Podcast

When you’re a business owner, taking a vacation is a double whammy of actual vacation expenses AND loss of pay. Here’s a quick tip to help plan ahead and make an actual vacation happen.

See our related post How to Give Yourself Vacation Pay.

This episode is sponsored by:

• ABMP
• The Jojoba Company

Transcript:

Sponsor message This episode is sponsored by The Jojoba Company. I firmly believe that massage therapists should only be using the highest quality products, because our clients deserve it, and our own bodies deserve it. I’ve been using jojoba for years. Here’s why: Jojoba is nonallergenic; I can use it on any client and every client without fear of an allergic reaction. Jojoba is noncomedogenic, which means it won’t clog pores; so if you have a client that’s prone to acne or breakouts, jojoba is a great choice for them. It also won’t go rancid; it doesn’t contain triglycerides like many products; so it won’t go bad. This makes jojoba a great carrier for essential oils, too. And finally, jojoba won’t stain your 100% cotton sheets; so your linens will look better for longer. And since jojoba won’t go rancid, they’ll always smell fresh and clean. For more information and to get some jojoba, go to massagebusinessblueprint.com/jojoba. That’s massagebusinessblueprint.com/J-O-J-O-B-A.

Michael Reynolds Hey everyone. Welcome to the Massage Business Blueprint podcast, where we discuss the business side of massage therapy. I’m Michael Reynolds.

Allissa Haines And I am Allissa Haines.

MR And we are your hosts. Do you have coffee today, Allissa?

AH Yes. Yes.

MR Good. Just making sure. You sounded very chipper; so I thought you had some coffee in hand.

AH I am.

MR Thanks for joining us. We’re glad you’ve joined us today for this episode. I’m feeling good about this episode. I’m pretty excited because it’s about a money topic. Anything about money I get excited about, because I’m a nerd about that stuff; so I’m kind of pumped.

AH We love the money!

MR We love the money! We love talking about money.

AH We do. Fun fact. Michael and I often send pictures back and forth of Scrooge McDuck rolling around in various piles of coins and cash.

MR [laughs] Diving into his pool of coins.

AH Yes —

MR That’s a little gift we pass back and forth.

AH We both love us some money. I am working towards being debt free. Michael’s made huge strides in his own debt free, and taught me — lifestyle and taught me a ton of stuff about it. And that is a really big deal for us. So we love money topics.

MR Yeah. Every time we get an affiliate check for $5 from Acuity or something, we’re like Scrooge, Scrooge McDuck. Teslas for everyone! [laughs]

AH Guys, legit. It’s part of our business plan that Michael and I will be able to buy matching Teslas one day. So he’ll be driving around Indianapolis in his little Tesla, and I’ll have my matching version over here in Massachusetts, and it will be awesome.

MR It’s on my dream board.

AH But first — but first, Michael, we got to talk about today’s topic.

MR We do. And today’s topic is how to give yourself vacation pay.

AH Woo! Okay. I love to take time off of work. Obvs. I like myself a good vacation away from the office. But it is super, super hard to do when you work for yourself, because not only do you need to pay for your trip, wherever you’re going or eating during that week that you’re not working, but you also have to pay yourself. You lose money being away from your office because we provide a service. So we’re trading hours for money, and that doesn’t always translate well to being able to pay yourself when you take a week off, never mind being able to actually go somewhere when you take a week away from the office.

So this is a trick that someone taught me years and years ago back when I was married, and my husband was a union electrician, and they didn’t get vacation pay. And I was like, “How do you make this work?” At the time I had a corporatey job; so I got a couple of weeks of vacation; so if I wanted to take a week off, then I didn’t take a hit on my income. And one of our friends taught us this trick. He’s like, listen, if your normal payday is Friday, or your normal payday is Thursday or Tuesday or whatever the heck your normal payday is, it stays the same every week, and if you look through the year, there’s typically two months a year where you will have five of those days in a month. So, let’s just assume you pay yourself on a Friday. If you look at the calendar for next year, there are a few months — and I’m looking at my notes now to find — I wrote them down — so March, June, August, November of next year all have five Fridays, I think. I’m just double checking that now. Yes. So if on each of those months you stash that fifth paycheck, that’s going to help you build up a savings to actually to be able to take a week off and pay yourself; so you can eat and maybe even go away and do something fun.

