196. Financially Educating the Service Industry with Barbara Sloan

Hey, welcome back to the Average Joe Finances Podcast.I'm your host, Mike Cavaggioni,and today's guest is Barbara Sloan.So Barbara, thank you so much for joining me today.

Mike, thank you so much for having me on.I'm excited to chat.

Absolutely.Hey this episode's gonna be a little bit different for what we're talking about.It's not gonna be specifically like down the real estate rabbit hole.We're gonna talk about different ways people are making money in the service industry particularly people that, that survive off of getting tipped, right?Getting tipping.And you wrote a book about that.So I'm pretty excited, but we're gonna talk about that a little bit too.But I wanna start this off so the audience can get to know you a little bit better.This is the way we start every episode, right?So we wanna get to know you.So Barbara, if you could tell us a little bit about yourself, go into your background, share your story.Who is Barbara Sloan?

Yeah, so most people who meet me today know me as somebody who owns a women owned and operated high-end construction company in the heart of Manhattan.What they don't know is that I spent two decades working sometimes in tandem,but sometimes instead of in the service industry, I like to say I worked a little dirt in the day and dirty in the evening.So 20 years both in construction and in the service industry.And when I say the service industry,for the most part, my experience was in bars, restaurants, and clubs.So I was a bartender, a go-go dancer,a stripper, a fetish performer,a sideshow, showgirl, a circus performer, a flair bartender.A pole dancer, a cater waiter, you name it.If it involved tips, I did it and I did it all over the country.

Wow.Wow.That's awesome.Quite a bit experience there in the surface industry as well.So every different facet of it.I like how you describe the, getting getting in the dirt in the morning and getting dirty in the evening.That's pretty funny.Okay.Awesome.Let's get into this and talk about,Why this is the route that you went.And that is something, that I'm curious about and probably the audiences as well is, when did you start in this industry and was it something that or actually when did you start and why did you start in this specific industry?

I would say my first exposure to tipping and kind of a service industry job was probably at 10.I was a paper girl, and so I had a couple of blocks.I lived in a suburb outside of Detroit and I would just sling a bunch of papers over my back and I worked a couple blocks and I remember around the holidays getting thrown like some singles and$5 and at 10, that was huge money.I felt super rich.I loved it.Then in high school I mean I had three jobs.One of them was working at an A&W, which I'm not sure if people know, but it's like a car hop style, roller skating,waitress serving hot dogs and root beer.I was in the Midwest.And so I did some stuff during high school, and then when I was20, I moved out to California.And that's really where I started full-time in the service industry.And I started by like responding to Craigslist ads for anything that paid cash.And so this started with some really random side gigs, some catering gigs and it went from there.I fell in love with the industry.I liked the schedule flexibility.I liked going to the beach on a random Tuesday.I liked the quick access to cash.I loved the camaraderie of the girls.I'm also queer and so one of the things I loved about the service industry was that I like, it's like the one industry where you're celebrated to be yourself and a little bit extra.And so I love that I got to be exactly who I was at all times, and I just,I've always had that like entertainment side to me where I like to raise the energy of wherever I am, whether it's a bar or a house party or a club.And yeah, I just, I really connected with.The work, I found a real art and craft to it, and it just, it really worked for me.

Okay, fantastic.I appreciate that answer.One of the things we had some topics that we were gonna discuss today, and one of'em is how service industry professionals are left out of wealth building.So can you talk to me a little bit about that?Why do you think that service industry professionals are left out when it comes to wealth building and just being able to build up passive income and things like that?

Yeah, so I'll say the one of the first aha moments came to me in 2013.I moved to New York City with my wife.We had 700 bucks in our pocket, and I got two jobs.I got one job working at Coyote Ugly,which I'm not sure if people know the movie, but basically you sing and dance on the bar, you beat your patrons,you get girls to take their bra's off.It's a saucy, fun time.And then I was working days on Wall Street for an unregulated market, so it was part trading floor, part independent sales organization, loan sharking essentially.And so after a couple months of seeing some really horrible stuff and our third trader getting shipped off rehab, I was like, I cannot do financial services.This is way too toxic.I'm going back to bars and construction.So I got a job at a construction company.It's actually the construction company that I now own.And I was employee number three or four.And I was hired to do finance and accounting, but I was also hired to do HR.I had never had HR before, so I had no idea what they did.I had no idea what a 401k was, a pay time off policy, FSA, I had maybe had health insurance once before.And so I was researching all of these benefits and all of these safety nets.And then on the other side of the equation, I was working for these really high net worth individuals,talking to them about their biggest budget items, talking to them about how they viewed money, the trade-offs that they were making, and it was in scene.Both those systems and safety nets and the mindset of the people that I was working with, and I was like,oh, these are the reasons that my peers and I have not built wealth.It's these systems.Wow.So then I started deep diving, personal finance content, and in 2016, we all know what was happening in the country.It was a little bit of a nightmare.I did a media blackout and I only listened to the sweet soothing sounds of personal finance podcasts and audiobooks and year after year podcast after podcast book,I never saw or heard anyone like me.And so it was just in that moment where I was like, nobody is talking to these people.Nobody is talking to people like me where.

