking care of future me.
I like that approach as well, the approach in which you are not excessively line itemizing
everything.
Yeah.
I mean, people in this industry, you are exhausted.
You have spent your entire shift interacting with the general public, entertaining, serving,
maybe making yourself small, maybe apologizing to a lot of people for things that weren't
going well for them.
You can come home and not have room for meticulously adding up all of your expenses.
For a lot of people, budgeting is feels overwhelming when you've already worked 40, 50 hours in
an industry that is not only physically demanding, but emotionally demanding, mentally demanding.
It can be a hard thing to approach initially.
I always encourage people to find other ways to scale back before they start with budgeting,
whether that is making sure you're writing down all of your orders so that you're not
using that mental energy when you don't have to.
Maybe it's having some suggestions or conversations that are a little more boilerplate that are
kind of your go to conversations or your go to suggestions so that you're kind of saving
some of that mental energy for yourself when you get home.
It's highly individualized depending on what your position and what your work looks like.
One of the other things that's concerning about tip work is that they have a higher rate of
alcohol and a higher rate of dependency on things like narcotics.
One of the things that people in the industry have a tendency to do is to numb out after
work and that can show up and have impacts on their finances like excessive spending,
spending in areas of going out more, outsourcing things like cleaning, outsourcing things like
cooking because the last thing a lot of people want to do after they've had a shift of serving
people is to come home and cook for themselves or make a drink for themselves.
So a lot of times a big chunk of industry people, a big chunk of their spending will be on those
luxury services.
So scaling that back is also part of the conversation when you're looking at budgeting.
That was one of the challenges.
When I was working with Lindsay, the protege that I was working with in the Netflix documentary
and get smart with money, she had the challenge in which she would be on her feet all day
as a server and a bartender.
And so when she came back home, the last thing she wanted to do was stand in the kitchen
and cook.
So she was ordering a lot of Uber Eats.
Yeah.
I mean, I think, especially in the personal finance space, we put a lot of morality on
things like, oh, ordering out is bad for your budget.
But for some people, it's a necessity for people with disabilities.
It's a necessity for people in the industry.
It's often a necessity.
I liken it to it's a cost of working in the industry.
So when people talk about, what do I pay to work?
If they're going down that Vicki Robin sort of analysis of like, what does it cost me
to actually work, those to me are things that you would put in the cost of working.
Not because it's going to change anything, just because it helps you develop an awareness
of like, this is a cost of being this industry, the cost of winding down, the cost of outsourcing
some things that I just do not have the bandwidth to do for myself, the hazards of the environment,
the chips maybe to your confidence.
Those are all costs of working in this industry that people need to be aware of.
There's also a lot of opportunities in this industry that are really great, you know,
that immediate access to cash, that flexibility, the autonomy, the mastery.
I remember talking to a college professor who was telling me that the happiest people
in the world were hairstylists.
And I remember asking him why and he said for the exact same reason, he was like, they
get to see the beginning and end of a creative process every day.
They get to build relationships with the people that they work beside and they also get to
meet new people every day.
They get to have this autonomy over their craft, they get to have a skill that they can take
anywhere in the world.
And so when people talk about lifestyle design or they talk about like, oh yes, you can always
increase your income, I like to remind them that you can build the life of your dreams
within this industry.
And if you put systems in place, you can still achieve financial freedom even if you're a
lower middle income earner.
And if you don't have these employer provided benefits, you can set a lot of them up for
yourself.
We will wrap it there, Barbara, is there anything that I haven't asked about that you
want to emphasize?
People can follow me.
I like to make memes.
I like to make financial literacy fun and approachable.
So please follow me on Instagram at tipfinance.
You can reach out to me for when I'm on coaching or if you want me to do a money talk at your
restaurant, your bar, your club, your transportation service.
I love to do industry talks and you can grab a copy of my book at Amazon.
It is a fantastic book.
I had the honor of writing the forward for your book.
Yes, your forward is so good.
I feel so honored that you took the time to read the book and to write the forward.
It meant so much to me.
I love it.
I'm honored that you asked.
Thank you, Barbara.
And we will link to your book and your Instagram in the show notes.
Thank you, Paula.
Thank you, Barbara.
What are three key takeaways?
Number one, anyone who is not a salaried worker is going to have to deal with a lack
of job-provided benefits such as health insurance and retirement planning as well as income
volatility.
And so whether you make money from tips or whether you're a freelancer or a consultant
or anyone who's self-employed, you face the same shared set of challenges, lack of benefits
in income volatility.
People who work on tips a lot of times, they do not have access to health care.
Through their employer, they don't have access to retirement accounts.
They don't have access to paid time off.
They are often paid at least a portion in cash.
