Working in the Service Industry? Make Your Cash Tips Work for You


For many, the lifestyle, freedom, and flexibility that a position in the service industry offers suits them to a tee. Connecting with the public and working in a fast-paced environment where no day is the same can be a real joy. Taking on a service role also means unusual shifts — ideal when factoring in classes or childcare.

While the lifestyle perks are clear, some financial pitfalls come with working as a server. Generally, the pay is lower than most other professions; the Canadian average is $16.32 per hour.

Shifts can fluctuate, with some days being cut short due to low patronage. Fewer hours and fewer customers naturally equates to fewer tips. That said, when those tips do flow in, the average server in a busy establishment will make approximately $30 per hour.

If you work in the service industry, make your cash tips work for you and allay the concerns of future financial stress. Here’s how.

Create an Emergency Savings Fund

If you haven’t built a fund already, dedicate a portion of your cash tips to an account that’s exclusively for emergencies. The balance of this account should sit at a mark that can cover three to six months of expenses.

This buffer will come in handy in an emergency, say, during the winter when your shifts have been cut back due to inclement weather, your oven breaks down, or your car won't start.

If you haven’t managed to create a fund, and an emergency presents itself and your name isn’t appearing on the schedule as much as you’d like, a personal line of credit may be able to get you out of a bind. Be sure to keep these in mind the next time you experience a personal emergency.

Allocate Some Cash to a Smart Savings Account

If you’ve been saving for a house, car, or other major expense, why not allocate some of your larger cash tips to a high-performing savings account and drive your goal forward?

Often, major brick-and-mortar financial institutions will offer you a basic savings account or one with sneaky hidden charges — simply for storing your money! Think outside of the box and look online for an accredited digital bank with no fees. The same applies when you’re looking for an account for your emergency fund, too.

Save Change and Use It for Daily Expenses

Those small coins can add up fast. Keep change aside in a bowl by your bed and use it for small, daily expenses — like that much-needed cup of morning coffee.

Earmark Some Money for Fun

Saving doesn’t need to be a rule-ridden bore. In fact, it can be quite fun! If there’s a travel destination on your radar, slowly chip away at the expense by designating a small portion of your tips toward it.

Self-Impose Rules

Last, it’s a good idea to set rules that can help keep you on track and accountable. For example, all your tips could go to your emergency account until you’ve reached your goal. Then, moving forward, $20s and $10s could go to your savings account while $2 coins could be directed towards your ‘for fun’ fund.

The Bottom Line

By taking time to divide your cash tips into different saving and spending streams, you’ll soon notice an impact on both your bank balance and your sense of financial comfort. Take some time and find a breakdown that works for you. You’ll surely be impressed with the results!