Business sustainability in the piercing industry generally requires financial planning, unless you plan on living with your parents for the rest of your life or you have landed a sugar daddy or mama. Knowing and doing what it takes to keep your finances in order is important. Regardless of whether you are a staff member or the owner of a studio, both positions require a healthy cash flow and good money management skills. I am going to lightly touch on a variety of financial planning topics that apply to everybody in the piercing industry and I encourage you to use this article as a jumping point to explore these topics and start working towards better financial success.

Understanding your cash flow is as important for staff members as it is for business owners, although hourly or salaried employees do have an advantage in this due to having an income that can be more steady and predictable. It is crucial that you truly know how much money is coming in and how much money is going out. The understanding of your income to output is necessary to start budgeting and improving your financial situation. Take the time to estimate what you might spend on various purchasing categories and then compare that to what you ended up spending. You will probably be very surprised to find out how much you really do spend on certain things.

Some examples of different expenses as an individual or business owner can include:

Business:

• Inventory
• Piercing supplies
• Janitorial items
• Payroll
• Office supplies
• Advertising, printing  

Personal

• Groceries
• Gas
• Medical bills
• Pet care/child care
• Clothing
• Entertainment and dining out

Both Personal and Business:

• Rent
• Insurance
• Utilities
• Loans
• Telephone
• Internet
  

Tracking your current spending habits can be done in a variety of ways. I can tell you from personal experience that the various apps available are easier for tracking personal spending. They are just so much simpler to use than trying to keep track of your spending habits on paper. I have tried a handful of different apps and discuss my two favorites below. There is no excuse for not trying out one or both of these apps, because both are available as free downloads.

Mint: Personal Finance, Budget, Bills & Money – This application is offered by the makers of Intuit and TurboTax, and if you have ever used programs from either company, you know that many of their products are straightforward and easy to use. This program provides a more complete picture of your finances by bringing together your bank accounts, credit cards, bills and investments so you can get an overview of where you are at. There are also some great features such as staying up to date on your credit score (and getting pointers for how to improve it), bill payment reminders (to decrease the likelihood of being late on a payment), and the ability to create budgets. My favorite thing about this program is that you can sync your various financial accounts with Mint, so your financial transactions are automatically updated and you only need to manually enter cash transactions.

Every Dollar: Budget, Manage Money, Track Spending – This application is offered by money management professional, Dave Ramsey, who is one of the leading experts on financial planning for retirement and eliminating debt. This is a great program for budgeting, and I love the ease in which you can view how your monthly spending was planned, compared to how much has been spent and how much is remaining. However, you cannot sync this with your financial accounts unless you pay a $9.99 monthly subscription to EveryDollar Plus. I like the formatting and ease of entering and editing transactions a little more in this program.

Overall, I personally favor the Mint program more due to the free financial account syncing and additional features offered.

Once you have a sense of how much money you are making versus how much you are spending, you can start budgeting. I know budgeting sounds boring, but trust me: it is going to make a world of difference in your financial future. It is easy to casually spend money as things come up. Planning your spending for the month makes it is much harder to randomly spend money, allowing you to strategically cut from one or more categories as necessary. For example: you will be more likely to think twice about blowing a hundred dollars on things you don’t need when you start deducting that amount from your grocery money. When you have the basic budgeting down it is time to start adding in some new expenses that might not be in your current budget. Putting money into a savings account monthly or even bi-weekly is one of the easiest things you can do to start creating short-term financial stability. Having an emergency fund can be vital to staying on track financially if you experience a setback. These emergency savings can keep you from going into debt if you end up with unexpected medical bills, home or auto repairs, sudden unemployment, or any of the other stressful surprises that life can throw your way. When I first started my business, I was hardly paying myself because I invested most of my business income back into my studio. Even then, I started by setting aside $50 a month. Later on,  I bumped it up to $100 a month, which wasn’t missed much from each paycheck even though I was only paying myself a small salary.

Setting aside money for your taxes is another crucial part of your budgeting and planning. Whether we are talking about individual or business taxes, it is a wise decision to set the money aside for when they are due. If temptation to spend the money is too great, there are a handful of ways to minimize the temptation. Increasing the amount of taxes that are deducted from your paycheck is the easiest way to have your taxes paid in full at the end of the year or at least get close. Maybe you’ll even get a return! If the money is taken off your check before you even cash it, you won’t have to worry about the money burning a hole in your pocket. This works well for hourly employees and salaried workers alike, and is very easy to setup and update as needed. Since direct deposit can usually be setup to transfer money into multiple accounts, I personally have my salary automatically deposited into two separate accounts. Every two weeks, one account gets half of my mortgage payment and the other account gets the rest of the money. This allows me to always have money set aside for when my mortgage is due. If you’re doing the math, you’ll realize that I am also able to make one additional full mortgage payment a year on this system, which has a very positive impact on my loan principal, especially early in the agreement. Having money automatically transferred into savings, or into an account for taxes, is a great way to avoid the temptation of spending the money. Talk with your accountant about paying quarterly or even monthly if you are not currently required to do so. This is especially helpful for independent contractors and certain business entities that only need to pay their taxes after the end of the calendar year. These smaller and more frequent payments can feel more manageable and attainable to many people.

Eliminating debt is a big aspect of financial success and happiness. Budgeting and planning is the most effective way to start chipping away at debt. You can find a lot of wonderful and manageable tips on eliminating debt through a wide variety of books and programs. On a very minimal salary, I paid off tens of thousands of dollars of debt that I had acquired before I became a business owner. I was also able to use these techniques to improve my financial situation enough to purchase a home less than two years after I opened my business. There are many different approaches and theories for the best way to pay off debt and these techniques alone could be an entire series of articles.

Want quick suggestions? Create projections and plan accordingly. Don’t let your tax burden at the end of the year be a total surprise that results in scrambling to come up with the money. If you are a business owner, you are most likely required to pay taxes quarterly or monthly, as mentioned above. If you are an independent contractor, you should be planning for when you need to pay your taxes. Talk with an accountant, SCORE mentor, tax advisor, or other professional who can help you figure out how to project your estimated taxes and how to measure the projections throughout the year.

The big finale to this article is a very long and daunting subject that would need much more time to cover extensively. Thankfully, you can attend a course at the 22nd annual APP Conference this year on the subject: “Do Piercers get to Retire? Financial Planning 101 for our Industry.” Retirement planning is crucial in an industry that does not have retirement plans offered commonly as a benefit. I hope to see that change in the future and personally have retirement plans for my studio staff written into my ten year business plan. However, until the industry starts offering retirement plans, it is up to each of us individually to plan for our retirement. I encourage you to sit down with a financial advisor and talk with them about how you can get started investing in your future.

There are plenty of resources available to help you come up with a financially successful plan, including a plethora of information on the internet, investing and financial planning classes, countless books and programs, and various business professionals. Talk with friends and colleagues as well, maybe they have some great ideas and insight that you can adapt. It is never too early to start working towards a brighter financial future!