How to Budget on an Inconsistent Income as a Hairstylist (Without Losing Your Mind)

 You know how much money we wasted every year, so he does better when. He only sees so much. He thinks I print money in the garage and we need to keep it that way when we need it. It’s oh, here it is. Michelle just transfers money over there. He doesn’t need to see it all. ’cause if he sees it all, he gets.

I don’t know. You just listen. We’re, what if you, this system that you got is working? I think it’s great. I’m just saying try to make a budget with all of the money, because I did. Every dollar is gonna be assigned somewhere. So yes, you guys need to bring in a lot of money, but then the best part of your budget is that income section.

Then it just goes downhill from there. ’cause then you got your. Your debt minimums. You got your, all of your bills, you have all your spending and all your savings. And he can still have his one account where you transfer his money, which is his spending money. I think that’s great. But just for your sake, just see yes, what is possible with all of the money together versus trying to make two separate.

But see you, you would have to make three separate budgets, one for your business, one for your husband’s paycheck, and one for yours.

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 hey Michelle. Thank you so much for coming on our podcast. We’re so excited to be here to help you out with whatever question you got. , What you got going on? Okay, so my husband is a police officer, so he gets the study paycheck. I’m a hairstylist, so my income is not. A little less. Yeah. Yeah, so I listen to the podcast and I’m like, okay, I don’t know what to do, how to do the automatic transfers for my income because it comes in, different days and different amounts, so that’s the part that I mostly get hung up on. Okay. Do you have a budget for your business and your personal, or is everything all mixed together? Our personal account, that’s USAA, so that’s where we take all the income out.

That’s all where all the bills and stuff come out. Mine, I. Do I have a budget? Yes. I feel like I do. Because I have my rent that’s taken out. I have the money that goes over into the supplies portion. Anything that I have to do the problem, I guess where I’m hung up is I’m doing manual transfers and then I’m not always.

Doing it the way I would like to do it. And then so far as taxes, being able to pay and stuff like that, I’ve never been great at, and that’s why we had a tax. I just so I’m okay, no, we get it. So it’s already hard enough, honestly, with just personal. And then you add in a business that makes it double it’s next level, at least double is hard.

And then you add in something, like you said, a hairstylist where things fluctuate. There’s different supply costs. Like it’s just, you get tips. Like it’s just, let’s take the most complicated way of financially of a business. And let’s have that so fun. So that we get it. It’s all very complicated.

That’s why it, it feels messy to begin. Yeah. And we’ve actually had some hair stylists as clients. And we are versed in this area. But really, and we hear what you’re saying, you you’re aiming for that automatic life. We get it and we want that for you.

So what we would say is it doesn’t matter how inconsistent your income is, it can still feel consistent and you have the power to do that. You just have to get everything set up just a little bit more organized in your business side. So what we would say is you need to open up a, an income. So I’m gonna encourage you to listen to this podcast when it actually comes out and pause and take notes.

But we want you to open up an income checking account where all of your income comes into for your business. And then we want you to have an expense account, which is also a checking account where you’re paying all of your bills out of for your business. Now I’m talking strictly business right now.

So you’re consistently transferring the exact same amount into that expense account. So you know what is gonna get paid. And it’s again, a consistent amount of money that’s going in there. And then I know you have supplies, so we actually recommend that be separate because it is inconsistent. We want you to be saving, if you think of how much does it cost me to run my business in a year as far as supplies and how much do I spend on shampoo and clippers and things like that.

Take that number, divide it by 12, and consistently be putting money in a supplies savings bucket for yourself. So that way when the time comes and you need the money, it’s there, but you’ve been putting the same amount every month. Does that make sense? So then at this point, you can automatically put the same amount of money in your expense account, automatically put the same amount of money in that.

That supplies, savings bucket and then automatically be paying yourself consistently, whatever you want or whatever you need to your personal budget. Yeah. So the other thing there, Michelle, is when you said about taxes, you’re also gonna do that. Oh, yeah. Sorry. What you really wanna do is you have to set up a basic budget for your business.

It doesn’t have to be super complicated, but we wanna know, what does your business need? From your business revenue before we can give it any of it to your personal, that way you, everything’s covered there. So generally you want you could have some basic numbers monthly, we know that they might fluctuate.

Some of that might fluctuate. But if you have a general amount for bills, a general amount for spending, which might be some of the supplies or whatever that you need to do each month, a general amount that you’re saving, right? This is for taxes, for annual certifications, bills all the supplies tax, like CPA fees too.

