Episode 13: The 5 Steps to Take Control of Your Budget

Introduction

Host Intro:

I’m thrilled to kick off our January budgeting series. This month, we’re diving into all things money management for stylists and salon owners. Today’s episode is all about the five steps to take control of your budget. Whether you’re feeling overwhelmed or just looking for a reset, this episode will give you actionable steps to get started. So grab a notebook or just sit back and listen—I’ve got you covered. Let’s dive in!

Step 1: Separate Personal and Business Finances

This first step is critical: separating your personal and business finances. If you’re still mixing these together, it’s time to stop. Open a business bank account if you don’t already have one, and make sure you’re using separate credit cards for personal and business expenses. Why is this so important? Because when everything is mixed, it’s almost impossible to know how your business is really performing. Plus, come tax season, you’ll save yourself a ton of stress by having everything organized.

This doesn’t have to be complicated. Start small. Transfer a set amount from your business account to your personal account each month as your salary. This keeps things clean and helps you budget personally as well.

Step 2: Understand Your Starting Point

The next step to taking control of your budget is understanding where you’re starting from. Before you can set goals or make changes, you need to have a clear picture of your current financial situation. This means gathering all your financial data. Take a look at your income sources—service revenue, retail sales, tips, maybe even side gigs like teaching classes or consulting. Write these down so you know exactly how much money is coming in each month.

Next, list out all your expenses. Start with the big ones like rent or booth fees, supplies, and insurance. Don’t forget smaller costs like subscriptions for software or marketing expenses. Be honest with yourself. The goal here is to know exactly what you’re working with, so don’t leave anything out.

Finally, break these expenses into two categories: recurring and one-time. This will help you see patterns and prepare for big-ticket items that don’t come up every month. Once you have this information, you’ll have a much clearer idea of where your money is going.

Step 3: Prioritize Essential Expenses

Step three is all about prioritizing your expenses. Take a hard look at your list from step one and categorize everything into three groups: ‘must-haves,’ ‘nice-to-haves,’ and ‘cuttable.’ For example, rent and supplies are must-haves. A subscription to a fancy magazine? That might be cuttable.

The goal here is to ensure that your essential expenses are always covered and to identify areas where you might be overspending. Maybe you’ve been paying for a tool or software you’re not even using. Or perhaps there’s a way to negotiate lower costs on certain items. These little adjustments can add up to big savings.

Step 4: Set Achievable Financial Goals

Now that you’ve cleaned up your finances, it’s time to set some goals. And not just any goals—SMART goals. That stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Let’s say you want to save $1,000 for a new piece of equipment. Break that down. If you give yourself six months, that’s about $167 a month. Suddenly, it feels much more doable, right?

You can apply this to all kinds of goals: paying off debt, building an emergency fund, or even saving for a dream vacation. The key is to assign timelines and make these goals part of your budget.

Step 5: Build a Tracking System

Finally, step five is building a system to track your progress. This can be as simple or as fancy as you want. Maybe it’s a bookkeeping app like QuickBooks or Wave. Maybe it’s a spreadsheet or even a notebook. Whatever you choose, the important thing is consistency.

Set reminders to review your finances weekly and monthly. Use these check-ins to track your income, see if you’re staying within your budget, and make adjustments as needed. Consistency is what turns budgeting into a habit.

Wrap-Up

So there you have it: the five steps to take control of your budget. Let’s recap. First, separate your personal and business finances.  Second, understand your starting point. Third, prioritize your expenses. Fourth, set achievable goals. And fifth, build a tracking system. These steps might feel overwhelming at first, but remember: progress, not perfection.

Before we go, I have a free basic tracking guide for you to download. It’ll guide you through these steps and help you take action right away. Check the link in the show notes to grab your copy. And if you found this episode helpful, share it with a fellow stylist who might need it.

Thanks for tuning in to the Hair Hustle Podcast. Don’t forget to subscribe so you don’t miss next week’s episode, where we’ll talk about three tools to simplify expense tracking. Until then, take care and keep hustling!

Link to Take Control of your Money Guidelines HERE

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