Tips for Saving Money When You Get Paid in Cash

Grabbing a drink (or nine) with friends after a brutal restaurant or bartending shift is hard to resist, especially when you leave work with a lot of angst and a fistful of cash. But waking up broke the next morning—and hungover as hell—is no way to get ahead.

No one knows this better than Nikki Lopez, a 27 year-old former waitress in Fort Lauderdale Florida who now works as an information technology recruiter. “It’s hard to save when you live off of cash tips,” says Lopez, who says she often spent much of that money partying after work.

Tavis Hom, a 20-year-old college student studying computer science who works part-time as strip club valet in Florida, says the reason he doesn’t put more money in the bank—even though he makes $250 in cash tips on weekends—is because he likes having cash on hand for more practical purchases during the week. “I like to have easy access to cash in case I need it to buy books or grab lunch with friends,” he said.

Receiving the bulk of your pay in tips can be a recipe for spend-a-thon. “The money is just there for the spending,” said David Rae, a certified financial planner in West Hollywood, California.

Saving money was especially tough for Lopez. “The location where I worked was filled with bars and restaurants so when everyone got off shift, it was too easy to go to another bar for drinks. Then you are spending your cash on food or an Uber and you ultimately never can get ahead,” she said.

It doesn’t help that people whose jobs pay cash often make very low base wages—$2.13 an hour on average, according to Department of Labor data. And while paying for items in cash can help reduce your spending, compared to paying with a credit card, “if you make most of your money in cash it never ends up in the bank,” Rae added.

If you get paid in cash, you need a system for saving. One approach is to set a certain amount of money aside after each shift for essentials like rent and food. Even stashing that dough in an envelope until you have time to deposit it can help you resist the urge to spend it. “When I worked in a restaurant, I’d put the cash in a separate wallet after my shift ended so I wouldn’t touch it when I went out,” said Kylie Jester, a 26 year-old graduate school student at Nova Southeastern University in Florida.

Another trick? Deposit tips into your bank’s ATM immediately after your shift if you work late. Kaitlyn Rhyneer, a 17 year-old waitress from Festus, Missouri says she has saved $3,000 in less than two years with this approach. “I always deposit all my money into a savings account,” she said. “Then I transfer enough to keep a $100 balance in my checking account so I can still shop with friends or go out to lunch.”

Lastly, set a little money aside money for emergencies using automatic transfers from your checking to your savings account. Three to six months living expenses is ideal, but even $500 can help get you out of a jam. If you move just $25 a week into a savings account, you’ll have $500 saved in less than five months.

“Setting up and regularly funding an emergency savings account is also recommended to get you through the slow times or seasonal periods,” said Jocelyn Wright, assistant professor of women’s studies at the American College of Financial Services. And if you’re getting paid in cash, chances are there are plenty of slow periods where that financial cushion will come in handy.

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