Like a whole untapped community, right?

Yeah.There's more than 5.5 million people working on tips in the us.It is the second largest employment sector in the United States.And so to see that we were left out of the financial conversation, we're left out of the most basic of employer benefits.And then the only time we do see financial services is in this really predatory way.It's just somebody's gotta do something.Somebody needs to start talking to these people.

Yeah.No that's great.So again, you were able to recluse yourself, during that timeframe and just cut everything else off and focus on.Your personal finances right by listening to all these different podcasts, I'm sure you were watching YouTube channels as well, but the whole time you're doing this, there was nobody that resonated with you for who you were, right?

Yeah.

Yes.Some of the advice might be great.Yes, sure.I could do this with my money.I could do that with my money,but do you really know me?Do you do, can we really connect on that level to where I feel comfortable,you know that this is gonna be a good move for me to do with my money.

Yeah.

So yeah,there's a whole untapped industry of people that are not getting that financial education because, Most of the time it caters to somebody that's on salary or has set hours.They know what their income is, right?Whereas in the service industry, your income is going to fluctuate all the time.

Yeah.

You can have one really great week where you make a but ton of money and the next week you could be a zero.You can go from zero to hero and here zero.Just like that.

Yeah, there's a lot of unique hazards and a lot of unique opportunities in the industry.And yeah, all of the classically shouted personal finance advice, get the 401K match, negotiate your salary budget based off of your income.None of it applied.Our financial lives look completely different.We need specialized advice.

Yeah that's interesting too cuz e even, my podcast too the who we cater to, the Average Joe and the Average Jane, usually blue collar workers that are trying to get out of the rat race and beat debt.I too am guilty of not contributing towards the service industry.So I'm glad we're having this conversation cuz this will give some other people,something to resonate with, right?That there is a way for you to do this, right?And, go follow Barbara, right?Go check out her stuff.Absolutely.But yeah, no, this is very interesting stuff because, there are the.When you think about personal finances and financial education,just in general, right?There are so many people that are left out and there are so many people that just don't get touched or reached.By anybody else.So I'm hoping that this can reach an audience that may not have been touched by this podcast before.That may not have felt they had a voice or anything like that.So it's great for everybody to have someone they can relate to and feel like,Hey I can see myself in this person.

Yeah.I think we all learned a look up story.Yeah.

Absolutely.

Totally.

Yeah.Okay let's go a little bit into it then and talk about, what that looks like, the financial life of somebody in the service industry, right?I had mentioned how, you go from zero to hero and hero to zero, right?You have this fluctuating income.So how does somebody that is.In that particular industry able to,make themselves a proper spending plan or budget to make life a little bit easier for themselves and to maybe start building that nest egg for the future, for retirement.

Yeah, budgeting is one of my favorite things to talk about because it's just one of the things that is needed the most for people on a fluctuating income, and I don't even start with budgeting.The first thing we start with is tracking your income.For people who live on a fluctuating income, they're often not tracking it and.People can vilify them and say, oh why not?But for the most part, most people aren't tracking their expenses.So when you think about how easy it is to not itemize each of your transactions on the expense side, that's how easy it is for somebody who's operating off fluctuating income, not to track all of these random dollars that are coming in.So the first thing we start to talk about is the income side of the equation, because it's really important to track your income.When you start tracking your income, you will see trends.Every single industry has trends.I'm married to somebody who does corporate finance for a living, and we nerd out on this money stuff all the time.And I always say that people in the service industry, you are, you're an entrepreneur, you are running your own little business, and having a fluctuating income in the service industry is very similar to owning a business.You're never gonna have the same two months of income ever, and so you have to act like a business.And what do businesses do?They look for trends.They set targets.And then they look back to see if they hit those targets and where they need to make adjustments.And when you're operating on a fluctuating income, you need to do the exact same thing and you need to look at it at a micro level.So you're gonna start by tracking your income.You're gonna look for those trends.If you're in the service industry, if you're in a club environment, when I was dancing, summers are really slow.Sporting events are really slow.If you're a waitress or a bartender who has access to a section on a patio, your summers are gonna be busy.Holidays are gonna be another busy season.And so when you start to see those trends, In your establishment or in your area or in your industry, then you can start to make a plan with that income.And that can look like building in buffers, saving up for things like your p t o.Like one of my favorite things to talk about for people who are part of that big December income push with the holidays is set aside a thousand extra dollars in December and break it up into 10 envelopes of a hundred bucks.There you go.That's 10 paid days off for you.Next year.Most Americans have an average of 20 paid days off every year.That's like a working month.Can you imagine if you didn't have any of those days, how easy it would be for you to burn out or not take care of your health or your dentist or maintenance on your home or all of these other things because you don't have access to paid time off.And even if you're in a state where.You're required to give paid time off.You don't actually see it if you're in the service industry because people who work in the service industry are held to a totally different sub minimum wage, which is $2 and 13 cents an hour.So if you have a paid day off,we're talking eight hours times two 13, which is like 17 bucks.And then we're also saying the portion of your tips are claimed automatically throughout that week.Taxes, eat that $17.And cash flow wise, you never experience a paid day off.And so that's just not a reality for people in this industry is paid time off, but you have to build it yourself,and that's one of the ways that I like to do is like when you find those trends of when you have access or more income coming in, you can start to put some of these systems in place, like a paid time off policy, maybe some insurances, maybe we can start talking about retirement planning and investing.So tracking your income is the most important piece for planning.The other reason that tracking your income's really important is because.Your income is what qualifies you for benefits.So something like unemployment, like when Covid happened, people in the service industry, the only reason they received any money if they weren't claiming their tips was because of the booster.The other thing that is the biggest financial safety net in the United States, Social Security.So Social Security was created because people were falling between the cracks of a 401k and pension.And the only people that still fall through that crack are people who work in the service industry because oftentimes they're not tracking their income, which means that they're not claiming their income, which means that they aren't on the receiving end of that partial income replacement plan.

