Financial Feminist - 174. Managing Tips, Freelance, and Inconsistent Income with Barbara Sloan (Replay)

Episode Date: July 30, 2024

Dealing with inconsistent income, whether you’re working in a tipped profession, as a contractor, or any other position where your income varies month to month, can make budgeting and planning your financials feel all the more difficult. In this replay episode, we spoke with Barbara Sloan, author of Tipped: The life-changing guide to financial freedom for waitresses, bartenders, strippers, and all other service industry professionals, to talk about managing finances when working with inconsistent income. Learn more at: www.tippedfinance.com Read transcripts, learn more about our guests and sponsors, and get more resources at: https://herfirst100k.com/financial-feminist-show-notes/174-managing-tips-freelance-and-inconsistent-income-with-barbara-sloan-replay/ Special thanks to our sponsors: Thrive Causemetics Get an exclusive 10% off your first order at thrivecausemetics.com/FFPOD Squarespace Go to www.squarespace.com/FFPOD to save 10% off your first website or domain purchase. Hill House Visit hillhousehome.com and use the discount code TORI at check out for 15% off. Indeed Visit indeed.com/FFPOD to get a seventy-five dollar sponsored job credit to get your jobs more visibility. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome back. Welcome back. Welcome back. This episode, oh my God, it is so damn good. And is one of the things we have been asked about time and time and time again. Today we are talking about managing finances when you don't have a consistent income. Inconsistent income is everything from working a job where you get tips to people who work in sales, to small business owners, and even some contractors. If your finances fluctuate month to month, you have inconsistent income. And no shock, this can make everything a little bit harder, but especially when you're trying to create a budget or a plan for your money. Today we sit down with Barbara Sloan. Barbara Sloan is the author of the book Tipped, the

life-changing guide to financial freedom for waitresses, bartenders, strippers, and all other service injury professionals. A homeless teen who danced for dollars and definitely did not graduate from college, she is now a personal finance expert and money coach that spent two decades working in every imaginable position in the service industry all over the country. In addition to owning and running a badass woman-owned construction company in the heart of Manhattan, she also helps tipped workers achieve financial freedom like she did. She is passionate about all of the amazing aspects of tipped work and passionate about all

of the terrible aspects of tipped work. Barbara is a total badass, and we talked about every subject she might be able to think of, budgeting, health insurance, retirement, and more. Send this episode to every server, dancer, actor, musician, painter, salesperson, contractor, business owner you know. Let's get into it. But first, a word from our sponsors. This episode of Financial Feminist is sponsored in part by ADT, Indeed, Hill House, Thrive Cosmetics, and Squarespace. ADT spends all their seconds helping protect all of yours. Count on ADT, America's most trusted name in home security.

Visit ADT.com today. Find quality candidates fast with Indeed. Get a $75 job credit for more visibility at Indeed.com slash FF pod. Hill House Home is the ultimate destination for dress girls with the perfect dresses for the summer season. Shop at hillhousehome.com and use discount code TORI for 15% off at checkout. Thrive Cosmetics lets you refresh your everyday look with foolproof vegan products made with clean skin loving ingredients. Get an exclusive 10% off your first order at thrivecosmetics.com slash ffpod.

Build a beautiful website to get your message out into the world with Squarespace. You're in New York? Yeah. Yeah. I'm in Harlem light, I like to say. You're in New York? Yeah, yeah. I'm in Harlem light, I like to say. Is that like not fully in it? It's like south of 110, but north of 96.

So like I'm from Detroit. I need a little vomit on the streets. I need a little graffiti, you know? But then I still like to be like one block away from Central Park. You know what I mean? Like I like a mix of it. So it's right where I want to be. You forget, I walked probably half of Central Park when I was living there in one day. I did like the, you know, on the border and you just don't realize how big it is. Like you know how big it is and then you look like it's just nuts when you're actually down there.

Massive. Oh, it's massive. And I love looking at all the TikToks of the property on Central Park. Have you seen those where it's like a $30 million apartment because it has a view of Central Park? Have you seen these? They're insane. We can talk about this, but the business, when people meet me, what they don't know is that I own a women owned and operated construction company and I focus on high-end residential. So I work for those people. I'm building those apartments. So you know. I know them very well. It's these, yeah, ridiculous. And if you haven't seen them on TikTok, look them up people, But like, it's literally, yeah, these like ridiculously expensive apartments just because they have like sweeping views of Central Park.

Yeah, if you're into real estate porn, you can check out my construction company, manhattanrenovations.com. So and yeah, the Yeah, so that's how I spend most of my days now is in that. spend most of my days now is in that. That is fantastic. You started your career though, as a paper girl. Yeah, right. And then you were working for various tipped positions as a teen and then into adulthood. What do you think it is about jobs in the tipped industry that are so appealing or like easy to fall into? Yeah, I mean, for me, it was I left, I left Michigan and moved to California and I was avoiding some creditors. I'd gotten myself seriously in debt. I had just at 19,

I'd purchased a house. I had renovated it. It was the house I grew up in. I took out 10 credit cards, I maxed them out and just got myself into a really terrible financial situation. Like my dad had passed away and that was my avenue for working through my grief was to restore my childhood home at 19 with no money, no experience, you know, very, very smart stuff. And so I took off to California kind of to dodge all of that. And I needed a job that paid cash. And I needed something that felt easy. Like my upbringing was a bit tough. And so finding the service industry was just like,

oh, it was people who understood. I also came out at 15. So the service industry was a place where I really felt like I was able to be myself. I was celebrated for who I was. I was able to be a little bit extra. I was able to get cash on a daily basis. I was able to move around the country pretty easily, location independent. It felt easy.