You wanna know all of that, and that will inform an amount that you can pay yourself monthly after you’ve taken care of all of that. You can pay yourself regularly once you know that. It’s the not knowing and the back and forth. And I get a lot of income. I don’t get a lot of income. And so you can do that and, see what you, what sort of as, for example, I have a client that owns a spot and she pays herself 600 bucks a week.

And she has a lot of her expenses are tied in her. In her business right now. So that’s as much as she can do to pay herself. And so you could do that. You can actually make it regular to know to be able to pay yourself a paycheck on the other side. When it comes to your personal budget, you wanted to do the same there too, because what you can do is you see, you have your husband’s income.

You have all of your bills you have what you guys wanna set up for different spending categories, restaurants gas and groceries, personal spending, kids, whatever you need to see what you wanna pay as far as savings. But you might see I only need $500 to make this budget come true from your business. So then I’m actually making more of my business than I truly need in personal, and that, that’s exciting. That’s a good number. That’s a good information to know. Then you can always decide if I’m making more on my business, do I wanna reinvest that in the business or if I, or do I wanna put that to something specific in the personal, but really getting a clear picture of what each. Ver version of you cost, right? Your personal life and your business life. That’s a really good first step. And another thing here is, your business yes, is inconsistent based on the number of clients that show up and book and everything.

But on the low months, you know that you have money in that income account because you’ve kept it in there. Okay. And in the high months, we don’t wanna just take extra money out, we wanna just consistently pay ourselves as exact same amount. Whatever your personal budget says that you need to pay yourself.

And Shayna said, you’re gonna, you’re gonna you could reinvest extra money back in your business, but for you, because it’s inconsistent, you’re gonna need to get a couple of months in to say, okay, am I good? To be able to leave this money in or can I reinvest it based on, business.

I know I had a client who, you’re busier during the holidays, but not as busy in January, right? Because people are trying to get their haired for Christmas parties and everything. And then probably same right now people are getting ready for summer. So I would look at your income, previous income to go, when are my slow months, what are my high months?

And to make sure that your high months are funding your low months in your business. And the other thing is, if you can get as much of your budget covered with just your husband’s pay and then you know what you are able to pull

over from your business every month like that can go to something bigger or whatever, that also, can be an exciting way to live that, if you’re able to live on what he makes, so you’re truly living under your means, okay. So we said a lot of things. Yeah. You have to have questions. Or else we’ll keep talking and that’s not nice because it was so much already. Okay. So for us, he takes care of all the bills. The only thing I pay for is anything for my business and my car. So that part. It’s just for me, I have all these accounts.

USAA is like our meat and potatoes, that’s all his salary and all the different accounts over in maybe federal is where I have all my business stuff. So I’m just, I have my spending account, I have my Bills account, I have the, salon supplies account. So what you were saying is that I need a bills.

Account and a supplies account, you need an income account. So with business, there’s one extra checking, which is an income account because we want the money to pool there, especially with businesses that have inconsistent income because you may have high months lows. We need to be able to pool that money in your income account, W which is going to fund your expense account and fund that supplies account, and then any savings that you have.

Hold on. Okay. So yeah you were saying that I need an income account, a supplies account, and a bills account. . Yes. And you’re also gonna need savings account for taxes. Yes. And then maybe any other savings bucket you need. But why do you have a Bills account in Navy? Is that a personal Bills account?

It’s my personal bills account. Okay. So what are your personal bills? Pilates. Okay. Ate. So we’re paying more than just. Yeah, but these are yeah. Okay. Of my little personal goodies. So lashes are not a bill that’s, see, I gotta, these are must have. Oh girl. Yes, I’m, I get it. But that’s not a bill, that’s a spending category.

So what you need is a glam up fund. You need a glam up fund. Okay. And then you need a bill. So your car note is a bill, your Pilates, that’s a consistent charge, I’m sure every month. That’s a bill. But things that you go spend money on, like nail, nails, hair, lashes, massages, Starbucks, runs, target, runs, all that is personal fun money, which is, it’s a must.

We love it. I’m not discounting it, but we, it’s not a bill. We wanna separate that. ’cause you need to be able to see how much you’re spending on bills and how much you’re spending on yourself separately. Okay. And that comes out of my spending account. Your personal spending account. My personal spending account.

So the way it would work, it’s a it’s slightly different because you and your husband have your finances separate, but your, you have your personal, your business income account, okay? That is funding. You have your business bills that have to get paid. You have your business savings, all of that.

You are gonna give yourself a paycheck to your personal bills, either every other week, once a month, however often you decide that personal paycheck goes into your personal bills and you keep as much in there for the bills as you need. And then you’re gonna transfer out as much as you need for different spending categories.