So this is not a perfect plan. However, we plan our monthly budgets, typically, on four weeks, on four paydays if you pay yourself weekly. If you pay yourself every other week, then occasionally it will happen where you’ll have that month were there’ll be three paydays instead of two. Sock that third paycheck away. But we plan our budgets, typically, on four-week months-ish. And most of our bills are due on a monthly basis-ish; so that gives us a little bit of a cushion. So having that — and I’m embarrassed that I don’t have a whole bunch more to say about it, but whatever day a week that you pay yourself, make sure that you’re keeping that religious every week or every other week. And on the month where you get that extra either fifth or third payday, sock — even if you only sock half of it away, that is hugely, hugely helpful in creating a little buffer-savings or actually creating vacation pay.

So before Michael and I talk a little bit more about other random vacation-pay strategies, let’s bounce over to our sponsor. Michael, who’s our halftime sponsor today?

MR Our sponsor today is ABMP.

AH Aw. I love ABMP.

MR We love ABMP; they’re the best.

AH We do! Associated Bodywork and Massage Professionals, and we are so pleased to have them as a podcast sponsor.

Sponsor message They are supporting the largest community in massage and bodywork, and ABMP goes above and beyond great liability insurance to make it easier for you to succeed at what you love. And that’s kind of what I want to talk about. I love all of the stuff that they offer on their website; they’ve got a really good website. They’ve got a whole bunch of discounts and partnerships to help you grow your business. They have a ton of online learning; that’s awesome. I’m also a big fan of their journal, Massage and Bodywork Journal, which I probably said the name — yes — no, Massage and Bodywork Magazine, pardon me. It’s great. I love getting my paper issue six times a year. I love that it’s available online for everyone in the world to read. I love that they have a blind and visually impaired version for those who need to read the content in a text-only format with all of the compatible visually impaired software stuff that’s out there. I love that they have that text-only mag; that’s really great. And you can check all of that out at their website and –I got to flip my notes. I was all excited and on the magazine page of their website and lost my place in my notes. You can go to abmp.com to see all of their super cool stuff and read their Massage and Bodywork Magazine online.

MR And ABMP is just good people.

AH They are just darned-good people

MR Yeah, just darned-good people.

AH So, Michael, talk to me about how you have handled vacation-pay stuff, when maybe you’ve got a less than regular income or not in a corporate structure where someone pays you vacation pay.

MR Yeah. I think you’ve hit the major points. One thing I — unless I spaced out when you talked about this. Did you talk about a separate bank account for it? I didn’t hear that part.

AH I didn’t.

MR I do like to do that. I like to — I’m a big fan — this kind of goes beyond the vacation-pay thing on its own, but I like having separate bank accounts for separate things. A lot of people say, “Oh that’s just silly; you don’t need to do all that.” Well, yeah, maybe on the surface it looks silly. As you know, I’m a big fan of Dave Ramsay, and I think you are sort of coming around to Dave Ramsay yourself as well; we’re kind of into some of the Dave Ramsay stuff, and he always says things like, “Personal finance is not about the math, it’s about the behavior.” If you were — the math is what it is. But to really win at money, it’s about behavior and encouraging your own behavior to kind of adapt to things that meet your goals specifically.