Do you feel like, I think one of the common benefits, there's many, I think, downsides to being a tipped worker, but you can just kind of pick up more shifts. I mean, it's kind of bullshit capitalism where it's just like, work more. But I think one of the things people do love is the flexibility of just being able to show up and be like, okay, I want to make more money this week. I'm going to show up and do another shift or I'm going to work overtime or I'm going to pick up hours. Did you feel like that was your experience? It's one of the few industries where you can work more to make more. Absolutely. I think that's one of the appeals to it.

I think that gets harder and harder as you get along in your timeline and into the industry over decades. But yeah, it's a big appeal up front. Do you remember those first few years of managing finances? What did that look like? So it's a lot of credit card debt, right? My God, I had so much credit card debt. I feel like I truly tested the limit of the credit system. I didn't know that the library could go after your credit, but they can. Oh, I did not

know that either. How does that work? If you check out books or books on CD, that'll age me. And you don't return them. I remember books on tape. You remember the ones on tape? Yeah. And you'd like open them and they would be in a little portfolio thing. And then you'd have to. Yeah. I listened to it. What was it? Old Yeller with my mom, books on tape. Oh, yeah. I think I had had like a nice event. I was really into like a nice event.

And 1984, I had both of those books on CD checked out from like the Las Vegas library and I didn't return them and yeah it hit my credit report. So that's where you were at for a while. That's where I was at. I was paid a loan. I was getting using Rent-A-Center. I remember going to Jamaica and having medical debt go on. I was like you they can hit your credit report from other countries? I had no idea. In those first few years,

it was a lot of learning really, really hard lessons. I grew up without any financial literacy. The only thing that was modeled for me was a debt cycle and luckily home ownership. Home ownership was modeled for me, which is what gave me the delusion that I could purchase a home at 19. Well, I think a lot of people's net worth, if it is positive, it's tied up in the equity

of a home. We know that from statistics. If you are an American who does have a positive net worth, it's most likely because of your home's equity, not because of your liquid assets. Also, I wanted to call out something that I have talked about so much, both on the podcast and in my book is payday loans. So the average payday loan interest rate in this country, and this is not a typo, this is not me screwing this up, is 400%. The average credit card interest rate is I think like 18%. We were probably going to max out at about 30% for the really predatory cards, 400%. So what was that cycle like for you?

Yeah, it was working lots of shifts. Those first few years, it was avoiding creditors. I moved around based on how much mail I got from creditors trying to seek, getting any sort of money. And they were relentless. That was before, I mean, I don't know if it was before any laws told them that they couldn't be harassing people, but it felt so heavy, so hard. And yeah, I talk about a lot of different debt management

strategies, and I was in ostrich mode. So I had my head in the sand, and I was just not looking at it. And so it took a long time for me to clean up my financial situation. And it was just tough. So I think that's one of the things, one of the reasons that I like to talk about is because I know it's so, it's just, it's hard. It's hard when you're in that position. Well, in the scarcity mindset of it all, when it's just, you're in survival mode and you can't think of anything else. There's no alternative. You mentioned that homeownership is like the number one way that a lot of Americans hold their equity. And yeah, it's one of two ways. The other way is a 401k. So most people build

wealth in this country through their 401k and through home ownership. And both of those are things that are not available to people easily in the service industry. And the other reason that life was so hard while I was working those first few years in the service industry, harder than I thought that they should be was because I didn't have any safety nets in place. Like a lot of people, when they start a nine to five, you're given paid time off,

you're given health insurance, you're given access to a 401k, you're given pre-tax benefits, you're given access to human resources. Human resources is such an important position. And that person in human resources, in my book, I call her HR Sharon. Sharon is our HR hero. And it's this one person that tells you to check a box on a form that helps you to build that wealth through automation. And it's the reason that most Americans are able to accumulate wealth. And it's the biggest reason that people in the service industry are not able to build well. They don't have access to those benefits.

They don't have safety nets. They aren't in a lot of situations claiming their income. And so they don't have access to traditional lending. They don't have access to social security, unemployment. I mean, you name it. Well, let's throw a global pandemic in there. I'm kind of jumping ahead a little bit, but it feels natural where, you know, you don't have these on a good day. What happens then when businesses shudder and when you're not able to work? Like, what does happen then?

So for a lot of people who were relying on unemployment, the service industry people were only getting that COVID booster portion of it. And I'm so thankful that that was there for a lot of people, because without that, people in the service industry would have had nothing. Majority of currently retired service industry professionals rely solely only on social security. And you know that in 2020, the average social security for people who claim their income in full was $20,000. If you can't

imagine living on half that, then you're in trouble. And when I started to research my book, and when I started to research my community and economics behind it, to realize that they were twice as likely to experience poverty, to realize that they age into the most economically disadvantaged people in the population, it was heartbreaking to me. And I dealt with imposter syndrome for a long time. I'm like, who the hell am I to talk about personal finance? Literally, I was like all steeped in shame from all of my past failures and financial mistakes. I'm like, who am I to talk to these people about this? You're actually the best person. You're the best person. financial mistakes. I'm like, who am I to talk to these people about this?

You're actually the best person. You're the best person. Thank you. I'm one person. I'm one person that people can look at. I think that, for me, I've gone the complete opposite way where I was lucky enough to have a financial education and made smart financial choices. And so I feel like, okay, it's my responsibility to pass that on. I do feel like for many people, it's actually really, really validating to hear from someone who financially struggled, who made bad decisions with money, who made this kind of decisions because those were the only decisions they had to make and navigated the system to the best of their ability. I mean, that's part of why we're having you on the show is I feel like a lot of people are going to be listening

and being like, yep, that was me or it is me right now. And there's something so validating about hearing that, you know, it can and hopefully does get better. Yeah, I think a big pivot moment for me was, it was like 2013. I just moved to New York City with my wife, I had like $700 in my pocket when I moved to New York. And I got two jobs. The first job I got was bartending at a bar called Coyote Ugly, which if you know it, you sing and dance on the bar, you whip your patrons, you get girls to take their bras off.

