Budgeting can be difficult no matter what type of job you work.
But because bartenders often get paid in cash tips and are rarely offered health insurance or 401k plans, it can be extra difficult to budget and save if your career is behind the stick. But it’s certainly not impossible to save money as a bartender if you stick to a solid plan. To help us navigate the best way to set yourself up, we sat down with Benjamin Sargent, a Certified Public Accountant who works with a lot of freelancers on budgeting and tax preparation. Sargent gave us some expert tips on getting your finances into tip-top order if you’re working as a bartender.
When It Comes to Health Insurance, Paying More Often Pays Off
If you’re a bartender in the United States, you’re aware of the high cost of health insurance. Unless you work for a big, corporate restaurant group, chances are that the establishment for which you work does not offer health insurance. We’ve been there; so, we know that researching and choosing a health plan of your own can be daunting. With so many choices and confusing jargon, it can be difficult to decide which course of action is best for you, especially if you’re fairly healthy with no chronic illnesses.
But one thing Sargent does recommend when choosing a healthcare plan is to keep the deductible in mind. “When it comes to selecting a health insurance plan, a higher deductible will usually give a lower monthly premium,” he says. “But if you end up getting hurt and hitting those deductibles, you may end up paying a lot more in the end with a high deductible plan.” Even though low monthly payments may seem appealing in the beginning, sometimes paying a little extra will save you money in the long run.
When choosing a health plan, don’t be bashful about asking for help. Contact a friend (or heck, even a parent—we’re not judging!) who is more knowledgeable about the subject to help you navigate your choices. While you may not always end up with something completely perfect, having insurance will likely save you money in the long run.
Properly Plan for Expenses
Getting paid in cash tips is pretty great, but it does have its downfalls. Some shifts are more lucrative than others, so you really have to plan for those weeks when not as much cash is flowing in. But as you get into the groove of a job, you’ll start to learn more about payment patterns and get an idea of when you’re going to have up weeks and down weeks. Sargent says it’s important to pay attention to these ebbs and flows so you can budget accordingly. “While it’s hard to do, try to plan your fixed expenses (rent, bills, etc) around what your lower average week is, and then use the better weeks to either save or catch up on any surprise overages,” he says. “It’s not easy, especially in a high-cost city like New York, but that’s the best way.”
If you plan your expenses around weeks when you bring in less money, you’re less likely to be in the red when a big expense comes along. And it will be easier to save for long term goals like retirement, or even for that long weekend trip you’ve been planning. Yes, it is tough to do, but you’ll be happy after looking at what a year of saving can do for your bank account.
Have a Savings Goal
Saving money is easier said than done. We’ve all received a fat paycheck that we’ve decided to spend on something fun instead of depositing it directly into a savings account. So, having a savings plan is going to make putting money away that much easier because you have clear goals of where you want that money to eventually go. Sargent says an emergency fund that covers one month of your expenses should be your first savings goal. That way, when a surprise expense (or even a layoff) comes along, you’ll be prepared.
“This one isn’t a one-size-fits-all answer, but if you’re able to survive on the leaner weeks, those better weeks should first go towards building (or refilling) a small emergency fund (one month of expenses), then paying off debt, then finally putting more aside in savings towards your longer-term goals,” Sargent says. Even if you’re paying off debt in smaller amounts every month, make sure your minimum payment is at least more than the interest being accrued so you’re actually making progress. And of course, saving for those long-term goals may seem impossible, but even putting away 10 percent of your weekly take home pay will make a bigger difference than not saving anything at all.
Technology Can Help
We’re constantly on our phones, so we might as well download an app that can help properly keep track of finances. “For personal budgeting, Mint.com is one of the best-supported apps and can definitely help get a handle on where your money is going each month,” Sargent says. Mint is a great choice, especially if you’re a personal finance newbie. If you hate math, Albert is great because it uses an algorithm to determine how much you can save each month. And Clarity Money is awesome if you’re a serial subscriber because it helps cancel those unwanted accounts that are draining your wallet without you even realizing.
While these apps are super helpful, taking care of your finances is up to you in the end. “It’s easy to get caught up in what tool is best, but the biggest thing is that you do it, regardless of whether it’s an app, spreadsheet or pencil and paper,” Sargent says. “It’s the doing that’s important, not the how.”
As part of their continued wellness advocacy initiatives, The Perfect Purée of Napa Valley sponsors this series on maintaining life balance in the bartending industry. Bartenders may request a complimentary sampling of their premium fruit purées, concentrates and blends at PerfectPuree.com/ChilledSample.