Personal training is the type of job that fluctuates in income because clients go on vacation, they get sick, and they sometimes quit. Until you obtain new clients or unless you have a waiting list, your income is affected; in this industry financial planning and tracking income is vital.
You can make more money by monitoring what you earn. Just like you have clients track their workouts and record meals. Cultivating awareness is a powerful tool for meeting goals. I like to call it money mindfulness in this case.
By getting a grasp on what’s going on in your bank account before your paycheck comes and before you check your statement you’ll be ahead of the game.
Benefits of Tracking Income
- Lower your stress level. When you know exactly what you are earning each week you can relax on slower weeks.
- Know when to boost marketing efforts. When income is lower in a particular week or month then it’s time to network, call old clients, and bring in more business. This may seem intuitive but it’s a lot easier to complain than during a slow week. Especially if you don’t have a marketing plan.
- Make decisions more strategically. By monitoring trends in your business and tracking income and expenses, you can know what time of year is better to go on vacation or leave town for a conference.
- Distribute money wisely. When you know what you are earning, what your financial goals are, and what your financial needs are you can spend money on what’s most important first (food, gas, rent) and feel good about using the leftovers for lower priority (but usually more fun) expenditures like new clothes or vacations.
- Raising your rates. Comparing what you earn to what your expenses are helps you set your rates accordingly as an independent contractor or make a case to your employer if you’re an employee.
The Best Approach for Tracking Income
I suggest keeping track of per session or hourly pay. It gives you a close relationship with the value of the sessions you are doing.
You probably know that the dollar amount your clients are paying per session is not what you’re taking home. If you’re an independent contractor you have gym rent and taxes to factor in. You also have certification costs, continuing education, licenses, and marketing expenses. As an employee, hidden expenses are not as much of an issue, but the number on your paycheck still might fluctuate from week to week – making this habit of tracking a good one for you also.
Total the number of sessions you do each week in your appointment book, on a spreadsheet on your computer, or by using an app. Multiply that number by your take-home pay (by subtracting taxes and rent).
Income example: If you charge $50/hour and pay $10/session for gym rent, you keep $40/hour. After the average tax amount of 20% (0.20 x $40) you are keeping about $32/hour. Say you completed 15 sessions this week. 15 x $32 = $480. That’s quite a bit different than 15 x $50 = $750 or from not knowing at all.
If you know your monthly income needs are $2,000 then you know you are a little more than 25% to meeting your needs and know not to spend too much above your basic expenses until you have a better picture of your monthly income.
Calculate Your Income Needs
Tracking income on a weekly or monthly basis allows you to compare it against your expenses – which should be fairly consistent. Each month you’ll either be ahead or behind. It’s not until the end of a few months or the whole year that you’ll see the big picture. But, keeping track monthly is how you get started. Even if you’re a personal trainer employee income might change from paycheck to paycheck.
The Big Financial Picture
Use your income information to motivate yourself. When income is lower on a particular week or month, spend more time marketing, networking, or calling old clients to check in. It’s important to continue your education, but don’t get caught in the learning trap as a marketing strategy. Education will invigorate you and set you apart from the competition but it won’t earn you new clients unless you also do some marketing.
Tracking income over the weeks and months of a year will help you cultivate better money habits. The more aware you are of your specific financial habits, the healthier your relationship with money becomes.