They're not,contributing at that point because it's not, while they are like the, whatever,this minimum that comes out of that$2 and 13 cents per hour, but that is not gonna be something that's livable.In your sixties and seventies, it's just not

And so part of the research when I was writing my book,was digging into the economics of the people who are in this industry.And I found that currently retired service industry professionals rely solely on social security, which is terrifying when you think about the fact that the average social security payout in 2020 was less than $20,000.And that's for people who claim their income in full.So if you can't imagine living off of$10,000 a year, you're in real trouble.So claiming that and tracking your income is a big part of the beginning conversation.And then we can get more into budgeting as well.And how you can do that.But to me, a big part of the conversation has to be focused on income.

Yeah, no,definitely appreciate that, Barbara.Cuz, the more you were talking,I was sitting here taking some notes and thinking about.Thinking about it, one of the biggest things that we talk about when it comes to building up a budget or a spending plan is, itemizing those expenses.Where, in the service industry, you also have to itemize that income.Because it's never gonna be the same.And I like how you were talking about, treat it like a business, set these targets.This is how much you wanna make this month, this is how much you wanna have.That's, spending this is how much you wanna have put to the side for your expenses and et cetera, et cetera.And then also another piece of that too is, building up that emergency fund.You were talking about how not even just an emergency fund, but also like a paid time off, right?You're like, Hey, you take this, Extra,what, a thousand dollars and break it up into an envelope, 10 different envelopes,that's 10 days off right there, right?If you're making averaging a hundred dollars a day.So that's super important.If, when you think about it, because you're right, you're like, you're not gonna get that paid time off.Cuz if you do, you're getting what, the eight hours of what?16 bucks, right?And then, it's getting tax anyway, and it's, what does that even do for you, right?Because those days that you take off, you're not getting tips, you're not getting anything else, right?So it's not like that comes with it.So you have to fend for yourself.But the thing is, there is a lot of lucrative opportunity for people in the service industry as well, I think personally.Because when you have those bigger days of bigger income because you had really great tips or anything like that, or during your busy season, that's more money that you can put away or put into something that will continuously pay you like real estate or other investments that will pay you or even something that you wanna hold onto into the future and eventually sell different securities and things like that.So what would you say for somebody that's Hey, I wanna stay in the service industry.My entire life, I love it.I love entertaining, I love, being a host or hostess, and this is what I wanna do cause this is my passion and I want to do this until I'm able to comfortably retire.What would you say to somebody like that's, that's the route they want to go?How would they get there?

