A 5 Step Guide to Saving Money as a Server

Working for tips can be great. As a bartender or server, it is wonderfully satisfying to take your cash home. It is like a reminder of your hard work and skills every single night you leave work. Also, cash feels much better in your hands than a piece of plastic and personally, I prefer buying everything I can with cash whenever possible. It really is true what they say: cash is king.

Despite all the benefits of being paid in cash, there are certainly some downfalls to this system. The worst of these is how hard it can be to budget, track and save. I know a lot of professional bartenders and servers who make fantastic money, but somehow always seem to be dead broke. Follow this short guide to avoid this with a step by step process of saving money as a server.

Step 1: Know your Goals

I like to use this as a first step because it will keep you focused. Sure, you can just put your cash in a sock drawer and build up a small nest egg; but without any real saving goals, you will be more likely to dip into your savings whenever you want to buy something unnecessary or go out for happy hour.

Sit down and be honest with yourself. Why do you want to save money? It could be for retirement, a down payment on a new car, a dream vacation or even a new TV. Whatever your savings goals are, stick to them. Write them down and post it on your refrigerator if you must. You will thank yourself later when you’re pennies away from that trip to Europe. All in all: stay focused.

Step 2: Track and Budget

This is where things begin to get a little more complicated. You need to track how much money you make and create a budget accordingly. Tracking the cash you take home sounds easy in theory, but it is unbelievably difficult to keep a record when all that is on your mind after a double shift is either a cold beer or kicking your shoes off and crawling in bed. This is what I recommend, carry a notebook with you to work and write down how much money you make each shift. Do it religiously. After. Every. Shift. This is the only way you will be able to create a realistic budget you can stick to.

After you track your tips for a month, do the math and see how much you are making weekly, bi-weekly and monthly. Once you have some solid numbers, start putting your expenses on paper (or Microsoft Excel if you are able.) Be honest with yourself, how much do you really spend on beer? How often do you eat at your favorite restaurant? Never low-ball your budget, always go for the higher number. This will make it easier to stay within your own personal budget.

A small section of my own budget on excel.

There are also a lot of great tools for budgeting, you can find some fantastic premade budget sheets on the internet. Play around with them and see what works. If you don’t have access to excel one of my favorite tools is Mint by Intuit Software. Mint is a mobile app that tracks your cash flow and spending all on your phone. It is very easy to use and can make budgeting a breeze.

Step 3: Deposit your Cash

Another step that is easier said than done and it is imperative for the next two steps of the process. You need to deposit your cash into your bank account as often as you can. I know the struggle of waking up early to run errands when you work until 4am every day but it is 100% necessary. Go to the bank or an ATM to deposit your cash, because the next two steps are how you are going to reach your goals.

Step 4: Automatically Transfer Money into Savings Accounts

This is something my dad taught me (we are both equally miserly.) Now that you have a budget that you are sticking to, you *hopefully* know how much disposable income you have available every month. This is where the real game begins. Find how much of that disposable income you are comfortable with not having every week and set up automatic transfers into a savings account. Some personal finance experts say you should save at least 20% of your income. I am not an expert, but I say you should save whatever you are comfortable with and build up from there. Even if it is just $25 a week, you must start somewhere. You will be surprised how much more money you will want to save once you start.

There is also a solid reason I automatically transfer my money. I do this because when the money automatically comes out of your account, so you don’t miss it. Its just gone. Yes, of course, it is still your money to do with what you please, but when it comes out of your checking account and into a savings account it makes it a lot harder to use. This is also a lot less painful than going to the bank and depositing your cash directly into savings.

Step 5: Invest your Money

Now, this is harder to achieve if you are starting from zero, but it is something that everyone should be doing. You need to invest your money if you are serious about saving, especially if you are saving for something big like retirement or a down-payment on a home.

I want to clarify yet again that I am by no means an expert in this stuff. I’m not a hedge fund manager, I’m a bartender. Regardless, I will let you know what worked for me. Save up a decent chunk of change, say, $1000. If you are serious about saving you can do this in a few months. Then open an account with Vanguard. You could open just a regular Brokerage account or IRA or Roth IRA if you want to save for retirement. Then buy ETFs (Exchange Traded Funds). These are investments that are diversified and managed professionally. They are generally safe and can get you very decent returns. You buy them and pretty much ignore them as they become more valuable. If you want to know more about them you can do your own research, but they have worked for millions of people for a very long time and they work for me. Vanguard also has a lot of great tools for novices like myself and you pick what ETFs, stocks, and bonds to choose based on the amount of risk you are comfortable with.

Once you get this set up, I recommend automatically transferring money into your investments as well, just as you do with your savings account. All I have left to say is that compound interest is the best thing that can happen to your wallet other than winning the lottery.

A Final Note

So now that I have laid out the steps, all you have left to is try it out for yourself. My word is by no means the law and through your own research, you may find information that disputes mine. The important thing is to just start. Once you do you will find little systems and routines that work best for you. Just like working in a kitchen, serving or behind the bar, everyone does things just a little bit different. If you are actually saving money, you can’t be doing that bad.