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
If you work in the service industry, make your
cash tips work for you and allay the concerns of future financial stress.
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
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
these in mind the next time you experience a personal
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.
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!