Yeah.I love this question because during the research for the book and everything, the.Only time I came across peop.I interviewed tons, hundreds of sips,and the only time I talked to people who had sought out financial advice.The advice that they received was to get out of the industry.And I'm just like, that is terrible advice.We are taking people who are this close to finally getting some good advice that they can model and take back and share with their peers, and we're shipping them up to other industries without exploring.Environmental controls, financial systems, or other things that they can implement prior to abandoning a career they may enjoy.So I love that you're asking this because it's totally possible to have a career in this industry and to retire comfortably.The first thing I always like to talk about, to give people hope, is that when you're a lower earner, Need to save and invest for a six figure retirement.People who are earning and spending six figures, they have more that they have to save because they're compensating for a bigger lifestyle.If you're a lower middle income earner,it is just as easy for you to set up a low to middle income retirement for yourself because you don't have to try to replicate six figures.That's not the lifestyle that you're living.And so in some ways I like to point that out because I think that makes people feel like there's a little bit of a level playing field and there's hope for them.I think in the personal finance space, we all love that $40,000 a year janitor that retired on the East coast and he ended up with $8 million in his bank account or something.Cuz he's just another example of it's totally possible to be a low and middle income earner and to retire.But the thing he had going for him was, Player.Those systems for people in this industry, we have to replicate ourselves.So when we're talking about investing,people don't have access to quote unquote a retirement account.And the only reasons things are called retirement accounts in the first place is because they're tax advantaged and they have that separate set of rules.But you can retire out of a brokerage account, you can retire out of a savings, high yield savings account,you can retire out of a IRA.So I think a lot of people in this industry, Don't know that you can set up your own retirement accounts,call them whatever you want.They're your retirement accounts.They may not be as tax advantaged,but on the other side of it,there's also other perks.You have quicker access to it if you need to.You could retire before you hit,retire traditional retirement age.So I like to encourage people that they have a lot of options for retirement.Staying in this industry,it's totally possible.One, the first thing I always tell people to put in place is an emergency fund.When you are in this industry,there is a power imbalance.You are waiting on somebody that you don't know.They are your miniature boss for an hour or whatever, and they're your new boss and you have to train them.And, but there's that power and balance.And so if you don't have an emergency fund or some savings set aside, then you become totally reliant on a singular person's tip.And that can put you in some really unsafe and unwelcome environments.And so one of the things and this is the other thing I like to point out to people in the service industry is that everyone has to save for their emergency fund.That is not a benefit that you're missing out on by being in this industry.We all start from zero there too.And but it's more important for you in this industry as well because.You are put in those situations where you need to keep yourself safe and make sure that you're not saying yes to requests that you would rather say no to, so that's one of the first things we put in place as well.

Yeah, no that's great.Yeah, everybody should have an emergency fund, but it's more important in this particular industry.Yeah, for sure.Okay.Now what are some what do you see are like the common I guess hazards or things that people see in this industry that kind of sabotage their financial goals.

Environment is probably the first one.I'm in construction as well.And there's an organization in construction called OSHA.And OSHA is designed to help workers prevent workplace injuries and workplace deaths.And what they did was something really unique at the time.They trained the workforce and they changed the industry from within.And so to me that's the same thing I'm trying to do is to talk to the workers and change the industry firm within.But you have to start with environment.Every workplace has hazards.You just have to get trained on them most in on their hazards.This is an industry that doesn't train its workers on the hazards.So some of the hazards that are included in this industry are your guests.The people you are waiting on are hazard.They can chip at your confidence, right?Like how many times have people in the industry heard, what's your real job?What else are you doing?What's next after this, right?They will chip away at your confidence.If you don't protect your energy,protect yourself from them.Another hazard in the industry, alcohol substances, you are in the constant.You're in an environment that is exposed to constant alcohol and substance use,and so you need to remember that's just not everybody's lifestyle at all times.You're just constantly exposed to it, so you need to be aware of the fact that's gonna be in your environment at all times.The other thing can be health wellness.Like I can't tell you how many shifts I worked where I didn't go to the bathroom, I didn't drink any water.I didn't get a good night's rest because I stayed out late having a good time after my previous shift.So those are some of the most common hazards that I see.I also see with that lack of financial literacy, a lot of people don't have some of these rules of thumb as far as what they're spending their money on after a shift.So we all talk in the personal finance space about the cost of working in this industry.There's a cost to winding down After a shift.You leave a shift more energized than when you started, right?You had some big rushes.You didn't get to talk to your fellow workers because you were so busy and now you just wanna go and burn off some steam and have a few drinks and order some queso dip.And there you just spent50% of what you just made.It exited your life moments after it entered it.And Yeah.So those are some of the bigger hazards that I see.

Yeah, that,that could be dangerous right there.Oh man, I work so hard, I'm gonna go out I earned this.You tell yourself in your head, I earned this, I'm gonna yolo, spend this money.Yes.Cuz I earned this.

Yeah.And when you walk out of a shift, yeah.You have to remember you are walking out with gross numbers cuz you're a business owner now, right?Yeah.You're walking out with gross numbers.Whereas nine to five, Jason,who's rolling up to the bar,he's dealing with net numbers.Your money is not the same.So it's very important to keep some of those things in mind.

