How to Budget on a Budget

You know what's hard about working in the service industry? A lot of things! For real, though, one of the hardest things to do is make a budget. Hell, it's hard to even think about budgeting. When you're a barista or a server, the moment someone brings up finances, the first thought is rent, or debt, or groceries but never savings. I think that's the real issue. It's important to think of all of the places your money needs to go, not just the outward ones. Saving is just as important as paying your bills because it's a huge step in setting up your future self for success. Here are some tips.

The Envelope System

The envelope system is a great way for people in the service industry to start serving themselves. All it takes is a little planning, really. Dave Ramsey has a great explanation of the system, but the gist of it is that you give yourself a stack of envelopes, and label them with different budgeting categories, and you put certain amounts of cash into those envelopes. Then, and this is important, you only pay with cash. That way, your groceries come from your "groceries" envelope, and your rent comes from your "rent" envelope, and whatever isn't allotted to those envelopes goes to your savings. The reason I think this is great for people in service is because it's a better way of organizing your tips than to just put them in your wallet, or a jar, or wherever you keep them. It allows you to use the tip system as a way to set your budget!

You should give it a shot. The biggest step you can take when budgeting is the first one. Sit down for 30 minutes and write out your expenses for the last few months. Come up with an average for each category. Some of these (like rent) will be fixed, but others will vary from month to month. Now, I’m a huge fan of small goals. I’d recommend taking your flexible categories like gas, electric, and groceries and shave 1% from each of them. Say you spent $200 on groceries last month. I want you to spend $198 this month. It’s a small change, but spread that across your categories. Now put that into your savings account. Start there, and then shave 1% off the next month. I call this Monthly Shavings, and it leads to a surprising amount of money put into your savings account at the end of a year. If I told you to save $800-1000 a year, it would sound impossible to many of you. But if you can shave 1% of your spending across a number of categories, then it could happen, but not in year one. That first year would be about acclimation. Dipping your toes into the water. Say that in the last month of 2018 you shaved $65 from your monthly spending. All that I would ask you to do is stick to that. If you can stash $65 a month for 2019, you end up with $715 saved up! That’s a fairly conservative estimate, and some quick math, but you can see how it adds up.

52-Week Savings Plan

Another way you could address this budgeting thing is by using a 52-week plan. The premise of this one is that you cut $1 of spending in the first week followed by an additional dollar in savings each week, so that by week 52 (the end of the year) you’re cutting $52 of spending. But you don’t just end up with $52 in savings, you end up with $1378!

If you decide to go with the 52-week system, and you celebrate Christmas or Hanukkah, I recommend starting in September or October so you aren’t trying to save $52 in December. You can still achieve the same level of savings, but starting it later puts you under less of a crunch when you’re trying to buy gifts for loved ones.


Whatever system you adopt, it’s important to approach it in increments. Hardly anybody achieves great things in one move. You need to take a page from Darren Hardy’s book and let The Compound Effect do its thing!

Additionally, don’t just think about how you can save. Find something to save up for. Spend more time thinking about why you should save.