Money Management for Personal Trainers
As a personal trainer, fitness instructor or coaching professional, managing your finances can be challenging, especially if you are new to the industry. However, creating a budget and allocating your paycheck properly can help you achieve your financial goals and secure a stable or even prosperous future.
Here are some tips on how to allocate your paycheck effectively as a personal trainer or coach.
How to Determine Your Monthly Expenses
Before you can allocate your paycheck, you need to determine your monthly expenses. This includes rent or mortgage, utilities, transportation, groceries, insurance, and other bills. Once you have calculated your monthly expenses, review them regularly to ensure that you are staying within your budget. You may need to make adjustments if your expenses increase or decrease.
If you are a self-employed trainer or coach and need to track business expenses as well as personal expenses, using accounting software, such as QuickBooks or Xero, can simplify the process of tracking and managing your monthly business expenses. These tools can help you categorize your expenses, track your income, and generate reports to help you analyze your financial data.
Check out this list of Financial Management Apps
Why You Should Set Aside Money for Your Taxes
As a self-employed personal trainer, you are responsible for paying your taxes. This means that you need to set aside a portion of your paycheck to cover your tax obligations. Typically, it’s recommended to set aside at least 25% of your income for taxes, but this can vary depending on your location and tax bracket. Consult with a tax professional to determine the exact amount you need to set aside for taxes.
To learn more check out this article on maximizing tax deductions as a personal trainer or coach.
The Importance of Saving for Emergencies
According to a new Bankrate survey, nearly half (49 percent) of U.S. adults have less savings (39 percent) or no savings (10 percent) compared to a year ago. Emergencies can happen at any time, and having an emergency fund can provide you with a safety net when unexpected expenses arise. Ideally, your emergency fund should be able to cover at least three to six months of your living expenses. This can help you avoid going into debt or relying on credit cards.
Prioritize Paying Off Debt
If you have debt, such as credit card debt or student loans, it’s important to prioritize paying it off. High-interest debt can accumulate quickly and become a burden on your finances. Consider creating a debt repayment plan and allocating a portion of your paycheck towards paying off your debt. There are several types of debt repayment strategies that can be successful in helping you pay off any high-interest debt including the Snowball Method, Avalanche Method, debt consolidation, balance transfers, and a debt management plan (DMP).
Saving for Retirement
It’s never too early to start saving for retirement. Tax-advantaged accounts, such as IRAs and 401(k)s, can provide significant tax benefits for small business owners. By contributing to these accounts, you can reduce your taxable income and save for retirement at the same time. As a self-employed personal trainer, you may not have access to a 401(k) retirement plan through your employer, but you can still open an individual retirement account (IRA) or a Simplified Employee Pension (SEP) IRA. These types of retirement accounts offer tax advantages, and the earlier you start contributing to them, the more time your money has to grow.
Investing can be complex, especially for small business owners like trainers and coaches who are also managing the day-to-day operations of their businesses. You may be inclined to take risks with your investments, but it’s important to avoid jeopardizing your financial future. Be sure to research any investment opportunities thoroughly and understand the risks before investing. Consider working with a financial advisor who specializes in working with training and coaching professionals. They can provide guidance on managing your investments, diversifying your portfolio, and balancing your personal and business finances.
Why Trainers Should Invest in their Business
As a personal trainer, investing in your business can help you grow and increase your income. This can include investing in equipment, marketing, and continuing education.
By investing in your business, you can attract more clients and increase your earning potential.
Creating Room for Discretionary Spending
It’s important to allow yourself some discretionary spending, such as entertainment or eating out. This can help you maintain a healthy work-life balance and prevent burnout. However, it’s important to be mindful of your spending and make sure it fits within your budget.
The field of personal training offers a diverse range of career opportunities for fitness professionals, but often also requires your financial due diligence. Whether you’re interested in working with individual clients, leading group fitness classes, or managing a fitness center, there’s a personal trainer job that can match your skills and interests. By pursuing additional education and training in specialized areas of fitness, you can expand your career options and build a rewarding and fulfilling career in this dynamic industry.
Click here to get started with the NCCA-accredited NESTA Personal Fitness Trainer Certification.