So they're dealing with a fluctuating income.
It's harder to budget.
It's harder to manage your money.
It's harder to put things in place like automation when you're dealing with cash and fluctuating
income.
What that means is that you're going to have to be responsible for providing your own.
You're in charge of your own health insurance, your own dental care, your own time off, your
own retirement.
It ups the challenge, but that's why we're listening to personal finance podcasts, right?
That's why we're here because we rise to the challenge.
That's key takeaway number one.
All right, key takeaway number two.
If you want this type of a career, whether it's a career in the service industry or a
career being self-employed, you're going to have to learn how to budget on a fluctuating
income.
Budgeting is very hard for people who work on a fluctuating income.
The first thing I always tell friends, coaching clients, start with tracking your income.
Just like with a business, there are trends.
You may not be able to see them now, but once you start tracking your income, you will see
trends.
Maybe you're in an industry that has some seasonality to it.
I know when I dance, summers were slow, sporting event nights were slow.
When I bartended or had access to a patio, summers were busy.
I made more.
When you start to track your income, you see the trends and patterns.
Then you can put systems in place like, oh, January I make a lot more money.
In January, I can put aside, I can max out my IRA.
January and February, I can max out, or I can build and buffer these other areas of my
budget.
We're looking for trends in order to be able to find ways to put systems and automation
in place.
So it's a start with tracking your income.
As far as how to track income, what tools should you use?
Pick whatever works for you.
Barbara loves Excel, like a standard Excel spreadsheet or a Google sheet.
But you can do the note section in your phone.
You can do a pen and paper notebook.
You can use a tool like you need a budget.
Ultimately, the tool doesn't matter.
Like Josol Cihai has this great quote where he says, no one would ever look at the feeling
of the Sistine Chapel and ask Michelangelo, what paintbrush should you use?
You don't need the best paintbrush out there.
You don't need the best spreadsheet.
You don't need the best app.
You don't need the best tool.
You just need something that is good enough that it's not going to create friction.
So long as it is frictionless, that's all you need.
So that is the second key takeaway.
Finally, key takeaway number three.
There are a few different strategies that you can use in order to quote unquote stabilize
your income.
So when you have a fluctuating income, you can use a number of different strategies that
will help you budget based on your expenses.
Because budgeting based on expenses rather than based on income is a better fit for people
who don't know exactly what their income is going to be.
A lot of people in the industry often work backwards, work seven days a week until I
make enough to cover my expenses for the month and then I take the rest of the month
off.
Or maybe I work all these heavy lifting shifts and then I can offload shifts what I need
to pay for my expenses this month.
A lot of people in the industry also get caught up in a debt cycle because they don't have
a system that works for men and so they'll put things on credit and hope that they can
make up for it by working extra shifts after the month has passed.
That's why I encourage people to put buffers in place and build up buffers into their expense
accounts before it happens.
For spicy entertainers, people who work in maybe in sex work or in strippers, I often
tell them to set up two accounts where I'll say, set up this account with one bank and
set up another account with another bank.
Your first account, you'll put all of your cash in that account.
Everything goes into this account and then you can pay yourself more fixed paycheck,
if you will.
You can pay yourself from this account.
This is also important to people because if one of your accounts gets shut down, you
have access to another one quickly where you can transfer all of your funds.
So those are three key takeaways from this conversation with Barbara Sloane, the author
of Tipt.
By the way, is an absolutely fantastic book.
I had the honor of writing the forward for it in that I talked about number one, how important
this topic is because service industry professionals are so often overlooked by mainstream personal
finance media.
And on top of that, the opportunities, the skill sets, I mean, if you can budget and plan
and be financially healthy on a fluctuating income, when you have no benefits, if you
can have no employer provided retirement and yet have an awesome retirement fund, how
you've won the game, you don't need your hand held.
You've proven that when no one will provide resources for you, you have the gumption,
the resilience, the initiative to provide it for yourself.
How amazing is that?
And how much can a person with that type of skill set achieve?
And those skills can be learned.
They're not innate.
You don't bust out of the womb knowing how to set up a retirement account.
But if you have the drive and the passion and the optimism, which is essential, then
I believe you're unstoppable.
So I highly recommend if you or someone you know relies on tips for part of your income,
check out Barbara's book.
Thank you so much for tuning in.
This is the Afford Anything podcast.
My name is Paula Pant.
I'm thrilled that you're part of the community.
And if you want to talk about this episode with other like-minded people, go to affordanything.com
slash community.
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Affordanything.com slash community.
Thanks so much for tuning in.
Thanks for being part of this community.
My name is Paula Pant.
This is the Afford Anything podcast.
And I will catch you in the next episode.
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