Balance Your Books (And I Don't Mean Appointment Books)

3 steps to retire from a life behind the chair, and why you need to start NOW!


Have you ever been to a retirement party for a hairdresser? No? Me either. As hairdressers, we trade quite a bit of long term life security to do something that we absolutely love. Nobody makes it in this industry without passion for the work, and oh man does it give us warm fuzzies.


As hairdressers, we get to:


-Be happy, if not all day at least throughout the day,

-Express creativity

-See the look on a persons face who just regained their confidence

-Create lasting relationships

-Work in a fast paced environment

-Be the confidant our guests need

-Stay physically active all day

-Always have a wallet full of cash tips


...and so much more!



But what do we trade in for those luxuries?


-401K (and 401K matching)

-Health Insurance

-Scheduled Daily Breaks (sometimes going days without a lunch or any break at all)

-Paid Vacation

-Sick Leave

-Disability

-Bonuses

-Personal Days


Most of us who have been in the industry for 3+ years can justify not having those things because we make a good annual income and do well in tips, and hairdressers ALWAYS have cash, right?? But what are we DOING with that good annual income and all of those cash tips? Do you have a retirement account that you actively and regularly contribute to? Do you have life insurance? Do you have medical insurance? Do you have 3 months worth of monthly bills in savings in case of emergency? If you answered yes to any of these, I'm so proud of you! If you answered no to any of these, we can set you up to do better!




WE CAN DO BETTER


So many hairdressers have a story of a time they were thought less of for their career. Either a backhanded comment of "He/She just does hair", the question "What does your Husband/Wife do?", or the head nod followed by silence that most certainly feels like judgement. And you know what? I DON'T BLAME THESE JUDGEMENTAL PEOPLE. Yeah, I said it. Hairdressers as a whole haven't always been the most stand up citizens, even to the people who actually understand our industry! Can you imagine what it appears like to people who DON'T understand our industry?? They see a bunch of tattooed, pierced, gum chomping, gossipy men and women who play with hair and barely make ends meet (and probably lie on their tax income forms). Do you want to know why they see that? Because unfortunately, that is what the vast majority of our industry is. Are they nice people? Probably! Are they in debt? Probably! Do they live beyond their means? Probably! Do they have any idea what constitutes net worth? Probably not. None of that is reason for discouragement, weather you fall into that category, or you figured this out a long time ago!


Guys, I am by no means a finance guru, but I care very much about retiring well off and before my body can no longer take the daily grind of doing hair. I feel uniquely qualified to discuss this topic with you today because I am LIVING it every day. And If I can live it as a 100% single mom who moved cross country from my stable behind the chair income, rebuilt my entire clientele from the ground up, started over from ground zero financially, and work behind the chair THREE DAYS PER WEEK, then so can you. There are a few key things that are SO important to set yourself up for long term success moving forward in your career, and I want to give you the foundation to build on.


#1 Read A Book



If you want to get your finances in order, you need to learn about finances! My favorite way is through reading. I know that not everyone is a fan of reading (although I would be willing to bet you don't mind it, since you're reading this blog!), so I've included a few podcasts that I love as well that focus on financial matters. Instead of your usual jam session on the way to work, maybe turn on a finance podcast. Instead of a wild night out on the town, maybe stay in with your favorite bottle of wine and start knocking out a book. When I really sat down and took inventory of what I wanted to accomplish, I was amazed at how quickly I followed through on voluntarily parting with my money (more of a "goodbye for now"). Get educated on how to save, and how to allocate!!


Books:


- Smart Women Finish Rich -

- The Intelligent Investor -

- The Laws Of Wealth -

- The Richest Man In Babylon -

- The Millionaire Next Door -


Podcasts:


- How To Money -

- The Side Hustle Show -

- Business Unusual With Barbara Corcoran -

- The Dave Ramsey Show -

- Teach Me How To Money -




#2 Open A Retirement Account TODAY



I don't know the statistics, but I can tell you with confidence that the vast majority of beauty industry professionals are not offered a 401K through their place of employment, and even less are offered 401K matching. It is up to US to set up our retirement accounts and what is even harder... actively and consistently contribute to that account. GULP. The average american is depositing 3% of their paycheck to a retirement account, and that IS NOT ENOUGH. To retire with enough to actually live on, we need to be contributing at least 12% of our pre tax paycheck into our retirement account. Right now, right this very moment, you can literally open a retirement account online through your bank, or through a variety of companies who work in retirement and investing. I personally have a retirement account through The Vangaurd Group because I believe they are the best option. Every week, when my paycheck deposits into my checking account, I immediately transfer my allocated weekly retirement funds into my retirement account with Vanguard.


What does that look like?


A stylist making $40,000 annually before taxes is bringing home roughly $29,200 after taxes. This equals $2,433.33 per month, $1,216.67 bi weekly, and $608.33 weekly. NOW 12% of $40,000 is $4,800 annually that should be contributed to your retirement. This breaks down to $400 per month, $200 bi weekly, and $100 weekly. Where can you spare that money? I can imagine a lot of you are shaking your heads saying that you can't spare that money anywhere, you need every dime. But let me ask you this, if you had to come up with $100 in under one week to save your life, could you do it? And if so, how? For me, $100 is one $220 color & cut ticket. So by adding just one guest to my books for the week, I've now paid for my retirement contribution for the week. $100 is sometimes what I receive in cash tips during the week, there is my retirement contribution. $100 can EASILY be found in any eating out for the week. I'm not asking you to sacrifice all that is good in your life, I'm asking you to find the space for $100 toward your future well being this week. Then do it again next week. And the week after that.


How many of you have the kind of clientele that if you told them you were really taking your retirement planning seriously, and that by adding on a deep conditioning treatment to each guests service ticket you could contribute $100 more than you have been weekly to your retirement, they would start scheduling deep conditioning treatments? FIND THE MONEY. It's there, you have it, it's just hidden where you aren't seeing it. And here is the kicker guys... the average hairdresser makes just $24,850 annually. That means that the average hairdresser needs to find $63 per week to save. You can do that!! I know you can!


The longer your are regularly contributing funds, and the longer the money has to accumulate and collect interest, the more money you will have to retire with. Every day counts, do NOT put this off until next week! It won't get done! This is a priority, your future life depends on it. DO. THIS. NOW.


#3 Get ORGANIZED



What does it cost you to be alive each month? Do you know what you cost on a weekly basis? If your rent is $800, utilities are $180, groceries are $240, car payment is $300, gas is $120, that totals $1,540 monthly to be alive. If a $40,000 stylist has these monthly bills, what is happening with the remaining $893.33 monthly? Are clothes, nights out and cigarettes more important than your future? $893.33 monthly wiggle room gives you enough to contribute 12% to your retirement, purchase a life insurance policy AND still have some spending money! When you know where your money is going, you can decide what to keep spending money on, what to sacrifice, and what to rearrange. Knowledge is power, and finances are no exception!!




I want our industry members to be taken seriously. I want our industry members to be financially well. I want hairdressers to be hairdressers AND have a retirement party. Friends, read a book, listen to a podcast, and take action on your life. The future comes SO fast, and you have every opportunity to set yourself up for success!



Xoxo,

Willow

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