So an example would be if you take your vacation pay and just kind of dump it into a savings account that’s the same bank that you can transfer really easily. Or maybe you just leave it in your main account and earmark it. It’s really easy to spend it. It’s really easy to say, “Oh well I’ll just — there’s cash there; I’ll just grab it because I need to.” But if you actually keep it in a separate bank, there’s that two-or-three-day delay to transfer money; it kind of feels like it’s in a separate box; it’s in a whole walled-garden off from the rest of your money, and it’s really, really visually and conceptually set aside as truly separate money that is for a separate purpose. So a kind of life hack that I like to recommend for people is that if you are doing things like vacation pay or your emergency fund or your tax account or whatever it is, within reason, don’t be afraid to separate those into separate bank accounts at separate banks to kind of encourage you to have the right behavior in how you allocate and organize your money.

AH Since we’re jumping into this, I’m just going to go with it. That is a huge, a huge thing that helped me a great deal. And I came to that separate-account idea, not through Ramsay, but through another book, and I’ll make sure this is all in the podcast notes, it’s called The Money Book for Freelancers, Part-timers, and the Self Employed: The Only Personal Finance System for People with Not-So-Regular Jobs. And their very first piece of advice was separate accounts. And to the point where I actually decided that — I had been doing my personal banking at the same credit union where I had my business checking account and stuff, and I went and created a free bank account online through an online bank, and I had a checking account, and I actually have three savings accounts. And it was all free to set up; I don’t pay any fees. And every week, I pay myself from my massage business into my personal account. And then from my personal account it gets funneled into — it stays in the checking for bills I got to pay, and then I have a vacation fund, a, hopefully, condominium fund, and my emergency fund. So I stocked up my emergency fund. So it’s three separate savings accounts that are attached to my checking. And again, I’m not paying extra for any of these accounts; everything is free. And it really, really helps me. When that emergency fund is sitting there and fully funded, I don’t touch it unless there is really an emergency. And because it’s in a separate savings account, it visually separates it; it takes it out of my head. It’s not like it’s sitting in my checking account, and I’m seeing it thinking I have enough money to go to the movies and get a burger tonight. So to have those separate vacation and condo funds is also really important. I named it — so my big schtick is that I haven’t ever lived anywhere I haven’t rented; so I’ve never been able to get a cat. So it’s actually called my feline fund. Because I want to get a place to live, and I want to get a cat.

MR Nice.

AH Because I will not allow myself to get a pet when I’m still renting, because then it limits my options if I need to move. So I’m trying to be a responsible future-pet owner. It’s literally my feline fund. It helps me a great deal to whenever I make a little extra money or whatever, decide that money needs to go into that account, it goes into that account. But it keeps it separate and that’s a huge deal. And, again, I’ll put a link to this book which was really helpful for me. It’s just a variation of the envelope system, right, Michael?

MR Yeah. Basically. Yeah. Dave Ramsay recommends the envelopes, which is just put cash into envelopes and divide them visually that way. Which I hate because I hate cash; so it doesn’t work for me. But the concept is the same.

AH Yeah. So there’s that. This was real short and sweet episode, but I hope that it was somewhat inspiring to you to — what I really want you to know is that you absolutely can set up a vacation fund. You can absolutely cover your own vacation. And it also takes the stress out of it, and lets you enjoy your vacation a little more if you’re not feeling like you have to work a ton extra the week before and a ton extra the week that you get back to make up for lost money. That kind of sucks the fun out of vacation if two days before the end of vacation you’re already dreading going back because you know you’re going to have a seven-client day because you really have to to pay the bills. That kind of stinks. Funding your own vacation account, which you can absolutely do, is really helpful in creating not only a sustainable, but an enjoyable business to run.

MR Love it.

AH That’s it. I’m done.

MR All right. Awesome. Well, we’ll wrap up there then. So thanks, everyone, for joining us. We appreciate you being a listener. We’ve had, actually, a record last couple of months; so we’re on track to kind of see the same growth for 2018. So thanks for everyone who’s been a new listener; we appreciate that. And for our longtime listeners, we appreciate all your iTunes reviews and all the emails that you send us at podcast@massagebusinessblueprint.com. Our website is massagebusinessblueprint.com. Visit us there for more stuff. Again, we really appreciate you joining us. The community we’ve built is awesome; so thank you very much. And we will see you next time.

AH Bye.