Getting Financially Healthy In Any Profession with Brandi
Getting Financially Healthy In Any Profession with Brandi
I end every episode with a call out for show topics and ideas, and I love when I get listener requests. As a word of warning, beware of throwing
out a show idea, because you may find out you’re going to be the guest. This very thing happened to today’s guest, Brandi.
Brandi asked me to record an episode that addressed the challenges that she and thousands of others face in the barbering and hairdressing communities. Many of us who sit in their chairs know about their personal lives, but not about how they can manage through their careers and get financially healthy at the same time. Brandi joins me today to discuss her career in this field and how others in it can benefit from some of the hard lessons she’s learned.
What Are We Drinking?
Brandi — Coffee with Vanilla Ice Cream
Shannon — Black Cherry Schweppes
Podcast Notes
Brandi has been listening to the podcast for at least three or four years, and she lives in Florida.
Brandi is dual licensed - she is a cosmetologist and a barber. She got her cosmetologist license first and wasn’t loving working in salons and with color. She loved cutting hair and talking to people, so she went to a barbershop that had stylists and barbers.
She thought it would be a great way to learn about clippers and men’s cuts. Brandi knew how to do the businessman cut (off the ears, off the collar), but she didn’t know how to do fades.
Within the first week of working at the barbershop, she found out if she was willing to go back and get her barber’s license, her employer would pay for half of it.
Every state is a little different, but in Florida, barbers are allowed to use straight razors to do shaves. It is becoming a huge thing. Old school, with the straight razor vibe, is getting pretty popular with hipsters/millennials.
Brandi went to barber school and her employer paid for half and she sweet-talked her parents into paying the other half.
The big, brand name schools run between $20,000 to $30,000. The program takes one year to complete.
Community colleges and private institutions offer programs, and as long as they are licensed by the state, it is the same curriculum and everyone takes the same test at the end. It really doesn’t matter where you go.
Brandi went to a private hair school for her cosmetology license that was locally owned by a man who inherited it from his father, and it cost $6,000 twelve years ago.
For her barber’s license, she went to a school that was $600 for the second part. The first part was 1,200 hours she had to complete, but to get another license, she only had to do another 200 hours. After Brandi graduated, the school raised the price to $1,000.
It is a relatively affordable career change option.
After Brandi got the second license, her income increased $7,000 the next year.
Brandi can do six haircuts in the span of doing one color, which is about three hours. Thirty minutes is enough time to do a full fade and a style for a men’s haircut. Efficiency is key in this field.
Men who are getting really tight, cropped haircuts are coming in every two weeks, because the cuts grow out really fast. Women normally get their hair cut every six to eight weeks.
Brandi does have quite a few women for clients. She worked in a barbershop that didn’t allow chemicals, because they didn’t have a shampoo bowl to wash out color. She stepped away from the cosmetology side for about a year and a half.
Brandi sees mostly women who have a short, cropped cuts, because salons are hesitant to use clippers on a woman for fear of going too short.
A lot of retired women know the secret that most times barbershops are cheaper than salons.
Barbers will cut all short hair, but Brandi has come across some barbers that don’t know how to cut long hair, because they have never worked with women’s styles and layers.
Brandi has easy hair to cut and she uses herself as a guinea pig to teach any barber she works with who is willing to learn.
Brandi has been in this field for 11 years. The last two years is when her finances changed drastically.
There are a few different ways you can work as a barber. For the first nine years, she worked in salons and barbershops under big name corporations/franchises.
When Brandi graduated from cosmetology school, it was 2008, and nobody was going to high end salons anymore. She had friends who were apprenticing at salons, hoping to get a chair, and trying to build their clientele that way. This is a great way to do it, but not in a bust economy like Florida in 2008.
Brandi’s mother is a mortgage underwriter, and Brandi got a front row seat to the crashing economy.
Haircuts are almost recession proof. The franchises were still busy and it was there that Brandi found her footing. She was 18, moved out of her parents house, and she needed to make money. She didn’t have time to slowly build clientele.
Pay at a franchise is commission based. It is pretty similar week in and week out, so it was easy to budget. She was a W2 employee, so she didn’t need to worry about taxes. She had health insurance, paid vacation, and a 50 percent commission. However, after nine years, she didn’t want to give away half of her income.
She liked working for the franchises because the company advertised for her and gave her customers, and if she needed to take a sick day she would still be paid.
Most of those franchises will pay for you to take classes and pay for you to attend. Brandi took a lot of interest in those classes.
There is something to be said about cutting your teeth in corporate America. There are so many skill sets you learn and so many resources they have available. There are a lot of downsides, but you can grow into those challenges.
After a while, Brandi was doing fewer and fewer walk-ins and more appointments and people calling ahead for her. You start to feel that shift.
She was at the same place for a few years, but she was getting to the point where she wanted to control her book more and she wanted to control her schedule.