Absolutely.I'm really glad you pointed that out too.Cause I feel like, and this could be anybody in any situation that,you have a hard day at work, you're like, ah, I'm just, I need to go blow off some steam or whatever.But again, the difference is, like you said, the nine to five persons coming in with those net numbers,you're coming in with those gross numbers and like literally you're spending the money that you just earned that day, literally an hour ago.And you just.Used half of it because you felt super energized for having such an awesome day and you're like, yeah,I'm gonna, I earned this a again,yeah, that, that could be a mindset that could be really tough to break.So actually I wanna ask you about that too, cause I know mindset has to be a big piece of this.So how does somebody in this service industry.Have the right mindset to not do those things and to de discipline themself to not, yolo their money away when they had a great day.

Yeah.So there's two approaches to self-care, right?There's proactive and there's reactive.And the reason that I love talking about proactive self-care is because a lot of proactive self-care leads to an abundance mindset.One of my favorite things, To help people who are in the service industry is to talk about meditation.I love meditation, not because it's woowoo, not because it's,mindfulness, meditation does two things for people in the industry.One, it teaches you patience and you need patience.That is a tool in your toolbox in this industry that is a resource that you need in order to be successful.The second thing it does is it interrupt.It allows you to interrupt your thought process.Oh, I'm having a bad day.I don't really feel great.Maybe I'll take the first cut position instead of staying for my entire shift, right?Where if you can learn to interrupt some of those negative talks or interrupt some of your guests negative talk, get over the hurdle of maybe a bad table or a bad guest experience, then you can get yourself back in the game.And Meditation is one of those proactive self-care things that I like to talk to people about who work in the service industry.There are other ways that you can build an abundance mindset and you need an abundance mindset in this industry.I have four strategies that I like to recommend because they're free and I love starting with mindset work.

That's my favorite price, by the way.Free.

Yes.I love starting with mindset work because if you're somebody who can't make some of those big financial shifts right away, you can work on the mindset stuff.You have the resources to work on the mindset stuff.So my first favorite thing to do for mindset is mantras.My favorite mantra when I was in the service industry was money comes easily and frequently because it did.It always came easily and frequently and mantras need to be something where possibility meets truth.So it has to have a little bit of truth,and it has to have a little bit of possibility and use those two things to find a great mantra that works for you.The second one is identity.Identity is, this one can be tricky because some people can say oh,I wanna be a rich person, so I'm gonna spend like a rich person.That one's not, that's not gonna work, right?But are you a saver?Are you saving money?Therefore you're a saver?Are you investing?Therefore, you're an investor.So I adopt, adopting the identity portion of the things that are gonna lead to wealth building is really important and free.The last two are similar because they trick your brain.The first is charity.Charity tricks your brain.Because if you're like, if I have enough to give, then I have enough.So it literally carves its way into your brain to say, I have enough.And then the last one, I just lost my train of thought.Sorry.So charity and gratitude's the final one.When you are in a.Mindset of gratitude, and you're thankful for what you have.You're not focused on what you lack.And so again, this just does a trick to your brain that instantly puts you into an abundance mindset.And you need that abundance mindset to help you build wealth.Because if you're in a scarcity mindset, you're not gonna be able to put money into investments.You're gonna be too scared, and you need to be able to invest in order to build.

Yeah, I absolutely love that, Barbara.Thank you.One of the things I do I journal, right?And I meditate as well.And one of the things I always do in my journal is I write a daily affirmation, right?That's my mantra, right?And I write it every single day.So it's always there in the back of my head as I do it.And I'll tell you what it is it's, I am healthy, wealthy,and live a life of abundance.That's what I write in my journal every single day.It's something that's obtainable.It's something that I'm working on and it's something that I believe, that I'm already there,and that's my mantra, right?And I like to say that to myself every single day.And I think it's important for me to wake up and have that mindset every day.And these other things I identify with this, right?You have to have a good mindset.You have to know who you are,what your identity is, right?Find yourself in charity Giving back.I love giving back.It's one of the reasons why I do this podcast too.This is just another way for me to give back to other people and help show them that you can do this too.And of course, gratitude.I am, I'm super grateful even that we get to have this conversation.The people that I get to meet through this podcast is just absolutely amazing.So these four tenants that you have here are absolutely amazing.I love it.And I just wanna point that out.

Thank you.That's awesome.Yeah, I love them too.I love mindset and stuff.It's so fun, it's so good.

Mindset is the most important thing, right?In anything that you do.But when it comes to your finances,that's the first thing you need to fix.And the first thing you need to change is your mindset, right?Because as you were describing earlier, you could sit here and yeah.You might not be itemizing your expenses or your income.And you might just not, you might not just be disciplined enough to do that yet.And how you get yourself there by changing your mindset, changing how you think, changing how you operate.There'll be a day when you keep working on yourself and working on yourself that you're gonna have that rough day at work or that really great day, and you're gonna say, okay, I'm gonna go wind down now.Actually, you know what?Today was a good day.I'm gonna go back home, get a good night's sleep and get recharged for tomorrow.That's when you know you've made that change, right?Because now you're focusing more on your health, you're focusing more now on, on everything else that you're doing which comes back to your health cuz your financial health will affect your physical health.And a lot of people don't realize that.I don't think.