Because who who’s paying for the groceries? I do. Okay. So we’ve got, you really need a personal budget. You’ve gotta, you’re gonna have to do your own personal budget because it’s not as simple as I have to pay the car note. Yeah, you have the car note. Now we have the Pilates that is now changed. We have groceries.

Things are evolving. You probably, yeah, you probably have, we want you to write all of that down so that you know what you need to be bringing over from the business and so that you can afford all of the things that you want in your budget. My Bills account, so I have that in the budget for those things to come out of the bills.

And then I have what, like groceries? Yeah, the groceries, the Pilate, wait no. What’s coming out of my account? This is how I want you to think of it. If you’re getting invoiced for it or you’re getting billed for it, it’s a bill. If you’re paying for it, if you’re swiping for it. If you’re clicking, buy now, add to cart, and you’re tapping for it, that’s spending, so gas, groceries, that’s all spending.

That’s spending. Okay. We’re okay. I want you to think of wants and needs, like we’re gonna erase that from your brain. Okay. Wants and needs are not a thing. We are. We have bills and we have spending. Okay. Okay. So yes, groceries is a need and I know some people do try to put it in bills, but it’s not a bill.

You don’t get invoiced for it. You pay for it like with cash or a debit card. Yeah. And what we want, Michelle, is for you to have your grocery account and know I have this much money for groceries. I know my bills are getting paid separate of that. I don’t have to do math in the moment to make sure I have enough to go get groceries as long as the car note’s gonna get paid.

And the same for your glam up stuff, right? Like you want that in a separate spending. I clearly can look at one glance, I have enough money in there for the bills. That’s good. I have enough money over there for groceries. I know exactly how much I have and I have this money to spend. And they’re all separate.

And easy to understand.

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 I think that, I think maybe as a woman, you’re always thinking, especially if you have, if you’re, if you have your own business and then your spouse has the regular income I don’t know. I don’t really count my money as, I don’t count my money the same.

Does that make sense?

I think that’s normal. His is very, like I have that account very structured mine. I try to structure it, but I’m like, it’s just hard to get the automation portion. Like where, what goes So this, that’s because you have to get the, that’s just because your business budget isn’t done yet. Once you get your business organized with the accounts that you need.

And we would recommend if you’d like to read or you wanna listen to an audio book. Download Mike Michalowicz’s profit First, and that’ll kinda and it can go super in depth and super advanced. But the level that we’re talking for you is the intermediate, right? It’s the bill, it’s the income account, the expense account.

So once you get that organized, you being able to make your personal budget. Automated is gonna be easier, but it’s messy because the business isn’t automated. I also think it’s messy. Yes. I also think it’s messy because you have, you’re doing them separately. Yes. You have his fine, his stuff and your stuff.

Yes. And totally understand. He’s, he’s the provider. His paycheck is what you guys are counting on and, is steady. But also once you get this fi figured out, Michelle, you don’t know what. What your business could make possible for you guys. What, or it could do once you, every, you’ve got it systemized, you’ve got it organized, and maybe you make a lot more than you think, you think, or maybe you can do more with this and you can add to you guys’ personal budget or your savings or your retirement or for vacation.

I think. Especially like in the beginning when you’re like, I hope this thing gets off the ground. You know what I’m doing and I hope get steady. But it could really be a big thing. And then you want to actually be using that income on purpose just like you do his, instead of just keeping it in this, people call it a side hustle, or my small business or this little thing or whatever.

We wanna speak life over it. It could be doing a lot for your life. And it is. Important and awesome and it deserves a spot at the budget table, yeah. And what if you combined your finances and see like the whole picture of what you and your husband’s money can do together, not separate.

‘Cause lot of that’s a problem only because you can’t see all the money. If he sees all the money, then Ooh, babe, we should get that. We’re terrible. We’re not real good window shoppers, like if we see it, we like it, we get it. And if he sees the money there, he’s oh babe, don’t you want, we used to get a car every single year.

You know how much money we wasted every year, so he does better when. He only sees so much. He thinks I print money in the garage and we need to keep it that way when we need it. It’s oh, here it is. Michelle just transfers money over there. He doesn’t need to see it all. ’cause if he sees it all, he gets.

I don’t know. You just listen. We’re, what if you, this system that you got is working? I think it’s great. I’m just saying try to make a budget with all of the money, because I did. Every dollar is gonna be assigned somewhere. So yes, you guys need to bring in a lot of money, but then the best part of your budget is that income section.

Then it just goes downhill from there. ’cause then you got your. Your debt minimums. You got your, all of your bills, you have all your spending and all your savings. And he can still have his one account where you transfer his money, which is his spending money. I think that’s great. But just for your sake, just see yes, what is possible with all of the money together versus trying to make two separate.

