Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host Britt Seva and I’m really excited about this week’s topics. I always love everything I record for the podcast. If I don’t love it, I don’t do it. But this is one where I was like, “Ooh, I can’t wait to sit down and record this one.”
I love talking about money. I love it. I also love helping stylists to own the fact that we got into this industry to make money. This is your profession, this is your career. This is how you provide for your family. This is how you live your biggest, best life.
I don’t by any means think money is everything. If you look at how I live my personal life, I’m actually quite frugal. But when I look at what money does for people, to me, money is a vehicle. Money is what creates opportunity. It’s the golden ticket, right? And for us to have things like financial peace of mind and all of the blessings in life—vacations with our family, memories with our children, all that kind of stuff—money is what makes that possible.
In case you’re new to the show, we talk about money around here like it’s a good thing, not a bad thing. I also talk about the fact that yes, we are in a service-based industry and yes, we should make our clients feel good, but we shouldn’t be sacrificing our own joy and our own lifestyle and our own fulfillment to make others happy. If we were looking at that in any other relationship, it would be called somebody who has bad boundaries, like somebody’s a human doormat. We allow our clients to sometimes take advantage of us and it hinders our financial growth. This is the year I want to let all that go.
I want to talk about how to maximize your growth in any given year.
One of the quotes that I love is “We overestimate how much we can do in a day and we underestimate how much we can do in a year.” You can truly change your whole life in one year. It’s amazing what any of us can do in 365 days. I think often we sell ourselves short at the onset. We think like we’re not capable or “I got going a lot going on in life this year, so amazing things aren’t going to happen for me.” Amazing things are always possible. Generally speaking, any of us are two or three simple shifts away from having everything we ever wanted. If we can be intentional with our time and our goals and our financial guidelines, you can accomplish so much in just one year. That’s what this is going to be all about.
I’m going to get into the how-tos, but I want to anchor this around some facts and some thoughts so that you understand where I’m coming from with some of these growth ratios. I’m going to give you—with some of these guidelines I’m going to share.
CNN reported that more than 2,500 US adults said they would need to earn on average $233,000 a year to feel financially secure and $483,000 a year to feel rich or attain financial freedom. That’s according to a new survey from Bankrate as reported by CNN.
That is so wild that 2,500 adults today are seeing they need to make half a million dollars a year to attain financial freedom. That is such a huge amount of money. For a lot of us, we look at that and we’re like, “That’s not even on the table.” To be making half a million dollars a year, yeah, you would definitely be well off and wealthy, but it bothers me that that’s the number to feel financial freedom.
When I look at the term financial freedom—and I want you to put your own definition to it. To me, I started feeling financially free when I could go to the grocery store and buy whatever groceries we needed without worrying about my card being declined. To me, just the ability to do that felt financially free.
I felt financially free when I felt like, “Okay, we’re setting aside a reasonable amount of money every month to one day be able to retire.” That to me felt free.
Now your definition of financially free might be different. Oh, also getting out of debt. Huge thing for me in feeling financially free. But you might be more in the class where you’re like, “No, financially free to me is I want to be able to drive a brand new car. I want to lease a vehicle every year. I want to own a vacation home. I want to travel to exotic places.” That’s incredible.
I want you to really think to yourself like what is your definition of financial freedom?
I thought it was interesting that the average US adult in this survey said they needed to make $233,000 a year to feel financially secure. That’s a lot of money and it’s a lot of money especially when you think about the fact that the median earnings for a full-time year-round worker—so employee or self-employed person—in 2021 was $56,000 according to the US Census Bureau. The median earnings are less than 25% of what people are reporting that they would need just to feel financially secure.
Now take that to the beauty industry and the US Census Bureau reports that in our industry in the beauty sector, the average annual income is $38,910 or $18.71 an hour.
Now a lot of you are like, “Well, that’s extremely low.” A lot of people are six-figure earners. Don’t be delusional in that. I do believe this is the average. I know that there are six-figure earners in the industry. I’ve met a lot of multi six figure earners in the industry. Those are the standouts. That’s who’s talking about it.
You don’t see people on Instagram who are like, “I made $24,000 last year.” No one’s telling that story, so yeah, we hear the stories about you can make a hundred thousand, you can make 200,000, and listen, I coach people who are doing it all the time, but I do believe that the average income in our industry is $38,000. I believe in that fact wholeheartedly.
And when we say things like, “Well, that’s because a lot of people don’t claim their cash tips,” but, friends, even if people were being tipped 100% or even if half a person’s clientele were paying in cash, which I don’t believe either of those things are true, you would still not bring the average annual earnings of a stylist up to even 56,000. I don’t believe the average stylist is taking home $25,000 a year in cash.
When we look at these stats and figures, it just shows it’s a real come back home, come back center of call to action for all of us. How far off are we in achieving financial peace of mind? How far off are we in being truly financially secure? 72% percent of respondents in this same survey said they did not feel currently financially secure.
If you’re part of the 72% of adults today who doesn’t feel financially secure, you’re not alone. This is about making a plan to overcome that.
When I talk about growth, for me, I coach to a very specific set of numbers and I want to explain why. Something I don’t think a lot of stylists, beauty professionals, entrepreneurs, salon owners, business owners, employees, whatever, people in general don’t think about is cost of living and inflation and the economy and what that does for all of us.
Whenever I’m coaching, a lot of times stylists will say to me, “I’m comfortable where I’m at.” Even if you’re comfortable where you’re at, you need to be financially growing every single year and not by a little bit. By a fairly significant amount.
Let’s talk about why.
I’m recording this podcast in the United States. In the US, we have something called the COLA, which is a cost of living adjustment. This is something that’s determined by the federal government every single year, whether you’re reading up on it or not. But the federal government looks at what’s going on in the country and says, “Okay, we need to implement a cost of living adjustment,” and it happens every single year. That COLA or that cost of living adjustment to me is an indicator of how much everybody’s income needs to increase simply to sustain. Not to improve their lifestyle at all, to stay in the same amount of debt, to have the same amount of overhead, to not change the way they drive, not change the car they drive, not change how they spend their money. Literally nothing changes. This is how much additional income you need every single year for your life to stay the same. In 2023, you need to have earned an additional 8.7% in income for your life to stay the same.
If you did not increase your income last year by 8.7%, data shows your lifestyle will likely decrease this year. Debt will mount, it will be a little harder to pay the bills, you won’t have extra funds for vacation. That’s just what the data shows.
Now in 2024, that COLA adjustment is 3.2%, so down from 8.7, cut actually like in half. This adjustment was made because inflation is cooling, which a lot of us are like, “It’s such a good thing for the economy.”
I mean it’s a good thing and bad thing. As inflation is cooling. We’re also seeing mass layoffs and there’s all the things that go along with that, so you get both sides of the coin on that one.
I want to break this down into real numbers. If in 2022 you had made $50,000, with this COLA increase, you would’ve needed to have made at least $54,000 in 2023 simply to sustain your lifestyle. Nothing gets any better and then this year you’ll need to make at least $56,000 simply to sustain. So if you’re at the $50,000 price bracket and your income is not increasing by $1,500 a month, your lifestyle is actively decreasing.
Whether you’ve looked at it that way currently or not, that is the facts and the reality of what’s happened. The reason I wanted to start with this is because I’m going to talk about how to make sure that you’re growing and outpacing inflation and lifestyle increase and all this stuff. But you need to understand that this is not just some weird and wacky idea. This is the truth of what’s happening.
What I want to do in this podcast is determine what your comfort rate is. I like to work backwards to figure this out. For a lot of us, we look at how much money is coming in and then we try to cram our life into that number.
I like to do it opposite. I like to look at the number that would need to exist for my lifestyle to feel comfortable and then figure out a plan to make that happen. I like to call that the comfort rate and that’s what I want you to do too.
Before we do that, a lot of us are like, “If I made a hundred thousand dollars, I’d be comfortable.” A hundred thousand dollars is an arbitrary number and for a lot of you, yes, it would change your life. For a lot of you, it’s way more money than you’d even need. You’re shooting for this figure that yeah, no one’s going to turn down a hundred grand, but for some of you, honestly your comfort rate’s like 60,000. Don’t let that a hundred thousand be this monster that keeps you up at night. Let’s figure out what your number actually is.
Step one, what I like to do is look at what economists, financial strategists, et cetera suggest that our personal income spend looks like. Now, I leaned into nerdwallet.com to go through this exercise we’re about to dive into right now. The reason why I like to use resources like NerdWallet or really any other financial advisory website is because it gives us a good framework from which to determine our lifestyle. These are the NerdWallet percentage breakdowns, but honestly if you look up any advisory site, they’re right around the same. I chose these ones ’cause they’re super clean and I think for an audio education source, like a podcast, it makes it easy.