Yeah.And that's proactive healthcare or the proactive self care is getting that good night's sleep.

And when you make that shift from reactive to proactive,that's when you change your mindset.

And I'm glad you mentioned like that bandwidth angle because I find that a lot when people who are in the service industry,not only is it a really physical job, but it's a mental job as well.So when you're exhausted, a lot of people, when you're at your computers, you come, you're mentally exhausted after your nine to five.But people in the service industry are both physically and mentally exhausted.And so there's, I'm like, you have to find a way to carve out bandwidth to take care of your finances.One of my favorite tips for people in the service industry to get some of that bandwidth back is to use your pen.Do not try to remember people's orders or people's names.Don't, no one's impressed.If anything, people get, they're anxious because they're worried you're gonna mess something up, and that's not what you want for your dining or buyer experience.

Wow, that's huge.

Yeah.Use the pen, write things down.Don't be that guy or gal.And then also have a few go-tos.If somebody wants a recommendation.Maybe don't tailor every single recommendation to that person.Maybe have a few go-tos so you're not having to use that mental energy each time in each guest situation.

Yeah.

Have some favorites lined up.Cuz you're right that bandwidth you need it in order to make changes.

It's the small thoughts that I think people don't think about really, that, that take up a lot of that space in your head that take up that bandwidth.Like you said, it's the small actions that you do that all adds up.So if you're sitting here thinking, oh,this person seems like they might be a good steak guy, let me recommend this.You're wasting too much time thinking about that, so yeah, having those go-tos, boom, it's already there.You're not wasting time.You spit it out and you move on and you keep things going.So I love that.Now, Barbara, I wanna ask you something and before we go into the final round,and this might be a little spicy or might heat things up a bit, but.I wanted to ask you about tipping in particular when it comes to, so I get it,like in the service industry, a lot of people live off of and rely on tips, but one of the things I've noticed lately and I've heard other people talk about this too, is that you can go somewhere else to, a fast food restaurant or Starbucks,and you put your order in, you get it,and they flip the little iPad around.It's asking you for a tip.Now they're not, they're getting paid their full wage.Versus somebody who's actually a waiter or a waitress, that is living off that $2 and 13 cents.And then sometimes I feel like, man, I feel obligated to, to leave a tip here.But then there's other times I'm like no.Why am I gonna tip for something I normally never tip for in the past?So what are your thoughts on that?This might be a hot take,but what are your thoughts?

I am so glad you asked this question.I love this question.So I get it.Our world's changing, right?So what I like people to think about is the fact that iPad, it represents what used to just be a tip jar.So the iPad is cha is replacing the tip jar.And for many people who maybe ignored the tip jar or were getting services that didn't, rise to the occasion of tipping, they didn't notice that tip jar.But now it's part of every transaction.So we just have to get used to the fact that tip jar is now a part of every single transaction.And just like in any industry, you have to be an educated and engaged consumer.I like to say tip on service, not on product.Let's say you're at that coffee shop and you're getting a latte and that person is putting a foam cat face on your latte,and they're risking burning themselves.Yes, they are making not the $2and 13 cents sub minimum wage.They're making the regular $7 and 25 cents.Minimum wage, but that's still hard to live on.So if you felt like you got, that's very fair.Yeah.If you felt like you got great service and this person wrist burning themselves for you, maybe throw them a buck, but don't feel the need to tip 30% on that,just because that's what the prompts are.Those prompts sometimes are preloaded, sometimes therefore, the optionality of something else that maybe that establishment offers.Like I always get the give the reference of A bakery, right?If somebody ordered a customized birthday cake and that baker nailed it, they got the exact cake that your six year old was dreaming of, then that's the occasion where you're gonna tip above and beyond.So in some of these establishments, you're like, why is this even being asked of me?Why do I even have the optionality?It's usually because they offer a lot of different services, and some of those services have the option.Of tipping.So if you are an engaged consumer, then you know I got a packaged water and a packaged sandwich, I can hit no tip with confidence and walk out of this place with my head health high because I know that this person is paid their regular minimum wage and I didn't get a service where.I think and I think it's causing a lot of like tipping fatigue.And so people are getting a little angry and it's rising to the occasion of we need to do away with tipping altogether.

That's why I asked this question, cause I do, I,again, I hear people talking about this all the time and that's why it's yeah, maybe that's what it is.It's this tipping fatigue now.Because the way I look at it is, you have these restaurants and stuff that are.Basically hiring people and paying them a non livable wage, even if they were paying them minimum wage.It's non livable.And expecting the consumer to be the person to offset that and pay this person's living expenses.That's just the different discussions that I've been hearing and and you see it every day.Like how can you, Feel like $2 and 13cents as like a retainer or whatever is even legit because you know what happens if that individual, just had crappy people all day that didn't leave any tips and now, they just worked this full day of eight hours and they made 16 freaking dollars.Like what?Or they made a couple tips.So they made, 30 bucks for putting in a full eight hours of really busting their butt, is that really?Is this where we really are?Because you look at countries overseas too, like in Europe.Like they don't tip over there.Japan don't tip.

There's like poor countries.

Carry a better wage to those people.

Majority of countries do have tipping culture.There are a few countries in Europe that really like to point out that they don't have tipping in Australia and Japan, but majority of other countries do have a tipping culture.Yeah.And over one third have a tipping culture of over 10%.So I always like to talk a little bit about the history of tipping.So tipping came over and was popularized post-slavery.So what happened was formerly enslaved people went out into the workforce and most of them got jobs in restaurants and on the railroads.Both of those positions were tipped positions, and the employers wanted to profit off the backs of their black,brown, uneducated minority workers.But the people who own service-based establishments are not those employers.And a big part of the reason that tipping has lasted in the US for over a hundred years is because it is a form of a subsidy for this industry.It is a unique industry, again,that has unique challenges.Over 90% of this industry is small mom and pop establishment.That would not be able to stay in business.If they had to have the compliance measures of an added HR person of management, of a 401k, of managing all of these benefits.They wouldn't be able to stay in business if they had to pay payroll taxes on the added wages for those employees.So there's a whole host of reasons why the government.The service-based establishments and the workers all come to the table with the subsidy.No one in agreeing that we are gonna slightly subsidize this and let you pay for a small portion of this directly because you're not gonna pay for a $60 burger.And yeah, they don't do it in Europe, but they have in some countries in Europe.But they have different systems set up for those establishments, different,totally different laws, taxes and systems than we do here in the us.And so there's restaurant groups here in New York City that have tried to do away with tipping.Danny Meyers, one of the most famous restaurant groups, tried to do away with tipping, just went back to tipping because not only is it what works best for the business, but it's what the employees want and what customers want.No, $2 and 13 cents is not an appropriate sub minimum wage.In fact, I think we need to do away with this.I have a whole policy wishlist, but that doesn't mean that tipping's gonna go away.It's an important part of this industry,you're getting a unique guest experience.You're the only person who's able to gauge the value of that unique service-based experience.And so you have to be a part of that experience by offering your tip as a portion of their compensation.

Wow.Thank you so much for that, for sharing that.That was.

Sorry.

Much better than I expected that answer to be because,I found myself even saying that too.Oh, why am I tipping for something I've never had to tip before?And it's not something you think about too much, right?You go get that latte from Starbucks, right?And somebody took the time to make sure your milk was frothed properly and everything looks nice and you it nice presentation and you're just like, oh yeah, whatever.It's a $2.No, it's Starbucks.It's like a $10 coffee.

Seriously.

But yeah.You know that's a very.Great point, and I really hope that people that are listening to this right now have a better understanding and can better resonate with people in the service industry when it comes to tipping.Yeah.

Yeah.And I think the other thing is that tipping is only found in luxury service-based establishments.There's no tipping involved in places like grocery stores.So if you don't have the budget or means to tip, there's a lot of other things that you can do, right?You can have a picnic,you can have a potluck.You do not need to go to a service-based establishment and maybe force somebody to work without a portion of their wages.Because the thing is that also a lot of these positions have support positions.So if you're a waitress, for instance,if somebody doesn't tip you, you still have to tip out your busboy.You still have to tip out your bartender.They still have to tip out their bar back.And so not tipping is not an option in a luxury experience.

Yeah.

And so part of that is that as people get older and as people get more money, we have to be.Engaging and teaching people how to use luxury services.If you walk into a spot for the first time, you might not know how to act or what the rules and engagement are,and you might need to learn, oh, okay,I get a robe, or, whatever the rules are for each industry and the service industry, and luxury and tipping.It's something that people just sometimes need to be educated on.

No,definitely appreciate that.Okay, so Barbara, I wanna transition this now into something that I call the final round.It's where I'm gonna ask you the same four questions that I ask everybody that comes on this show and get a good idea of where your mindset is when you're put under a little bit of pressure.But I think we know where that's at cuz you're gonna crush this.You ready to go?

Okay, let's do it.

Let's do it.Okay.So Barbara, Spending over 20years in the service industry.I'm sure you've had a lot of ups and downs when it came to your finances and figuring out the right way to make this work, especially as you were coming together to write this book.What would you say is the biggest mistake you've ever made in your finances?