But see you, you would have to make three separate budgets, one for your business, one for your husband’s paycheck, and one for yours. See, and I, the way I was doing it was I had his stuff or our stuff over there, he was dry cleaning the gas and stuff like that. Mine. I just kept it separate. I dunno why I keep it separate.

I just, he makes me nervous when he sees too much money. He just makes me ner. That’s when things start happening, when he sees all the money. So what Vanessa’s saying is maybe at least look at it all on one paper and see what it looks like. I do. So when I. When I follow your thing to create the budget, I put all, every, everything that comes out of the house.

So that’s all on the budget. It’s just not coming out of one account. Okay. Yeah. ’cause I was gonna say. When you decide all of this extra, you can move it where people can’t see it, like high yield savings accounts that are for a designated purpose and you’re making sure that they’re funded. That’s great.

But so it sounds like really your step is if you can get your business organized, you’ll know you’ll have a much Yes. That’s the part that, that I’ve been struggling with. I’m like, okay, I’m putting money for supplies for the business. That’s about it. Everything else is either so yeah, so try to think of it in a year’s view.

So like our accountant tells us how much to set aside for taxes a month. Now obviously it might go up or down depending on how the actual income year, but it’s nice to know a certain amount. You can do that okay. You can, like Vanessa said, look at your supplies. Again, it doesn’t have to be a perfect number, but if you know you spend $10,000 a year, let’s set aside a certain amount each month so that is covered.

And it doesn’t have to be this wonky thing every month that you’re dealing with. And the same with any bills. That you need to set that aside in the business. And then the rest of it, that you can, you can, like Vanessa said, you can either pull it in there to, to for the low months, or you can assign a specific job with your income.

Once all those things are covered. But you gotta get everything else. You have to know your bills, know how much your business costs in a year. That is the big ticket. I think that, remember that’s the key thing. The kicker I’m missing. Yeah. It’s not fun. It’s, nobody’s gonna lie.

We’re not gonna have fun writing all this down, figuring out, but it will feel so much better once it’s done. Yes. It’ll feel so freeing, knowing exactly how much you need to set aside every month to make all that work. And then your tax account you open an account, you call the taxes. So you’re doing really good.

You’re in charge of all these finances. This is the next step for you. Is to not be behind on that or to start feeling like you’re in control over that. So just set, open it up and make sure you’re putting a certain amount into it each month so that you can be ahead this year on that. Okay.

Yes. Is it common to get overwhelmed? Because I feel like by the. For taxes and for car. I’m like, we can’t spend any money right now. I think that’s the gut check moment. So like when you see, when you say your husband gets excited, when he see all the money. When he sees all the money, like it’s, yeah, but, okay, great.

But look at all these other lines. Like the money is, we’re in the red, right? We, it’s all deleting from your budget. Yes. So yes, it is common to be overwhelmed at the beginning, but okay, once you get everything on auto pay and you know exactly what’s coming in, it is nice to know that you have this amount for gas and groceries, this amount for spending, this amount for family fund, whatever.

And also know that all your bills are taken care of and your spending accounts are growing. I also wanna say it’s overwhelming to think you have the money and then not actually have the money, but be spending the money. That’s also overwhelming. Yeah. So what, at least this can do, Michelle is give you a number that you need to hit.

If I know that all of this is being spent because I need to sit up for taxes, my supplies, the bills. Then I know, okay, my new goal instead of the 3000 is that I make 4,000 a month. That way I know I have a thousand extra I can play around and have fun with, right? But what I’m saying is the math didn’t change just because you wrote it all down, right?

Yeah. It’s like you’re actually seeing right now, oh, I’ve been spending more than I probably should have. And pick your hard, right? So yes, it’s gonna be overwhelming at first to go, oh my gosh, I cannot believe I cost this much. One time you are gonna say that one time. And then from there you’re gonna create a system that works.

Or Shayna said, you can just continuously be in the unknown, in that void of not, you don’t know what your money can do for you because you’re just confused and that that’s also stressful, so you just gotta pick one. Okay. Yeah. Okay. Okay. We threw a lot at you, Michelle. Hopefully that gives you a place to start and we really appreciate you coming on and chatting with us.

Thank you. And we’re also banks because we have all the same banks, so good job. Yeah. I was listening to one of your podcasts this morning and I was like, oh yeah, she’s, we love Navy Fed and usaa. Yes, we do. Yes. Yes. Okay. You have a wonderful day, Michelle. Thank you. Bye. Thank you too.

Okay. Bye-bye.

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