4 answers
giselle
Student
Largo, Maryland
2
Questions
Asked
883 views
Once you start earning money regularly and consistently as an esthetician, how should you manage your finances effectively?
I’m curious about how to manage my money once I start receiving payments as an esthetician. Since estheticians are paid regularly, what are some effective strategies for handling that income, particularly when it comes to purchasing products and maintaining inventory? How should I begin managing my finances once I get started?
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4 answers
Marie Rosecrans
Marketing
3
Answers
San Francisco, California
Updated
Marie’s Answer
Hi Giselle, Thank you for your great question and kudos to you for starting to think about how you'll manage your finances as you begin your career as an Esthetician. I always try to get the perspectives of others in the field and network with others to better understand what's worked for them and where they may have learnings to share. I have always found that people are generally open to giving advice. That network can come from others in related fields as well (hair dressers, colorists, massage therapists, et al). Try to get different perspectives and figure out what works best for you! I would also say that it may take some trial and error so be kind to yourself in the process!
I don't know if you will be self-employed or working for a Spa or similar service provider but I would definitely recommend that you have a way to manage your funds in a way that allows you to categorize how your earnings and expenses are being used. I know that I use Monarch Money personally but Intuit has a number of offerings for small business owners.
All the best to you!
Network and build relationships with others in the same or tangential fields.
Seek out a tool/app that gives you visibility into earnings and expenditures with reporting capabilities.
Enjoy the process!
I don't know if you will be self-employed or working for a Spa or similar service provider but I would definitely recommend that you have a way to manage your funds in a way that allows you to categorize how your earnings and expenses are being used. I know that I use Monarch Money personally but Intuit has a number of offerings for small business owners.
All the best to you!
Marie recommends the following next steps:
James Constantine Frangos
SOFTWARE ENGINEER SINCE 1972; NUTRITIONIST SINCE 1976.
7094
Answers
Gold Coast, Queensland, Australia
Updated
James Constantine’s Answer
Good Day Giselle!
Effective Financial Management for Estheticians
Managing finances effectively as an esthetician involves several key strategies that can help you maintain a healthy financial status while ensuring your business grows. Here’s a step-by-step approach to managing your income, expenses, and investments in your esthetician practice.
1. Establish a Budget
Creating a budget is the first step in managing your finances. A budget helps you track your income and expenses, allowing you to see where your money goes each month.
Income Tracking: Start by documenting all sources of income, including services rendered, product sales, and any tips received.
Expense Tracking: List all fixed and variable expenses. Fixed expenses may include rent for your workspace, insurance, and utilities, while variable expenses could include supplies, marketing costs, and continuing education.
Using budgeting tools or apps can simplify this process. Aim to allocate specific percentages of your income towards different categories like savings, reinvestment into the business, personal expenses, and taxes.
2. Separate Personal and Business Finances
It’s crucial to keep personal finances separate from business finances. This separation simplifies accounting and tax preparation.
Business Bank Account: Open a dedicated bank account for your esthetician earnings. This will help you manage cash flow more effectively.
Accounting Software: Consider using accounting software like QuickBooks or FreshBooks to track business transactions accurately.
3. Build an Emergency Fund
An emergency fund is essential for any self-employed individual. It provides a financial cushion during slow periods or unexpected expenses.
Savings Goal: Aim to save at least three to six months’ worth of living expenses in this fund.
Regular Contributions: Set aside a portion of each paycheck into this fund until you reach your goal.
4. Invest in Inventory Wisely
As an esthetician, maintaining inventory is vital for providing services. However, it’s important to manage inventory costs effectively.
Inventory Management System: Implement an inventory management system that tracks product usage and alerts you when stock is low.
Bulk Purchasing: Consider buying products in bulk or establishing relationships with suppliers for discounts on frequently used items.
Product Selection: Focus on high-quality products that yield better results for clients; this can lead to repeat business and referrals.
5. Plan for Taxes
Self-employed individuals must pay estimated taxes quarterly based on their earnings.
Tax Savings Account: Set aside a percentage of each paycheck (typically 25%-30%) into a separate account designated for taxes.
Consult a Tax Professional: Working with an accountant familiar with self-employment tax laws can ensure compliance and optimize deductions related to your business expenses.
6. Reinvest in Your Business
To grow as an esthetician, consider reinvesting some of your profits back into the business.
Education and Training: Attend workshops or courses to enhance skills or learn new techniques that can attract more clients.
Marketing Efforts: Allocate funds towards marketing strategies such as social media advertising or local promotions to increase visibility.
7. Monitor Financial Performance Regularly
Regularly reviewing financial performance helps identify trends in income and spending patterns.
Monthly Reviews: Conduct monthly reviews of your budget versus actual spending to adjust as necessary.
Financial Goals Assessment: Set short-term and long-term financial goals (e.g., increasing revenue by 20% over the next year) and assess progress regularly.
By following these steps—establishing a budget, separating finances, building an emergency fund, managing inventory wisely, planning for taxes, reinvesting in the business, and monitoring performance—you can effectively manage your finances as an esthetician while ensuring sustainable growth in your practice.