When I was 19 my father passed away and the house that I grew up in was sold against my wishes.So I wrote a letter to the homeowners asking if I could buy it from them,and a week later I got a response and I bought the house for twice the price that the previous owners paid, only months prior, a hundred percent financed.And then I proceeded to take out10 credit cards and max them out to renovate the house myself at 19.So that was my biggest and worst financial mistake.And part of the reason that I needed to rely on cash so heavily because I had creditors chasing me.And my credit was absolutely gone after that.

Yeah.

That was my,that was a huge financial hit.But it was like one of those things where I'm like, so glad it happened cuz I learned so many things from it.I learned so much about construction,I learned so much about real estate.I learned so much about myself,about failure it is still paying dividends at this point.It was the worst paper mistake, but the best thing that ever happened to me.

Great.Awesome.Thank you for your transparency with that.Okay.The next question, Barbara,ties into that one.These all kind of tie into each other.But what is something that you've learned that you wish you knew when you first got started?

I'm sure everyone's answer is compound interest, so I'm not gonna say compound interest.I would probably say I wish I knew all of the ways that people could report to your credit report.Like I didn't know the library could hit your credit report.I didn't know medical debt from other countries could hit your credit report.Like I feel like I tested the credit systems limits.So I wish I had learned more about that.

Okay.Right on.Right on.Yeah.That's interesting.I didn't know that medical debt from other countries can actually hit your credit report.I think I've heard of the library can actually get you,but yeah, no that's interesting.Okay.All right.So the next question, Barbara and again this one ties into the last as well.Do you have any tips or tricks and we'll keep this service industry related, right?So do you have any tips or tricks that you would recommend to somebody that is just getting started out in that industry today?

Other, I would first tell them to pick up a copy of my book.But let's go.

Ofcourse.

Let's go.Yeah.Let's go back to the emergency fund.Absolutely.Industry is starting your emergency fund, and I always like to gamify it.So here's one little tip I'll give for people who are trying to save for an emergency fund.If you are in a service-based establishment, let's say you're a waitress and you have a six table section, take one of your tables and the tips from that table.Are always going into your emergency fund until it's full.So make it a little bit of a game and I guarantee you that you will treat that table so much differently because that table is literally saving your butt.If you're a bartender,pick up a couple of stools.That's your savings section.If you're a dancer, pick a guy with a certain shirt color or a bill type, but make it fun and enjoyable so that you can get that safety net in place for yourself.

Wow.That is fantastic.That is fantastic.All right, awesome.Now I will preface this last question with, besides your own, but do you have a favorite business investing or real estate related book or podcast or both?

My first two favorite podcast that I started listening to was So Money By Farnoosh Torabi and Afford Anything by Paula Pant.I'm reading a book right now called the Perfectionist Guide to Losing Control.It's so good.It's just, oh man, I see myself so much in that if you at all identify as slightly a perfectionist, pick yourself up a copy of that book because Gosh, even like her explanation of the difference between feelings and intuition worth it just in that such a good book.

Awesome.Awesome.Thank you for those recommendations.I wrote them down cuz I don't think I had any of those on my list and they're getting edited in.Okay, Barbara, so that is it for the final round.However, I do have one more question for you, and this is the most important question of this interview because.This was a different kind of episode for us, right?And we have a whole different perspective that, came from this interview and I really appreciate that.And what I'd like to do is provide, where people can find more information about you, where they could find your book.So if you have a website or any social media profiles you wanna share with us, please do and I will make sure that it gets out to everybody in the show notes and and make it easy for people to find you.

Yeah, so thank you so much for asking me that I always forget.The book is available on Amazon.It's, you can get it in Kindle paperback or hard cover copy.If you do buy it, please leave a review cuz I have a shadow ban on Amazon because I have the word stripper in my subtitle.So I'm not able to advertise.So please leave a review if you buy a copy.I'm available on my website, tippedfinance.com.You can reach out to me if you have questions, one-on-one coaching.I also do speaking.I just gave an awesome keynote on financial legitimacy for people who do work in the service industry or other,maybe look down upon professions.You can follow me on the socials @TippedFinance.I mostly hang out on Instagram.I'm starting on TikTok.I'm on Twitter as well.I try to make financial literacy fun, approachable.I do standup now and again,so yeah, please find me on the socials or reach out to me.

All right.Fantastic.Barbara, thank you so much.And like I said, I'll make it easy for everybody.It'll be in the show notes.You could just copy and paste or click away.Just don't do it if you're driving,I'd appreciate that very much.And I wanna say again, thank you so much for joining me today.This was a real treat.I feel like I learned a lot more about the service industry just from the short conversation that we had.

Thank you, mike.This was a lot of fun.

Yeah, absolutely.And hey, I wanna also thank my listeners for joining me and our special guest today, Barbara Sloan,on the Average Joe Finances Podcast.Go leave us a five star review and tell us what you liked about today's specific episode with Barbara.Aloha from Hawaii and have a great rest of your day.