When you work for a corporate place, your schedule is a lot like retail. Your schedule is their traffic.
Brandi was scared to go out on her own, but she had a couple of bad weeks at work with a manager. She knew if he was going to give her anymore grief, she was going to walk out.
Brandi is a planner and never thought she would ever walk out in the middle of a shift, but she did one day. It was one of the most irresponsible things she ever did, but one of the most liberating feelings she’s ever had.
Brandi went home and started researching barbershops. She wasn’t going to work for a corporate company any more. She had enough customers and they had her phone number.
Nine months prior to walking out, Brandi started collecting customer information. She was becoming unhappy working for a corporation.
Brandi was looking for a barbershop with a community feel. She worked with 16 other people and she wanted a smaller community feel, with others who had their own customers and just wanted to come into work and do their job and go home. She wanted like-minded people who dressed casually.
Brandi talked to three barbershops on the first day she came home. A few days later, she started at a trendy, cool barbershop. She found out a year and a half later that it wasn’t the right spot.
It was a 250 square foot barbershop, three chairs, and she was one of five barbers who worked there.
They had a rotation where they worked ten hours shifts, four days a week.
It was supposed to be that everyone rotated chairs, but since Brandi was the last person hired, she rotated chairs every day.
The experience itself was good, because she was a 1099/independent contractor employee.
She paid a weekly fee for the chair and she kept whatever she made. This is great when you have a steady customer base. You pay that fee even when you go on vacation. She had a lot of freedom but a lot of responsibility too.
Brandi now works for a barbershop in a nice part of Orlando. Her first hair school closed down about five or six years ago and she now works in that building.
There are busy seasons with hair and sometimes it is feast or famine. Brandi has to budget accordingly.
During August and December, back-to-school season and Christmas season, those are her feast months. Summer is typically slow, but she has the same amount of bills.
The typical financial advice of automating her savings doesn’t work for her, because her pay changes every single week.
A lot of freelancer advice pertains to Brandi, but she can’t travel and work in a coffee shop. She is anchored to a building, like a lot of salaried employees.
Roughly 60 to 70 percent of her customers are ones she’s had for five or six years, they are steady, and they are not going anywhere.
This is a big thing the Financial Gym works through with their clients who are freelancing. Since the pay is erratic, best case scenario is that there will be a rollercoaster of pay, even with solid clients. Trainers try to figure out the bottom of the rollercoaster and if there is any kind of predictability, because you need to anchor yourself around the knowns.
Brandi typically budgets off the lowest number. She has always had an evolving relationship with money. She has always been a scrappy budgeter, but whatever was extra, she would spend.
Around age 25, she started thinking she might want to buy a house. She wanted to learn about investing and interest rates, and her credit was really bad. That was when she started learning about budgeting and when she got her first savings account.
Brandi started focusing on saving and making room for that in her budget. She writes everything down and tries to make it match. She has evolved to now having a spreadsheet where she pays the next two weeks’ bills in this two-week period.
Brandi gets paid every single day, but she pretends she gets paid on her boyfriend’s pay schedule, which is every two weeks.
Create a normalized situation of how you pay your bills. Gym trainers that work with freelancers have them set up an account and deposit all earnings. Then they pay themselves a salary based on a schedule.
Brandi buys her health insurance through the Marketplace, which isn’t too terrible, but it can be stressful and confusing to navigate.
She has a few different savings accounts and one she uses for health expenses. She splits that between herself and her dog’s vet bills.
Brandi saved $100 a month for taxes her first year, and when she told her aunt her aunt laughed at her.
The Gym sees a lot of IRS debt when helping clients.
When you are going to be a freelancer, you always have to think about not only making money, but paying the bills. Income + Tax + Gratuity. Add at least 20 percent for taxes and 20 percent for savings.
When you think about making $5,000, you actually need to make $7,200.
Brandi now pays quarterly taxes.
Instead of making a payment plan with the IRS, Brandi put it on a credit card with 15 percent interest and automated that payment. She received points for it and she doesn’t use the card for anything else.
You need to compare how much the interest is from the IRS to a credit card. It is ideal to use a zero percent balance transfer card, but it depends on how much it is and how long it is going to take you to pay off.
Some clients take out personal loans and some pay the IRS directly. It is not a best practice to pay off the IRS with credit and then default on your credit card bill, but at least you have that as a backup, as opposed to defaulting with the IRS. Try to avoid going into a payment plan with the IRS, because you’ll have more flexibility down the road. Once you lock in with the IRS you are set.
For Brandi, it was a hard lesson to learn about taxes.
For trades people (barbers, mechanics, plumbers, electricians, etc.), they learn how to do their jobs in school, but they don’t learn about taxes. Many of these career paths are responsible for paying their own taxes.
If you can’t get your arms around the financial side of it, it can be really challenging. If you are not focused on your credit, you will struggle to get a business loan to start your company.