NerdWallet likes the 50/30/20 budget and the 50/30/20 is that 50% of your net income, meaning the money that you take home after taxes, okay, your net income 50% should go to your needs, 30% should go to your wants, and 20% should go to your planning.
Let’s look at what each of them are. Needs would be the cost of living. When we think of cost of living, it’s going to be your housing payment, whether it be a rent or a mortgage or whatever. Food, we need food, we need water, utilities, insurance. In most states it’s illegal to be uninsured. When we think about gas for our vehicle and or some form of transportation, so if you have a car and you put gas into it. If you take the bus, bus fare, all that stuff.
Then I actually put cell phone in under a need. I think a lot of us as adults today would struggle without one.
Now beyond that, your needs list starts to become a little bit more subjective. For some of us, we’re like, “I need Netflix. I would not get through my day without it.” For me, if I was on hard times, Netflix would be one of the first things to go. But for some people, like “No, no, no. That’s how I decompress. That’s how I unwind.” Okay, so the Netflix might go into your needs, I don’t know. That’s where you make those subjective decisions.
But when we look at the 50%, to me, it’s cost of living, which is house, food, utilities, insurance, transportation, cell phone. That’s should be 50% of your take-home pay.
Then we have the wants. Wants are things like vacations and entertainment. Now, I really want all of you to have a vacation. I want all of you to buy a new pair of running shoes when that feels good to you. Is it critical? I mean it’s arguable and this is where the wants get tricky.
For a lot of us, you’re like “For my mental health, yes, I like retail therapy or I need to travel. It’s good for my soul,” I understand. But 50% is survival, really basic human needs. 30% is wants.
For me, when I look at wants, it is things like travel and vacation entertainment. Whether that be streaming services, going to concerts, going to movies, going to theme parks, I don’t know what you do for entertainment, but all of those things would be wants.
To me, wants are also kids’ activities. I always talk about how my kids are both extremely involved in sports. My daughter’s now an adult, but she was an active travel softball player. That was not cheap and we made a lot of personal sacrifices to make that happen for her. My son now plays baseball, football, basketball. He does freaking everything and so it’s a lot. Now, if we fell on hard times, might he have to sacrifice some of those things? Absolutely. That’s where it comes to wants, okay?
Think about the things that’s you want this in your life, it’s important to you, it makes you proud but maybe it’s not critical. That’s going to be 30%.
Then 20% is planning. Planning would be debt repayment, savings, retirement, like things to really give you that financial peace of mind. To me, that last 20% is really where the financial freedom, the financial peace of mind really kicks in ’cause it’s the “Okay, we’re not in trouble any more,” piece.
50 is the needs, 30 is the wants, 20 is the planning.
Let’s look at this play out with real money for a second. What I want you to do is sit down and make a list.
Let’s start with the needs list. What is your monthly cost of living, whether it be rent or mortgage? How much are your utilities every single month? Actually look at it. Don’t just guess and make it up. Really look at it. How much are you paying for gas? How much are you paying for all your insurances that you have? Transportation as a whole, your cell phone, and anything else that to you is in need. Maybe you have medical costs every single month. Add that into it. What are the things that are really critical needs? Start with that. Add them up.
Don’t try and cram those into how much you make. Add them up your current spend.
Let’s say that when you add all those things up, they total $4,000 a month. Okay? That means you’re spending $48,000 a year on true essentials or needs. Based on that number, you will need to have another $48,000 a year to cover the wants and the planning. That puts you at a $96,000 comfort rate. Does this make sense?
What I like to do is just add up all the needs and let that be the baseline for the 50% and then we double it. That doubling is what provides for the wants and the planning.
Now when I’ve done this exercise with people before, it’s been like an “oh shit” moment because people realize that quite often their needs are taking up more like 80% of their current take-home pay. Then they’ve somehow got to figure out how to allocate for the wants and how to figure out how to allocate for the planning. What usually happens is we don’t do the planning, right? We barely pay off our credit cards. Savings is a pipe dream. We’re not planning for retirement and then the wants, we put on the credit card ’cause we don’t have the money for it, but we still want to take a vacation, we still want to buy a new shirt. Then that all creates the debt and it ends up being a cycle.
What I want you to do, add up that big needs list and that becomes 50% of your comfort goal. You double it and it becomes the new financial goal that you hold yourself to.
What I want you to do is do that math and then ask yourself, are you there or not? If you’re not, your goal is to get to that number this year. If that number means you need to triple your income, I have one million resources in my program Thrivers Society to help you do that. We have countless stories, head to thrivingstylist.com/thriverssociety, countless stories of people who have gone from no money to, no exaggeration, $100,000 in income in one year. People who have doubled their income in a year, tripled their income in a year. It is possible for you whether you live in a big city or a teeny tiny town. It is possible.
The reason I share that is not a flex. It’s for you to understand that there is truly the only thing holding you back from making that number you’re going to calculate right now is yourself, your belief in yourself, your limiting beliefs, your education right now maybe.
And if you knew the systems and structure to make it happen, it would happen for yourself truly in one year.
Now, let’s say you’ve done the math and you have found that actually you’re already making more than that comfort rate. Amazing. Now what you’re going to do is you’re going to shoot for your freedom number.
A freedom number is something that we calculate using one of our Thrivers Society calculators and it’s an aspirational number and we break it down into one, three and five-year goals with tangibles and how you’re going to do it and all that stuff. It’s cool, it’s a tool that you plug in a couple of real numbers about your business, like three or four numbers, and it’s going to tell you okay, great, based on what you’ve put in here, you should actually be able to push and make this much this year, this much in three years, and this much in five years.
The five-year number will blow your mind and it makes you really realize in real time, there’re only a few shifts away from truly having everything.
What we do is we take that freedom number and we turn it into a day rate. Listen, if you are not at the freedom number place, take your comfort rate number, that’s totally fine. You’re going to take either your comfort rate number or your freedom number and break it down into a day rate.
Let’s say that you determined by doing all of this math that you’ve really got to bring home $50,000 this year. That’s your comfort rate or that’s your freedom rate or whatever. Perfect. For me, what I immediately do is I double it because we want that $50K to be net income. On average, a stylist spends 50% or more to create that net income.
There’s a belief in the industry that if you booth rent, you take home a ton more cash. Now I will say once you become a six-figure stylist and definitely a multi six-figure stylist, depending on how your salon owner does commissions, there is a chance you’ll make more money than that.
If you’re not yet making a hundred thousand dollars as a stylist, the odds of you going out on your own and making more net income are fairly slim to none. Keep that in mind. But I like to use 50% as a net income as a good guideline. For some of you it’s less. For few of you it’s more. So 50 percent’s a good guideline.
Let’s say you determine you’ve got to bring home 50 grand this year. To me, that breaks down to about a hundred thousand dollars in services that you need to pull off. There’s 52 working weeks in a year. When you live in my world, we calculate 50 working weeks a year. I want you to take at least two weeks off. For some of you, you’re like, “Oh, I don’t take vacation like that.” Okay, but you’re a human so you’re bound to get sick every once in a while. You take a little three-day weekend or whatever. If we’re being honest, most of us work close to about 50 weeks a year.
We run the math on that. Assuming that you do 50 weeks a year, if you work three days a week, what we do is we take those three days a week that you work and then we times it by 50 because you’re working three days a week, 50 weeks a year. That gives us the number of 150, right?
What we would do is take that a hundred K in services that we determine you need to make. If you want the take-home to be 50, the services have to be 100. We’ve done the math and it works out that you’re working about 150 days this year. We take $100K divided by the 150 working days, you need to make $670 a day behind your chair in order to make that freedom or that comfort number.
Now, let’s imagine that you work four days a week behind the chair, okay? We’re still going to assume that you’re working 50 weeks in the year. We take the four days a week time, the 50 weeks in the year, that gives us 200. We take the hundred thousand dollars, it’s our service dollar goal for the year, and we do a hundred thousand divided by 200, the amount of days you’re going to work. That means you need to do $500 a day in services in order to make your financial goal possible.
Now, what I love about this exercise is a lot of you will find that maybe you’re averaging doing $400 service days a year and you’re like, “I’m never going to make a hundred thousand dollars.” Then you’re like, “Oh, shoot, if I just increase my services per day by a hundred bucks, I’ll make a hundred thousand dollars this year.” A lot of you are truly a small shift like that away from making a huge income leap. That’s what I wanted this episode to be about.
This week’s episode and last week’s episode, we’re deeply about becoming aware of your money, becoming aware of your metrics, and realizing you are so much closer to your financial goals than you ever thought that you were.
If you love this episode, I would love it so much if you leave me a rating or review on iTunes or Spotify, share this episode on your Instagram stories, hit me up in the DMs. I get most of my podcast inspiration from your ratings and reviews. Keep them coming so I can keep the shows coming your way and coming in hot.
As I always like to say, so much love, happy business building, and I’ll see you on the next one.