Top 3 Authoritative Sources Used:
1. U.S. Small Business Administration (SBA)
The SBA provides comprehensive resources on budgeting, financial management practices specifically tailored for small businesses including service-based industries like esthetics.
2. American Association of Cosmetology Schools (AACS)
AACS offers educational materials focused on best practices within the cosmetology field including financial management advice relevant to estheticians starting their careers.
3. QuickBooks Blog
QuickBooks provides insights into accounting practices for small businesses along with budgeting tips that are particularly useful for freelancers and self-employed professionals such as estheticians.
Probability the answer is correct: 95%
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
|==========================God Bless You, Richly!==========================|
|===========================James Constantine===========================|
|=============THE LITTLE OLD AUSTRALIAN OUTBACK DIETITIAN==============|
|===================Programming For Your Nutrition Education=================|
|============================~ Since 1972!==============================|
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
Effective Financial Management for Estheticians
Managing finances effectively as an esthetician involves several key strategies that can help you maintain a healthy financial status while ensuring your business grows. Here’s a step-by-step approach to managing your income, expenses, and investments in your esthetician practice.
1. Establish a Budget
Creating a budget is the first step in managing your finances. A budget helps you track your income and expenses, allowing you to see where your money goes each month.
Income Tracking: Start by documenting all sources of income, including services rendered, product sales, and any tips received.
Expense Tracking: List all fixed and variable expenses. Fixed expenses may include rent for your workspace, insurance, and utilities, while variable expenses could include supplies, marketing costs, and continuing education.
Using budgeting tools or apps can simplify this process. Aim to allocate specific percentages of your income towards different categories like savings, reinvestment into the business, personal expenses, and taxes.
2. Separate Personal and Business Finances
It’s crucial to keep personal finances separate from business finances. This separation simplifies accounting and tax preparation.
Business Bank Account: Open a dedicated bank account for your esthetician earnings. This will help you manage cash flow more effectively.
Accounting Software: Consider using accounting software like QuickBooks or FreshBooks to track business transactions accurately.
3. Build an Emergency Fund
An emergency fund is essential for any self-employed individual. It provides a financial cushion during slow periods or unexpected expenses.
Savings Goal: Aim to save at least three to six months’ worth of living expenses in this fund.
Regular Contributions: Set aside a portion of each paycheck into this fund until you reach your goal.
4. Invest in Inventory Wisely
As an esthetician, maintaining inventory is vital for providing services. However, it’s important to manage inventory costs effectively.
Inventory Management System: Implement an inventory management system that tracks product usage and alerts you when stock is low.
Bulk Purchasing: Consider buying products in bulk or establishing relationships with suppliers for discounts on frequently used items.
Product Selection: Focus on high-quality products that yield better results for clients; this can lead to repeat business and referrals.
5. Plan for Taxes
Self-employed individuals must pay estimated taxes quarterly based on their earnings.
Tax Savings Account: Set aside a percentage of each paycheck (typically 25%-30%) into a separate account designated for taxes.
Consult a Tax Professional: Working with an accountant familiar with self-employment tax laws can ensure compliance and optimize deductions related to your business expenses.
6. Reinvest in Your Business
To grow as an esthetician, consider reinvesting some of your profits back into the business.
Education and Training: Attend workshops or courses to enhance skills or learn new techniques that can attract more clients.
Marketing Efforts: Allocate funds towards marketing strategies such as social media advertising or local promotions to increase visibility.
7. Monitor Financial Performance Regularly
Regularly reviewing financial performance helps identify trends in income and spending patterns.
Monthly Reviews: Conduct monthly reviews of your budget versus actual spending to adjust as necessary.
Financial Goals Assessment: Set short-term and long-term financial goals (e.g., increasing revenue by 20% over the next year) and assess progress regularly.
By following these steps—establishing a budget, separating finances, building an emergency fund, managing inventory wisely, planning for taxes, reinvesting in the business, and monitoring performance—you can effectively manage your finances as an esthetician while ensuring sustainable growth in your practice.
Top 3 Authoritative Sources Used:
1. U.S. Small Business Administration (SBA)
The SBA provides comprehensive resources on budgeting, financial management practices specifically tailored for small businesses including service-based industries like esthetics.
2. American Association of Cosmetology Schools (AACS)
AACS offers educational materials focused on best practices within the cosmetology field including financial management advice relevant to estheticians starting their careers.
3. QuickBooks Blog
QuickBooks provides insights into accounting practices for small businesses along with budgeting tips that are particularly useful for freelancers and self-employed professionals such as estheticians.
Probability the answer is correct: 95%
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
|==========================God Bless You, Richly!==========================|
|===========================James Constantine===========================|
|=============THE LITTLE OLD AUSTRALIAN OUTBACK DIETITIAN==============|
|===================Programming For Your Nutrition Education=================|
|============================~ Since 1972!==============================|
✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯✯
Michelle M.
Actress
3284
Answers
Updated
Michelle’s Answer
Hello, Giselle !
It's exciting to think about when you would be a professional Esthetician, a very satisfying career !