There are a lot of opportunities for people who work in trades, and if your finances are not in order, you will not be able to take advantage of those opportunities.
Brandi was in her position for seven years before she opened her first savings account. She had to comb through a lot of resources to learn the things she has learned and now it is five years later.
The number one employer at the Gym is self employed. A lot of advice for the self employed is to take their annual income and divide by 12. There is a growing number of freelancers in America and the advice needs to change.
Brandi does not currently have disability insurance. If she broke her hand and couldn’t work, she would be out of luck until her hand healed.
Shannon likes www.policygenius.com for insurance. Shannon gets worried about her hairdresser, because there is a lot of repetition when drying hair and her hairdresser is on her feet all day.
Rotator cuff injuries are common in the hairdressing field. Disability insurance is necessary. Some people in this industry are making six figures and that income is difficult to replace.
Disability insurance is expensive. If life insurance is $30 a month, disability insurance could be up to $200 a month. It is so important for trades people to have disability coverage, because they use their bodies so much.
You don’t need to replace 100 percent of your income. It gets expensive the more you need. It is less expensive if you can wait to collect it. These are the two biggest things when considering different disability policies: how much do you need and how long can you wait to receive it.
Ideally, save up six months of expenses and have your policy start after six months of disability.
If you are making $4,000 a month, you could replace $2,000 a month for it to be more affordable. Try to replace your low number.
Many hairdressers end up with back issues after years in the job.
Brandi is very careful with her body at work. It is all about her long term comfort. She used to wear heels to work, but now she wears more comfortable shoes.
It is easy to forget that you need to pay the chair fee, even if you aren’t using it. When budgeting for vacation, Brandi also factors in the chair fee. She has to pay to go on vacation and she loses income for that time.
It is a good idea to have a self-funded sick pay fund. How much do you make in a day that you will lose if you are sick? Have a reserve fund of five days in case you get sick. When you don’t work, you don’t get paid.
Brandi’s grandfather fully retired when he was 53 years old. She always knew that, but when she was 25 or 26 she started thinking about it more. Two years ago, she talked to him and asked him how he did it.
He didn’t go to college. He broke down how he saved meticulously for retirement, so he could pay his homes off (he has paid three homes off in his lifetime), retire, and travel with her grandmother for half of the year.
Her grandfather saved his money mostly in the stock market. He has a lot of individual stocks and they also started using index funds. When he first started saving, back in the 60s, he could get a basic savings account for 10 percent interest. Save early and save often.
There are different retirement savings options for freelancers and tradespeople. Retiring early should be a goal, especially if your career requires a lot of physical labor. You definitely want to push yourself to be on this path, because your body can only do so much.
This happens by saving and investing in a non-retirement account. Actual retirement accounts limit you on how much you can contribute in a year, like a Roth IRA, but even if you contribute the maximum, it is not going to be enough. You need to find other options.
Brandi follows her grandfathers advice. She has an IRA that she funds, but that is not the only thing she does. Brandi has a few individual stocks, but she doesn’t recommend it, because it is very stressful. In addition, she has index funds. She plans to add some bonds to that as she gets older.
There are so many challenges in her career path and it isn’t talked about much. It is more than just the day-to-day budgeting challenges to have a healthy financial life.
When Brandi first started learning about investing and index funds, she couldn’t stop talking about it. It was a whole new world that she didn’t know existed, and she was mad nobody invited her to it and she had to find it herself.
Not everyone is excited about finding this world.
The number one thing for Shannon, when it comes to tradespeople, is disability coverage and saving to fund sick days. This is a challenge, because tradespeople put their bodies through so much more than most people.
The second concern is long-term retirement planning. There are other options like SEP IRAs and Simple IRAs.
Shannon recommends accounting and tax help for people who are 1099 employees.
Brandi’s grandmother is a CPA and Brandi asks her a lot of questions, but her grandmother has been retired for a while now.
Brandi recommends spending the money to go to a CPA, because you can write off the expense and because they are the experts.
There are a lot of things you need to know to manage your financial health if you are a tradesperson. There is a large amount of money to be made in this career path, but you need to make smart financial choices.
Taking care of your financial health sooner rather than later will save you a lot of headaches down the road.
TAKEAWAY: No matter your career, you never know where it will take you. A solid financial life, where you have savings and a good credit score, will open doors to just about any new direction you want your career to take. It’s never to late to get your finances in order.
Random Three Questions
What is the next vacation you would like to take?
What is a show you like to binge watch?
What is a food you didn’t like as a child and do you like it as an adult?
If you’d like to talk to my team at the Financial Gym to help you prepare, at least financially, for the next chapter in your life, I hope you’ll reach out to us. We work with clients from all industries and all salary and lifestyle types so we can make your plan as personalized as you’d like it to be. The great news is that Martinis and Your Money listeners get 15% off Financial Gym services. So head over to, or send friends to, financialgym.com to get signed up today.