When you rely on tips to pay the bills, managing your money can be tricky. It’s hard to know exactly how much money you’ll be taking home after each shift, which makes planning and budgeting very difficult.
Not to mention the fact that the service industry has been hit hard during the COVID-19 pandemic. Add to that the rising cost of living and bad tips, and it can all seem a bit overwhelming.
But don’t worry – if you’re relying on advice, here are some things you can do right now.
1. Make sure you have a budget
When you rely on tips, your income can be unpredictable. Your net pay can be very different from shift to shift, week to week.
This can complicate planning your finances. But one of the most important things you can do for your finances is to have a budget. The first step is to start tracking your earnings. Writer and bartender Jeff Morrison suggests tracking your income after every shift for 10 weeks to find your average weekly salary.
“Choose the lowest of the averages and base your budget on that figure,” says Morrison. “Just to be sure. I expect you’ll find your income is more consistent than you think, as long as you take a longer-term view.
Next, choose a budgeting method. We like the 50/20/30 method because it makes things super easy and offers a lot of flexibility.
Here’s how it works:
- 50% of your income goes to the essentials.
- 20% goes towards financial goals.
- 30% goes towards personal expenses.
Once you understand, you can adjust the ratios to suit your specific situation. Find what works best for you and your goals.
2. Keep your money in an account that earns you 83 times what the big banks pay
Working for tips usually means you have a lot of money. But it doesn’t do you any good in your wallet or under your mattress. You should keep it in a place that earns you a lot of interest.
An account with Suction allows you to earn up to 5.00% APY, which is 83 times more than the big banks.
Not too bad!
Enter your email address here to get a free Aspiration Spend and Save account. After confirming your email, securely link your bank account so they can start helping you get extra money. Your money is FDIC insured and they use military grade encryption, which is nerd language for “it’s totally safe”.
3. Get paid up to $80/month – just for sharing your opinion
It’s no secret that the service industry has taken a few hits. If you rely on tips, you may need a little extra cash more than ever. We’ve found a very low-effort side gig that you can do in your spare time while you’re lounging on the couch.
A site called Survey Addict could pay you up to $80 a month just to complete surveys. Seriously.
There are many paid survey sites out there, but this one is one of the best we’ve found.
They will ask you about things like, what type of laundry detergent do you use? Or, Do you prefer Pepsi or Coke? You get points for responding, and many people rack up enough points to request verification within hours.
Over 10 million people already use Survey Junkie, and it has 4.5/5 stars on TrustPilot.
See how much extra money you could earn by visit Survey Junkie and clicking the “Register Now” button. It’s free.
4. Earn up to $249 playing games on your iPhone
If you play games on your iPhone, but you don’t win money every time, you are making a big mistake.
We know of three different apps that can earn you up to $83 each time you win a match. Whether you want to play Solitaire, Bingo, or just pop some bubbles, there’s an app to help you raise money.
Silver Solitaire, bingo cash and silver bubble are three of our favorite iPhone games that can make you big bucks. Each of them is completely free to download and there is no risk, since you can also play for free.
Even better? None of the apps have annoying ads to deal with, so you can keep playing and winning.
5. Immediately set aside 10-15% of what you earn each shift
Here’s another tip from contributing writer and bartender Jeff Morrison. It helps with taxes; set aside even more if you can.
Most people who rely on tips have a fairly low base pay rate, which means they’re often saddled with a big tax bill every year. Start planning and saving now so you don’t find yourself stuck later.
6. Invest 15 cents in the stock market
When you mainly deal with cash, it can be easy to forget about investing. And when money is tight, it’s not the first thing that comes to mind. But you can start small. Like, little pocket change.
That leftover change from your morning coffee or after-shift meal could turn into over $1,000.
That’s what happened when Penny Hoarder reader Jeremy Kolodziej opened an investment account with tassels. The app’s rounding feature raises each of your purchases to the nearest dollar and places the alternate currency on the stock market, which helped him thoughtlessly save $1,076 in about 20 months.
“It’s a virtual coin jar,” he says. “You don’t even think about it.” He used the loose change to pay for two vacations.
What’s more, Acorns invested the money for him, allowing him to grow his savings – without studying stock prices or managing trades.
The app costs $1 per month for balances below $1 million, and you’ll get a $5 bonus when you Register.
7. Cancel your car insurance
Working for tips, you don’t really have the luxury of working from home. And for many people, that means driving to work. When was the last time you compared auto insurance rates?
If it’s been more than six months since your last auto insurance quote, chances are you’re paying too much.
And if you browse a digital marketplace called SmartFinancialyou could get rates as low as $22 per month and save over $700 per year.
It takes a minute to get quotes from multiple insurers, so you can see all the best rates side-by-side. Yes, in just one minute you could save $715 this year. That’s big cash back in your pocket.
So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.
*Cash tournaments are not available in Arizona, Arkansas, Delaware, Indiana, Louisiana, Maine, Montana, South Carolina, South Dakota, Tennessee or Vermont.