You're already thinking about money management and that shows that you are conscientious and aware that good money management will take you far and spare you a lot of challenges. There's really no general or quick advice about your situation because it would require sitting down with someone who could ask you questions and base it on your specific circumstances. That being said, the simple generalized insight is: you won't be able to spend money you don't have. Do not let credit card usage get out of hand.
Only charge things that you know you can pay in full when the bill comes. Estheticians not only work for companies, they also freelance and sometimes do home visits for customers to make extra money. You'll never know now what your income would be until you start. Just use the simple rule that if you don't have the money for something or to pay it on a credit card bill, wait until you do have the money for it.
I know that buying product can get expensive, especially lately. Just pace yourself and use professional beauty supply shops (but even they are getting expensive, too !) Buy a little at a time, especially when you are starting out. It may be good to obtain a position at a company to begin with.
There are some great money management courses online that you can take for free. Personal finance classes can be found on Udemy, Coursera, Skillshare, Khan Academy, McGill Personal Finance Essentials, Duke University's Behavioral Finance Course, and The University of Illinois—Urbana-Champaign's Financial Planning for Young Adults. They're free.
How you budget your money will depend on what's happening in your life when you start working. Will you have a rent to pay or live with family ? Will you have a car payment ? So once you start working, you will intuitively know your budget and what you can or cannot do in a given month.
I hope this helps and I wish you all the best !
It's exciting to think about when you would be a professional Esthetician, a very satisfying career !
You're already thinking about money management and that shows that you are conscientious and aware that good money management will take you far and spare you a lot of challenges. There's really no general or quick advice about your situation because it would require sitting down with someone who could ask you questions and base it on your specific circumstances. That being said, the simple generalized insight is: you won't be able to spend money you don't have. Do not let credit card usage get out of hand.
Only charge things that you know you can pay in full when the bill comes. Estheticians not only work for companies, they also freelance and sometimes do home visits for customers to make extra money. You'll never know now what your income would be until you start. Just use the simple rule that if you don't have the money for something or to pay it on a credit card bill, wait until you do have the money for it.
I know that buying product can get expensive, especially lately. Just pace yourself and use professional beauty supply shops (but even they are getting expensive, too !) Buy a little at a time, especially when you are starting out. It may be good to obtain a position at a company to begin with.
There are some great money management courses online that you can take for free. Personal finance classes can be found on Udemy, Coursera, Skillshare, Khan Academy, McGill Personal Finance Essentials, Duke University's Behavioral Finance Course, and The University of Illinois—Urbana-Champaign's Financial Planning for Young Adults. They're free.
How you budget your money will depend on what's happening in your life when you start working. Will you have a rent to pay or live with family ? Will you have a car payment ? So once you start working, you will intuitively know your budget and what you can or cannot do in a given month.
I hope this helps and I wish you all the best !
Jeremy White – MSIDT
Manager Marketing Ops
1
Answer
Greenville, South Carolina
Updated
Jeremy’s Answer
Hi giselle,
It’s great that you’re thinking about managing your finances early. Good habits now will serve you throughout your career and help you feel confident in your decisions.
Start by understanding your current financial situation. How much are you making? What are your expenses, both big (like rent) and small (like coffee runs)? Be honest with yourself—knowing exactly where your money is going is key.
Then, think about your goals: What do you need to buy for your business? What personal goals do you want to save for?
Once you know where you stand, focus on saving!
Whether it’s $1,000 for emergencies or building up three to six months for expenses, the key is to create a financial cushion. This gives you flexibility and peace of mind when unexpected costs arise. What matters most is starting small and building over time.
If you have debt, work on paying it off. Freeing yourself from debt allows you to keep more of what you earn.
Also, understand the difference between needs and wants—this clarity will help you stay in control of your spending.
These habits will give you the confidence to know what you can and can’t afford, helping you make better decisions for your business and life. By starting now, you’re setting yourself up for financial freedom and success.
You’ve got this!
Understand Your Current Finances
Set Clear Goals
Start Saving
Pay Down Any Debt (Loans,Credit Cards ect)
Prioritize what’s essential over what’s nice to have and have FUN!
It’s great that you’re thinking about managing your finances early. Good habits now will serve you throughout your career and help you feel confident in your decisions.
Start by understanding your current financial situation. How much are you making? What are your expenses, both big (like rent) and small (like coffee runs)? Be honest with yourself—knowing exactly where your money is going is key.
Then, think about your goals: What do you need to buy for your business? What personal goals do you want to save for?
Once you know where you stand, focus on saving!
Whether it’s $1,000 for emergencies or building up three to six months for expenses, the key is to create a financial cushion. This gives you flexibility and peace of mind when unexpected costs arise. What matters most is starting small and building over time.
If you have debt, work on paying it off. Freeing yourself from debt allows you to keep more of what you earn.
Also, understand the difference between needs and wants—this clarity will help you stay in control of your spending.
These habits will give you the confidence to know what you can and can’t afford, helping you make better decisions for your business and life. By starting now, you’re setting yourself up for financial freedom and success.
You’ve got this!
Jeremy recommends the following next steps: