“Life is 10% what happens to you and 90% how you react to it” – Charles R. Swindoll
Budgeting with a Tip Based Job
For those of you working a job where you rely on tips, you know how unpredictable your monthly income can be. Throughout college I worked part time as a server, and some weeks, making ends meet got a bit tricky. To make matters worse, leaving work with cash makes it a lot easier to spend! Over the years, I learned some important strategies for tracking and budgeting based off a tipped income.
The most important step is to track your tips from every shift. I would keep track of my total tips, hours worked and the day of the week for my shifts. This allowed me to track my hourly pay based off the day of the week. After a month or so, this gave me a good idea of how much I should expect to make per week based off the days I was working. There are various free apps that can track everything for you. My personal favorite is Tipsee.
Because most tipped jobs have a low hourly pay, typically paychecks are low after taxes are deducted. I found it best to exclude paychecks from my estimated income. Any paychecks I did receive were extra income and could go straight to my savings account!
I also got in the habit of setting aside a specific dollar bill size every night into savings. You can do this with whatever denomination you prefer: $1, $5, $10 or coin change. If you would rather set aside a certain percentage of your income, this works just as well. I recommend anywhere from 10%-15%. This savings will help on those weeks where your income is lower than normal. It will also help with any taxes that may be owed at the end of the year.
A large benefit of working a tipped job is that typically you can pick up other employee’s shifts. If at near the end of the month you haven’t made your bills, know you can cram in some extra shifts to make up the difference.
Need help structuring a budget?
Contact Apprisen to see how we can help! To schedule an appointment call 1-800-355-2227 or visit our website http://www.apprisen.com to chat with a representative.