Takeaway

There are many tricks and tips to putting away money for a rainy day or for that extra special thing you really want; just be consistent in funding yourself through savings accounts and the future you will thank you. 

There are many, many parts of running a massage business that are not glamorous. Cleaning the bathroom, awkwardly enforcing a cancellation policy, researching the features and best pricing on an electric massage table, reading tax code as it applies to the ADA deduction for that table . . . and, possibly the least glamorous, but very necessary thing: savings accounts. 

Stashing away money for some unseen, unexciting purpose is way less fun than buying a weighted blanket for your massage table or paying yourself a little extra during your birthday month. And yet, saving money is demonstrating savvy business skills and a kindness to the future you who will experience ups and downs in your business. 

You don’t need to be a full-on massage business owner to benefit from a solid savings plan. If you are an independent contractor, you will likely need the same financial cushion; and if you are an employee, your benefits may vary and be limited or not include sick time or vacation time.  

So here we go. The most commonly thought of savings account is an emergency savings. An emergency savings protects your business and finances if an unexpected event happens and you can’t work. 

When you are self-employed, it’s wise for your business to also keep savings aside for sick time, vacation time, and perhaps funds to expand or make purchases for your business. You decide what you and your business need to be protected from calamity and when you’re comfortable taking time off.

We like to have a specific savings account assigned to each purpose to keep it simpler and more structured. If you like organizing and tracking your money and have good self-control with money, one big savings account to hold all your funds may work for you.

You may choose to add some companion savings accounts to your current business checking account or use a separate bank altogether. If you find it tough to discipline yourself with money and think you may “borrow” from a savings account when money gets tight, put your savings accounts in a separate bank and make it harder to access (and don’t link those accounts). 

Emergency Savings

This is reserved for a real emergency, something you can’t predict. Having an accident or illness that pulls you out of work for a few months, suddenly needing to take time off to care for an ill loved one, or your office flooding and being closed for repairs for two months are all emergencies. 

How much you keep in your emergency savings is a personal decision. Ideally, you can keep enough money aside to pay your office bills and your wage for the time you need to take away from work. Everyone has a different comfort level with risk, so think about how much you need to save to not panic about money when a crisis hits. 

We like to have three months of office expenses and wages saved so we can keep paying ourselves at a regular rate, even when we’re not working. Three months is also typically enough time to figure out a plan B if you know you’ll be out of work for longer. 

Sick and Vacation Pay Savings

It’s inevitable you will catch a cold or some other illness that will take you out of work for a few days. If you are the primary caregiver for kids or other loved ones, you can triple the likelihood you’ll need to take time off for someone else’s illness. 

It’s hard to know how much sick time you will need in any given year, so we estimate two weeks. If we need to be out longer, it becomes an emergency-savings situation. Two weeks’ worth of sick savings would mean saving half our monthly expenses and two weeks of take-home pay. 

A break from work in the form of a vacation is also important for a sustainable business. If you’re someone who doesn’t take a full week off and instead just takes lots of three-day weekends, you may not need much in your fund, since single days off tend to get absorbed easily into the finances. But if you like to take two weeks in the summer and 10 days around the winter holidays and kids’ school vacations, some planning is a good idea. 

How much you should save is calculated by figuring the office expenses and your take-home pay for the length of time you take away from work. 

“Big Things” Savings

The most common “big thing” desire we hear from massage therapists and bodyworkers is an electric table. They are fabulous pieces of equipment, but can be a huge expenditure for a small business. Or maybe you want to take a 10-day CE course in Costa Rica, or just have the money on hand to upgrade the furniture in your office when you stumble upon the perfect piece while antiquing. 

“Big things” are purchases you can plan for well ahead of needing them. This savings allows you to dream a little and then act on that dream. How much you keep in a “big things” account is very personal and individual. 

All the Feelings

Outside of it just being smart to have money set aside, there is a huge psychological benefit to having a strong savings cushion.

When you know you can still pay the bills, you will be less tempted to work when you are feeling ill. With a good savings plan intact, you won’t have to tolerate an abusive landlord or unacceptable working conditions as an employee or contractor. You can enjoy a vacation and truly relax when you don’t have to overwork before and after the time off to make up for the lost income. When the financial pressure is relieved, you can care for yourself or a sick loved one with your full attention. That’s priceless. 

How Do You Fund Savings?

There are endless approaches to saving money. It’s worth taking a few minutes to consider your money style and find the best fit for you. 

Set up a weekly automatic transfer from your business checking to one of your savings accounts. If money is really tight and you need to start with just $10 a week, that’s a great start! The most important step is the first one and you win just by starting. Try to increase by $5 as frequently as possible.  

Assign a regular client to be your “savings client.” Whenever that client comes in and their payment clears, immediately deposit that amount into your savings. This also works with service types. You could decide that every time you give a hot stone massage, that income gets moved into savings. Retail sales can also be a great income stream to fund a savings account. 

If you accept gratuities, you could decide that all tips will be deposited into savings at the end of each week. Likewise, if clients give you a holiday tip, that could go into savings. If you struggle with delaying that financial gratification, maybe commit to saving half your tips and gifts. The best method is the one that suits you and is sustainable. 

You can jump-start your savings by selling extra “stuff” that has accumulated in your office, taking some extra chair massage gigs, or even a side job until your savings accounts are fully funded.

My favorite off-the-wall savings technique is what we call the Fifth Week Phenomenon, because it feels like we’re beating the calendar. This technique works well if you pay yourself weekly or every other week.  

A few times a year, there is a month that has an “extra” payday. For example, if you typically pay yourself weekly on Fridays, March, June, and December of 2023 will have five paydays instead of four. 

Try to put all or at least half of this “extra” weekly pay into one of your savings accounts. You may have to budget a little more carefully at home to have groceries and gas, but since your regular monthly bills are covered by the first four paychecks, you may have a little extra to play with. This should not be a sole approach to saving, but it’s a nice bump a few times a year.

Peace of Mind is Priceless

Saving money is a challenging task that many business owners struggle with. If you can get started, the momentum will be rewarding and likely keep you going. You will never regret being prepared for an emergency, being able to heal, or just resting without the fear of financial harm.