It's a damn good time. And then my second job was working on Wall Street in an unregulated market for these people doing part trading floor, part usurious loan products, loan sharking essentially. And that was a real education for me on the markets and on predatory lending and seeing the other side of it. And I was like, oh God, this is disgusting. I lasted about six months after the third trader got shipped off to rehab. And I was like, I'm going back to bars and construction because this is toxic as fuck.

And so I went and I got a job in construction working for the company that I now own. I was employee number three and I was set up. I was put in charge to build out the benefits system and an HR system. I had never had benefits before. I had never had benefits before. I had never had health insurance, maybe I had health insurance once. Definitely didn't have a 401k, definitely didn't have HR, definitely never had PTO.

And so I did a deep dive on all of those things and I was like, oh, this is the reason. These are the reasons. And then on the other side, like we were talking about, I deal with all of these really high net worth clients. I'm talking heiresses, people with what seem like unlimited resources and having conversations with them on a daily basis about how they viewed money, about the stocks and systems that they put in place, about their budgets, seeing that people of that level of wealth

budget was just eye-opening for me. And that was sort of when I was like, yeah, I need to take this information to the people. Right. Which, what a story to be working both of those at the same time and like a beautiful juxtaposition of two very different environments. And also weirdly the suffering in both, right? Both incredibly toxic. And like, I also kind of couldn't see, I couldn't see the problems fully while I was in both of them. Oh, you never can, right? It's been like being in a bad relationship as you get out and you're like, oh, that was that was bad. And you don't know it while you're in it. Yeah, totally. One of the things people ask me if they wanna become a business owner is,

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They actually stay put. Right now you can get an exclusive 10% off your first order at thrivecosmetics.com slash FF pod. Refresh your everyday look with Thrive Cosmetics, beauty that gives back. That's Thrive Cosmetics, C-A-U-S-E-M-E-T-I-C-S dot com slash FF pod for 10% off your first order. One of the things we came across in our research is how, of course, systemic issues affect tipped workers, but specifically like attractive servers, and I'm putting this in quotes,

right? Like stereotypically attractive people make better money, but like women of color are tipped consistently poorer in comparison. So we struggle with how to make the system more equitable in every aspect of personal finance, right? Have you found some answers to that specifically with tipped industries? That's like asking me to solve capitalism. Right? It's a really messed up system. So for me, I spend a lot of time talking to personal finance people. I spend a lot of time talking to people in the industry.

And I like to ask them what they want. And what people in the service industry want, what I hear more than anything is that they wanna keep tipping. Tipping comes from a really problematic history. It came about post slavery. It was popularized when employers post slavery realized that they could continue to profit off their black, brown, minority, and uneducated workers. Most of those formerly enslaved people went to work in railroads and

restaurants. And those were initially both tip positions. Railroad workers went on strike and they eventually got benefits, the standard benefits and standard minimum wage. Whereas service industry workers still today are the only sector of workers who have a different minimum wage. It's called a subminimum wage, which is federally $2.13. Right. Because in theory, it's supplemented with tips. In theory. That's in theory. Yeah. And so what people in the industry who work in the industry enjoy is they know that a portion of their wages is based on their performance. They like that risk versus reward aspect of it.

They like to know that there is no cap to how much they can earn. They like to know that their skills, which people don't often assume that there are skills in this industry, but these are highly skilled individuals. People with time management skills, with networking and social skills, they can bring up the energy of an establishment. They're there to entertain.

They are there to make you feel good about yourself. They might be the only smile that you get. So they have all of these skills and they want to be, they want and enjoy that that subjective experience is rewarded. What they don't like is being part of that sub-minimum wage, that $2.13 federally, which is just laughable, laughable. $1.50 less than a gallon of milk. Oh, it's crazy. You said something really

interesting, which is like they kind of enjoy the risk reward aspect. And immediately my personal finance brain goes to, we talk about risk a lot in terms of investing. Do you find that tipped workers, if they do start investing, are more likely to partake in the things that are riskier, like day trading or trying to pick the hot stock as opposed to things that are more consistent? I think that's a lot of younger investors who just got started investing in the last two years because the- That's the sexy investing. It's the Robinhood TikTok investing.

Which I'm so grateful because Robinhood at least democratized it, got more people involved. I like to say because your income has this level of volatility, you actually as an investor need to be more stable in the investments that you select. And so when I'm talking to people, stable in the investments that you select. And so when I'm talking to people, I'm saying you already have this risky fun side aspect to your overall financial picture. Lean into that. That's great. But let's make sure everything else is pretty secure. That's smart. Yeah. What are some of the ways that tipped workers can better handle their finances that is not normally discussed in the personal

finance advice. Are we going into budgeting? I'm so excited. When I talk about budgeting, I always like to talk about my experience as a fetish and kink worker because the lessons that I learned as a fetish and kink worker, I think apply perfectly to budgeting. The first lesson is only people who are into feet want to talk about feet. So if you are excited about getting into personal finance and getting into budgeting, find your people.

If you're going to be surrounded mostly by people who wanna talk about what they're spending on and the experiences that they're having, you're not to be surrounded mostly by people who want to talk about what they're spending on and the experiences that they're having, you're not going to be as successful. So you have to find your people. If you're making changes, you need to find people that will support that. So that's number one. Number two is the things that you want most should be a part of your budget. You don't have to be an entirely different person to budget.

Your life and what you're into and what you want are perfect to start right now. So if your budget, I think when most people think about budgets, they think about what they should have and not what they can have. And you can put what you can have into your budget. That may include substances, that may include toys, that may include a lot of things that don't and aren't a part of other people's budgets, but they should be part of yours.

Well, and I always joke too that it's not deprivation, right? You gave the example of like should as opposed to can. I, in my work, people always say, oh, it's shouldn't. And I'm like, no, it's what, it's what you can purchase. A budget is the gas gauge in your car, right? It's like, okay, I'm going to go out on a drive and I'd rather know that this is going to be a fun drive because I know I have gas in my car. That's what a budget is, is it's just the permission slip you need to actually be able to spend money while also knowing you're taking care of yourself. Because the worst thing in the world is like a pina colada on a beach somewhere with a side of guilt. Right? That's not fun.

I also like to always break down what a budget is. Like people are always like, oh, you know, like, it's just like it has this negative connotation from the get go. And so I think some people in our space will try to fancy it up and call it a spending plan. But like my people, the people I'm talking to, they kind of see through that. They're like, I'm calling bullshit on this spending plan. It's really a budget. I'm like, yes, it a spending plan. But like my people, the people I'm talking to, they kind of see through that. They're like, I'm calling bullshit on this spending plan. It's really a budget. I'm like, yes, it's a budget. But a budget is just an estimate

of your income and your expenses. It's just like a little bit, it's information. There's nothing inherently good or bad or moral that is attached to a budget. Now we can talk about budget culture, which is a very different thing than a budget. I think a lot of people in the space compare diets and diet culture and budget and budget culture. A diet is the same thing. There's nothing good or bad about a diet.

A diet is just a list of the things that you're eating, which is awesome. Right. Diet culture, super problematic. Budgets. There's nothing wrong with the budget. It's a list of things. Right. The actual definition of the word diet is what's going in your body versus like what we have diet like as a verb now, right? The noun diet is fine. It's literally like, yeah, what are you consuming versus dieting, right, is the typically restriction of something. Exactly. Exactly. So I like to break that down because I think people have an automatic aversion to it when really, it's just the information about the things that are in your life. The lesson number three that I like to share is boundaries. Boundaries are so

important and they are your job to communicate. So when you're budgeting, you have to be able to say no in order to get your money to go where you want it to go. So boundaries are a big part of budgeting. And the last thing I like to point out is discretion. Discretion is encouraged. You don't need to talk about your budget. You don't need to talk about your spending. No one's going to watch you budget. You don't need to feel judged. And so those are the four things I really like to point out before like diving into budgeting. I'm married to someone who does corporate finance

and I talk to her a lot about her job. She does financial planning analysis for publicly traded companies. And I always like to point out what her job is, which is, they take data trends. Then they make guesses. And then they look back to see if their guesses were right and if they need to make changes. And that was all respect to your your partner.

They're typically wrong. Yes, because they're guessing. So for people who are on a tipped income or working on a fluctuating income, you're gonna be doing the same thing. There's no magic here. You are going to be looking for trends, you're gonna be making guesses,

and then you're gonna look back and see if your guesses are right and if you need to make some changes. So for people who are working on a tip-based income or fluctuating income, most people think that you need to make some changes. So for people who are working on a tip-based income or fluctuating income, most people think that you need to start by setting a budget against your income. But you don't need to. If your income is wildly up and down,

you can budget off your expenses. You only need one side of the equation to be able to start a budget. So if your expenses are more fixed than your income, you would start your budget based off your expenses. And you can build in buffers for anywhere that there's some invariability. Most people don't realize that they have somewhat

of an intuitive plan in place already. For some people in the industry, they will have their fixed expenses and they will either hustle in the beginning of the month to make all of their money that they need for the month and then maybe they'll slow down their schedule in the end. Or maybe they'll work these really hard hitting shifts and kind of like really not try super hard on their lightweight shifts. So even if you think you're operating off of a plan, you have a plan. When I ask people who say, right, but I have a fluctuating income, I'm like, oh, is it like $7 this week

and $2 million next week? Are we talking that? And they'll say, no, it's a little bit tighter and we'll keep going in from there. I always tell people to start with tracking your income because there are trends. Even if you think there's no trends, there's trends, especially in the service industry.

If you're in a club environment, let's say you're a dancer, your summers are going to be slow. Your sporting events are going to be slow. And so for you, it's going to be important to build up your buffers and build up your savings in the winter. If you're somebody who's a bartender who's working on a patio, summers are going to be amazing for you. Right. And so you're going to lean harder into the summers and maybe build up your buffers then and save up for a slower winter. Every job, every environment has its own trends.

And when you kind of step back and you're able to track your income, you see those trends forming and then you're going to make a guess and then look back and see if that guess was accurate and adjust. And so those are the big, there's no, there's no secret. There's no mystery here for people.

You have to be a more diligent budgeter than people who are on a W-2 fixed nine to five income because of that, you know, volatility in your income. But that doesn't mean it's impossible. It just means that you have to work a little bit harder, which sucks, but guess what? There's a lot of perks to your flexibility and autonomy in these positions as well. What you just said was so brilliant. And if people were just casually listening, I need you to go back five minutes and listen again, because it's exactly right. No, it's true. And the question I think I get asked a lot too is

it's not just with tipped workers, but I think freelance sometimes feels the same way where it's inconsistent or I don't know what's going to happen or lack of access to health insurance and retirement. So in terms of managing the other things besides just income, do you have any advice or tips on how to manage that? How do you find affordable medical care slash therapy? How do you, I mean, we have episodes around saving for retirement as someone who isn't making a W-2 consistent income. There's options out there, but what is your advice to those people?

Yeah, I went 10 years without any medical insurance, dental insurance of any kind. Right? My entire body just like broke out into a sweat for you. I'm just like, Oh, God, I'm so glad. I mean, maybe you did. Did you have any like big disasters during those 10 years? I mean, I went out of the country for some stuff. I was thinking if you like getting a yeah, my brain immediately is like car accident, cancer, brain tumor. Like, oh, God. So lucky. But I'll tell you that that first dentist appointment after 10 years was not pretty and it was not cheap. And it was, on my part, it was a lot of short-term thinking where if I had just planned for an out-of-pocket cleaning, it would have been far less expensive

and far less painful. And so some of it's short-term thinking. You also just get a little pissed off in this industry because you're like, what the fuck? Everyone else gets these benefits and I don't have them. I shouldn't have to come out of pocket for this, but you're only hurting yourself. And so you have to, you say this beautifully, you have to, you can't lose capitalism. You can't lose. And so for people, it's not,

it's not gonna be the easiest thing for them to manage their finances, but you can absolutely still get yourself set up with benefits and you can still not lose capitalism. So the first thing I tell people to do for health insurance is go to the marketplace. I didn't have access to the marketplace and I know that prices are a lot, but it's available and it's a resource. And but it's available and it's a resource. And I hope that things get cheaper, but it's still an option and I encourage it.

So maybe health insurance doesn't feel like something you can take on right now. Get that information, have it in the back of your head. A lot of the insurances you may need to layer in. If health insurance doesn't feel like something you can tackle right now, maybe sign up for life insurance if you have kids. Like a short, you know, a short term policy, obviously, but maybe that's the maybe that's the first policy you put in place as you sort

of make peace with this expense of health care and how it can come into your your budget. You're not going to be able to just turn your whole financial life around at once. You layer these things in over time. Same thing goes with savings and retirement planning. When I first heard of an emergency fund, I was aghast. I was like, I'm sorry, you want me to put how much in a savings account? I live in New York City. You want that just sitting in a bank account, not- You want three months of living expenses? Exactly. Like not in a vacation fund, not as a down payment, just sitting there rotting.

Okay. Like I was pissed. And so I just spent months researching every single thing I could about emergency funds. Turned out he was totally right about that. He was a financial advisor. It was the only thing he was right about. And so for emergency funds, the one thing I like to point out to tipped workers is that it's the one thing that everyone else in the world has to do for themselves as well. No employer is setting up their employee with an emergency savings fund.

So here is the one thing that you're at the level, you're at level playing field with everyone else. Everyone else has to save for this and so do you, especially in this industry, especially COVID environment, and especially with the power imbalance of doing service work. So when you are working in the service industry, there's a power imbalance for the people

that are coming in. Every time you get a guest that comes in, they're your miniature boss for an hour. Which think about it, right? Like you have a new that comes in, they're your miniature boss for an hour. Which think about it, right? Like you have a new boss every hour. They come in, not knowing the rules. Oh God. When you put it that way, yeah. Yep, yep, yep, yep. They don't know the rules. They don't know the establishment. They don't know anything, but they're going to tell you how it's going to be. And you're going to do your best.

And so when you have an emergency fund, it gives you a little bit more power in that dynamic, which is really important to make sure that you can stay safe and that you can say no to problematic or unsafe situations. So emergency funds are super important and people who are working on a fluctuating income, tipped income, or even consultant gig workers, it's super important for them. I love to gamify the emergency fund for people who work in the service industry.

If you are, let's say you're a server working at a restaurant and you have a five table section, pick one of those tables to be your emergency savings tables so that you can gamify it a little bit. You will realize that you will treat those people so much more different than all the rest of your guests because those people are, that's your emergency fund section.

Or if you're at a bar, pick out a couple of seats. This is all of the tips that I get from these people are going to my emergency savings fund. You could also do this by a savings shift per week. Like maybe your Tuesday shifts are gonna go towards your emergency savings. Maybe if you're a dancer, all of the people wearing yellow shirts,

all of their money goes to, there's ways for you to make it fun so it doesn't feel like such a slog to get there. And then for retirement accounts, it's again, it's not as sexy for people in the nine to five who get to, oh, they get the pre-tax benefit, they get their employers picking all of these plans for them, their employers paying for, it's not gonna be

as great as that, but that doesn't mean that you can't still create retirement funds and have a successful and enjoyable retirement. And so for people who are technically W-2'd in the service industry, what you're gonna start off with is an IRA. You still have access to an IRA. When that bucket is full, and this is an important thing for people who work in the tipped industry, you have to claim enough in earned income in order to invest into an IRA.

This is very important for my tipped workers to know this, that if you do not claim, for example, $6,000 in income, you cannot invest $6,000 into a Roth or traditional IRA. But once you do, and that's taken care of, and that bucket is full, then you move on to a brokerage account. If you are a 1099 or off the books worker, and I will also say that if your job is making you be on a 1099 or paying you under the table, yes, fuck them, but also use this to your advantage. This means that you are a entrepreneur

and you have access to a bunch more things. You have access to write off a ton of your expenses. So like honestly, kind of take it. I always like to say let them fuck you the whole way. Back, front, everything. Everywhere, right? Like, all right.

I don't need your $2.13 because on the other side of that, I can open up a Sapphire A, which I can max out. And I can write off my gas and my mileage every time I drive to work. And I can write off insurance and my cell phone bill. And also the accountant who is filing my complicated taxes every year. Yeah. Mm hmm. So and it's part of your business or business is that you work from home. Well, cool. You get to write off part of your rent. Yeah.

Yeah. So I absolutely love when the employers of this industry are like, just, just stay off the books and then I feel bad because sometimes we have, we're not educated in this and so we'll say, no, I'm entitled to my $2 and 13 cents. And it's like, no, just let them keep that. Let them keep that. The Financial Feminist podcast is sponsored by ADT. ADT spends all of their seconds helping protect all of yours because a lot can happen in a second. Like one second your baby can't

walk and then suddenly they can. One second you're happily single and then next second you meet somebody next to you at a bar. Real thing that happened to me. Or maybe one second you have a business idea that seems like a total pipe dream and then suddenly it's a multi-million dollar business with a podcast and a book. And when it comes to your home, one second you feel safe and the next even if something does happen you still feel safe thanks to ADT. After all ADT is America's most trusted name in home security, because when every second counts count on ADT. Visit ADT.com today or call 1-800-ADT-ASAP. There are so many things you just said that were so impactful. First,

I will admit a little vulnerably, I just went to the dentist last month for the first time in three years. And I have health insurance. Now it's shit health insurance because I am young and healthy and also I own my own business. And also when you're a woman, health insurance is more expensive because they expect you to get pregnant at any time. Fun fact about that, but I now have to do what's called a deep cleaning because I did not go in for a really long time because the dentist scares me and now I have a higher bill than if I would just go in and do my cleanings and pay my co-pay and whatever. So, yep, echoing that. I also know a lot of my friends who are lower income or who are business owners who can't afford or, you know, don't have the benefits. They're sliding-scale therapy in a lot of major cities. You know, you can say, work with a

therapist who, you know, would normally charge $200 an hour, but is just charging $75 or $65 an hour. So that's a resource that's really impactful. So that's a resource that's really impactful. And then, yeah, could not agree more with like, if you get to get paid under the table, use it to your advantage. Like there are so many things you can write off. There are so many tax breaks that you can get. You just need to understand how to navigate that.

And I would honestly, that's where you like get a good accountant. And again, you get to write that off because they will teach you all of this. Back in 2016, I used my parents accountant, shout out Bill, and good old Bill sat down with me and was like, here's everything you can write off. And that was like a masterclass and understanding how to navigate all of this. Oh my gosh. Yeah. So, also with retirement, the other thing I like to point out for people, because I feel like a lot of people, when you make dollar bills as your income, it can feel really hard to get to a million dollars.

It can feel really hard to get to 500,000. It can feel really hard to get to these other amounts that people are talking about needing for retirement. Right. These milestone amounts. Yeah. Exactly. The first thing I always like to say is you're not saving that amount. You're investing that amount and it's going to double a bunch of times because of compound interest.

So you're not saving for retirement. You are investing for retirement. The second thing I also like to point out is that you are middle or lower income, you don't have as much to save for. Like if you're comparing yourself to somebody else who's high income, they are having to save for this huge lifestyle, the six figure lifestyle that they have to maintain.

If you're lower and middle income, not that it's gonna be easier, but you have a lot less that you have to invest for your retirement. Don't compare yourself to other people. It's totally possible for you. You know, you may not have access to a retirement account, but the only thing that makes it a retirement account

is that there's slight tax advantages. You can retire with a brokerage account. I always like to say this to people in personal finance space, because I think the analogy is the same, but a brokerage account is technically any account that they have at a brokerage firm. When we in the personal finance space are talking but a brokerage account is technically any account that they have at a brokerage firm. When we in the personal finance space are talking about a brokerage

account, we are talking about an after-tax account. And so anyone can have access to that. And you can absolutely use that as your vehicle to save and invest for your retirement. Yeah. I max out my retirement accounts, the ones that are available to me, like the IRA or the Solo 401k. And then because I make enough, I max those out and then I put everything else in a general brokerage account, which again is just a general account that's investing not for a particular purpose. It's not like retirement or a 529 for your kid's college. It's just a general investing account. So yeah, everyone has access to those. I also love what you said earlier

about like gamifying it. And even if you're not a tipped worker, I feel like you can do this too, of like, it would have been so fun for me to like sit in my nine to five job and be like for every bullshit meeting, my hourly rate gets to get saved. Or you know, it gets to be like put in a vacation fund. So every meeting I have to spend being mansplained to gets to go somewhere. And it's like, OK, that was probably at least three meetings a week. Yeah. For me, it was anyone who was a dick.

I took their tip and put it into an investment account. And then I was because I was like, that's the old time. Fuck you. Yeah, exactly. I'm going to be living off of this and you're going to have your golden handcuffs and still be working. And I'm going to be retired on your money because it's going to double a thousand different times. And shitty tips. You can take your shitty tips and invest those.

Because you're like, you know what? You don't want to give me 20%. I'll make it into 20%. Right? I love that. I love that so much. Another tip I have for budgeting and retirement planning is just people talk a lot about

the envelope system. I think the envelope system for the graduated people is just having a few different bank accounts. So I like to have a few different bank accounts. Again, if we're talking about using the money you have and making it work harder for you, just letting it sit in cash, just like high- high yield savings accounts are like 4% and like 4% is nothing to sneeze at right now. So good. So good. Yeah. So high yield savings accounts for sure. Instead of using the envelope system, we have like a graduated system of like using multiple bank accounts, which I think is really great when you have different priorities. I also like it for people in the service industry or gig workers.

This is a great hack for gig workers or tipped workers, and especially for spicy entertainers. So if you are a spicy entertainer and you put all of your money into your business account, you can pay yourself equal installments, which will make it easier for you to budget. This does double duty for spicy accountants in the event that one of your bank accounts gets shut down, which can happen. So it's really good for you to have multiple bank accounts at different institutions. And this also helps if you want to have one with like a high yield savings account and

you want to like pay yourself in equal installments, put yourself on a regular income. Smart. They shut bank accounts down? This is my own naivete. They can. Yeah. Cool.

I just read that somebody got a business bank account shut down because they used their debit card at a like a weed establishment in New York City. Which it's legal. Yes. Yes. But banks are federal and since it's not federally legal, then the institution can. Yeah. I'm here in Seattle and Washington where it's been legal for, oh God, probably eight

years at this point. And so it's just like, I'm like, what? Yes. But you forget how fucked up the rest of the country is. Like your state, Washington is awesome because they did away with the subminimum wage. And there's only 13 states that have done away with the subminimum wage. And so you realize that there's all of these other places in the country that are still really messed up and that we have a long way to go for tipped workers. Well, let's talk about that. It's a perfect transition of what thoughts do you have on

legislation to better regulate tipped industries, better support individuals? What are your thoughts on all of that? So I think when I first thought about this book, I didn't graduate college. I don't have any credentials. I don't know anyone who works for government, I don't have good language, you know, like I don't know how to talk to lobbyists. And so for me, the other industry that I've been a part of as long as the service industry is construction. And what is interesting about the construction industry is that there's this organization called OSHA. And OSHA was designed by the federal government to educate workers and employers to reduce the number of workplace injuries and deaths.

Once they educated the workforce, they changed the industry from within. And so that's my goal, right? Like I wanna educate the workforce and change the industry from within. And I think that the professionals who work in this industry have the ability to change the industry from within. And I think that the professionals who work in this industry have the ability to change the industry from within. It may start with them controlling what they can

control within their own finances, but eventually once you have that, then the power imbalance changes a lot. You can have more active conversations with your managers. You can have more active conversations with maybe the owners of the company. You can have more active conversations with, and that was a part of writing this book is like I wanted to give language to people to be able to advocate for themselves. I don't know what the answer is. I know that the sub minimum wage needs to change and that even that is not enough. There's an organization called One Fair Wage that is working towards legislation, right? They're making, they're putting things

on state ballots. They're trying to get things changed and I'm fully in support of that. Initially they were, they wanted to do away with tipping altogether, but they also talked to the workforce and realized that that's not what the workers wanted. And so we have to start with removing the sub minimum wage and go from there. Are there things that tipped workers can do as individuals to better advocate for themselves and for their pay? I mean, the first thing I would recommend is getting yourself an emergency fund, because once you have that, you are going to be able to speak up for yourself and others much more easily.

You have to protect yourself. And you can leave whenever you want. Yeah, exactly. You can set an example by walking out of a toxic environment when you're taken care of. You use this example beautifully. When your cup is full. And so you have to... Have you read my book? It sounds like you've read my book. Yeah. I just got it this week. I started skimming it. I've started to like... Thank you. You've said it a couple of times and I'm like, oh, I think she's read the book. Yes, I just got it.

I'm very excited. I got your book too. And I've been purposely not reading personal finance books as I've launched the books. I don't want to be influenced. And so yeah, I'm sitting down probably this year to read it. Yes. That's kind of where I'm at. I'm just, I, writing this book was really challenging.

Oh, I feel the same way, dude. I've talked on this podcast, people are probably sick of hearing about it, but this book was really challenging. Oh, I feel the same way, dude. I've talked on this podcast, people are probably sick of hearing about it, but like, this is the hardest thing I've ever done professionally. And I'm like, Oh my God. So I launched in August of last year. And yes, I bought a number of personal finance books that have not been able to like, read through them. Like, I love everybody in this industry, but it feels like work.

Like, it's not like a fun thing for me to sit down and do. And again, I'm sure your books great. There's books that are great. Like I buy people's books that I love and want to support. And like, but I'm also like, this is work for me when I sit down and read these books, like this feels like work because this is what I do every day. And it's also like no offense to any of us, but we're we're all talking about the same seven concepts in a different way. For me, like that's the whole thing about my book is I took all of the basic pillars of personal finance

and I adapted them to work for people who work in the industry. Now, it's and I took the same basics about personal finance and adapted them to have a feminist intersectional lens. Exactly. That's the hope, at least. And so the only thing that's different about mine is I have a feminist intersectional lens. Exactly. That's the hope at least. And so the only thing that's different about mine is I have a chapter, the book ends about mindset, and the first chapter is all the things that people are left out of and how their environment is different. And the different thing for my book is the first half of every chapter is what I call the patriarchal bullshit and all, which is what I talk about. Like, here are all of the systemic issues that are barring us from building wealth. Okay, here's what we can do about it.

Yeah. And you know what I love? The overlap for your message and my message. And this goes back to kind of like why we haven't seen much change in this subminimum wage is that two-thirds of people who over two-thirds of people who work in the service industry are women. Women. And so in caretaking roles and in other roles when it's mostly women, you are not seeing any any advocacy for increased wages. Childcare, teaching, health care, anywhere you find women,

you are not finding a whole lot of people. Sex work. Sex work, there's a, I talk about this a lot in the book, there's a huge overlap, and I have overlapped in both sex work and the service industry. And yeah, so there's not a lot of protection for women. Yep. It's sad.

I just hate it, I hate it here. I hate it here too. I hate it here. But we're doing what we can. We're doing what we can. And hopefully this information can help to change things. Like that is literally my goal is to. Right. I wrote the book I wish I had had at 20. I did. Yep. I did the same thing. Because if I had had this at 20, because I was always like, I was like into self-help pretty early on, even as a kid. Like I remember reading this. I feel like, again, women are like, girls are. Yeah, we have to be. Because we've been told constantly better yourself. And guys are out here just slobs, but it's something

with girls where it's like better yourself constantly never be satisfied with who you are ever, ever, ever. Chicken soup for the teenage soul. Oh, dude. Oh, God. Yes. Remember those books? Remember those fucking books? Yep. Yep. American girl, the care and keeping of you. Do you remember that one? Did you have that one? Can I ask how old you are? Yeah, I'm almost 40. I'll be 40 next year. Okay. So I may have, yeah. So I'm 28. There was people listening, they might remember. Maybe Kristin, our podcast producer, will also remember. There was an American Girl

book and I loved it. And it was about like, it was not even self-help. It was just like how to deal with your growing and changing body. And it was like so helpful where it was like, here's what pubic hair is and here's how to put in a tampon. And like when you're mad at your mom for seemingly no reason, that's completely normal. And like, anyway, can I, can I, can I like tail end that with my new favorite adult version book of that? Talk to me. Come as you are. Oh, I've heard about this. Oh my god. I feel like this is another book that's going to just like help us dismantle the patriarchy. Isn't it Come C-U-M? No, she's a doctor. She's super fucking credential. I think she went C-O-M-E. She's a professional. In my head, I thought, isn't it about sexual health or am I thinking

of a completely different book? Kristen, our thought, isn't it about sexual health or am I thinking of a completely different book? Kristin, our producer, popped in to let us know that it is basically insinuated and that there is a vulva-esque drawing on the cover. I'm literally Googling it right now. Yeah, so I think the three mandatory books that everyone should be reading is Tipped, Financial Feminist, and Come As You Are. Oh, yeah.

Hey, thanks. Yeah, definitely a, definitely, oh, it's a zipper that looks like a vulva. Yes, yes, yes. Okay. Well, great. I'm excited to read it. The surprising new science that will transform your sex life of, of, yeah, of, of The Care and Keeping of You, the American Girl book. Um, cool. I will check it out. My last question for you, what do you hope for the tipping industry? What are your hopes for the industry? What are your hopes for workers? Yeah. Obviously, dismantling the subminimum wage. 90% of people who work in the service

industry work for small mom and pop type establishments that don't have HR, that don't have any types of benefits. And my hope is that we get these businesses some HR. Now I am aware that these employers are not the employers from the post-Civil War era, right? These are good people who took their passion and love for food and beverage and service and sunk their savings into a very difficult business

with slim margins. And it's gonna take a while for those businesses, especially post-COVID, to catch up to be able to provide those types of benefits. But I think also as consumers, we need to remember that the service industry props up not only our communities, but our real estate values and so much of the other businesses in our communities. Nicole Sade And the just experience of being in a city.

I am the biggest foodie and that was one of, besides obviously the death and the suffering, the hardest things personally for me in the pandemic was the lack of experience of going into a restaurant and having a good meal and talking to people. And for the places that did survive, I think it is so important for us as individuals who don't work in the service industry to support the people that do, not only for their livelihoods, but also just for the joy and the vibrancy and the culture of a city or of a place. Yeah, I couldn't agree more. Yeah, I think it's, we need these establishments for our mental health. Who do we tell our secrets to? Our hairstylists, our bartenders, our sex workers, those are the people that we're telling everything to.

Those are the underpaid therapists of our world and they're struggling right now. Yeah, totally. We will link a bunch more resources in the show notes as well. Thank you for being here. Thank you for your expertise and your work. Where can people find you? Thank you so much for asking. People can find me on the socials at tipped

finance. I hang out mostly on Instagram. I'm starting on Tik Tok, but that's a youngest person game. That's tough. Um, I just did some standup. So I do stand up here in New York city. Cool. And I just posted, you know, Farnoosh Charabi does stand up in New York too. She and I have talked about this many times. Yeah. Yeah. She and I went to the same many times. Yeah. Yep. She and I went to the same comedy school. Cool.

Yeah. And so we actually both did our performance at Gotham Comedy Club. I love it. That's so cool. Yeah. It's a small, small world in New York. So yeah, if you're in New York, go see, go see the financial experts do stand up. Apparently we're just hilarious. There's also like weirdly with theater too, I joke there's a ton of us who have theater backgrounds like myself, Erin Lowry, Stephanie O'Connell Rodriguez, like there is a lot of people doing what we do with like theater or performance backgrounds, which is just

so random to me. It's because we're exposed to so much pain and we have to turn it into art. I like to think it's because I'm good at public speaking, but sure, we'll go with the pain. That's a better answer. Steal that. Oh my God. I love it. Thanks for being here. Thanks, Tori. Wow. Thank you again to Barbara for joining us for this episode. You can grab a copy of her book, Tipped, wherever you get your books and make sure to check out our show pays for more resources, transcripts from the episode and all the links you need to keep up with

Barbara and us. If you are new to the financial feminist community or maybe you're an oldie but a goodie and you haven't figured out what's next for you in your financial life, we have a free resource. It is our money personality quiz. It will literally give you personalized guidance in less than a minute for wherever you are in your financial life. It is completely free. You can go to herfirsthundredk.com slash quiz or herfirsthundredk.com slash start to consume all of those free resources and to get your personalized plan. We thank you for being here as always. Commit to doing one financial task that may seem scary today and we'll talk to you soon.

Thank you for listening to Financial Feminist, a Her First 100k podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristin Fields and Tamesha Grant. Research by Sarah Shortino. Audio and video engineering by Alyssa Medcalf. Marketing and operations by Karina Patel and Amanda Lefeu. Special thanks to our team at Her First 100K. Kaylyn Sprinkle, Masha Bakhmikiyev, Taylor Chil, Sasha Bonar, Ray Wong, Elizabeth McCumber, Claire Karonen, Darrell Ann Ingman, and Megan Walker.

Promotional graphics by Mary Stratton, photography by Sarah Wolf, and theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100K community for supporting the show. For more information about financial feminist, her first 100k, our guests and episode show notes, visit financialfeministpodcast.com. If you're confused about your personal finances and you're wondering where to start, go to herfirst100k.com slash quiz for a free personalized money plan. What's up everyone?

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