Financial Planning for Hospitality Professionals

A career in hospitality is an exciting industry to work in that comes with many perks. Whether you work in a restaurant, bar, hotel, resort or cruise ship, you can meet people from all walks of life, travel to new places, explore diverse cultures, and so much more. 

Since hospitality is a fast paced industry and may require you to work nights, weekends, and holidays, you may not have time for personal matters like your own finances. But your finances can significantly affect the way you live your life and future, making it essential to prioritize them. 

Challenges of Financial Planning for Hospitality Professionals

As a hospitality professional, you have exceptional communication skills, the ability to multitask, and extensive knowledge on hygiene and safety. Where you may fall short, however, is financial planning. The good news is there are plenty of resources available to help you reach your goals. 

We’ve compiled this informative guide to help you on your journey to financial success. In addition, there are a growing number of financial advisors who specialize in helping hospitality professionals handle the unique financial planning challenges of your profession.  

We’ll help you understand the most important topics to consider and questions you’ll want to ask to create the best financial plan for your unique needs. By pairing this guide with support from a financial advisor, you’ll be on your way to achieving your short and long-term financial goals. 

Financial Planning for Hospitality Professionals

There are a number of topics to consider and questions you’ll have when you’re planning your finances as a hospitality professional. Here’s a brief overview:

Living Well on Hospitality Wages

Hospitality wages can vary greatly. If you’re a front desk clerk at a hotel, motel, or resort, for example, you may earn around the average salary which is $25,950 according to the Bureau of Labor Statistics. If you work as a lodging manager, your earnings may be higher as the average salary is $54,430. If you’re a meeting, convention, and event planner, you may make about $50,600 per year. You may also be an hourly employee that earns most of your income through tips. 

As long as you set a budget and stick to it, you can lead a comfortable lifestyle. You’ll need to prioritize your wants and needs so you have enough money for the possessions and experiences that matter most to you. 

Here are a few questions a financial advisor can help you answer to make the most of your income in the hospitality field: 

• How much should I have saved today in order to retire comfortably at my desired retirement age?
• If I don’t have enough saved today, what steps can I take to get on track?
• What financial planning insights have you gained working with other hospitality workers like me?

Repaying Your Student Loans 

While many hospitality jobs don’t require a college education, many hospitality workers have attended a technical school or graduated with an undergraduate or graduate degree. The type of degree you’ve earned and college you attended will determine how much student loan debt you need to repay. Since student loans can hold you back from meeting other financial goals like buying a house or retiring, it’s important to design a feasible repayment plan.

Depending on your situation, it may be in your best interest to pay off your student loans as soon as possible or focus on other payoff goals instead. A financial advisor can help you figure out the best option for your situation. 

Making the Most out of Your Hospitality Employee Benefits

Where you work as well as the nature of your position will dictate the employee benefits available to you. You may be eligible for health insurance, a 401k plan, sick pay, and paid time off. In addition, you might qualify for tips, bonuses, and free or discounted meals and hotel stays. 

If you work in a restaurant for more than 40 hours a week, you may also receive overtime pay. And we can’t forget potential freebies like tickets to concerts, special events, trips, and more.  When you meet with a financial advisor, you’ll discuss how to make the most of your employee benefits. Examples of questions a financial advisor will help you answer include:

• How much of my income should I invest in each of the retirement and savings plans available through my employer to maximize my benefits?
• How should I allocate the investments in my retirement and savings plans?
• How should I manage my tips?
• Are there special considerations about my overtime pay when it comes to my benefits?

Buying a House as a Hospitality Professional

If you’re a salaried hospitality professional with a consistent paycheck, you shouldn’t have any significant issues getting approved for a mortgage. However, if you’re an hourly employee and work inconsistent hours that cause you to earn a fluctuating income, it may be more difficult. 

A financial advisor can help you figure out what type of mortgage makes the most sense and increase your chances of approval. In addition, they can work with you to come up with a housing budget that allows you to live the life you want while still setting you up to meet other financial goals. 

You don’t want to end up in a situation where you buy more house than you can afford and have to work a lot of overtime or pick up another job or more shifts just to cover your housing expenses. 

Saving for Retirement as a Hospitality Professional

You may save for retirement through a 401k plan, as long as your employer offers one. You’ll have the option to deduct as much or as little as you’d like from each paycheck. If you’re lucky, your job will match your contribution so you can maximize your retirement savings. 

No 401k plan? There are other options available. You can open up a Roth IRA or Traditional IRA and save for retirement that way. Your lifestyle and preferred retirement age will help you figure out how much you’ll need to save.

When you consult a financial advisor, you’ll work together to design a strategy to help you retire when and how you’d like to. You’ll receive answers to questions like: 

• How much do I need to save to meet my preferred retirement lifestyle?
• Where should I keep my retirement savings?
• What is my long-term investment strategy?

Expenses and Deductions: Keep More of Your Income

Fortunately, there are deductions that can help you save on taxes as a hospitality professional. If you travel between different jobs because you’re a caterer, for example, you may be able to deduct car expenses. 

You may also deduct money for attending special courses, training, or seminars that are related to your particular line of work. In addition, if you wear a uniform or protective items like a face mask or gloves, these expenses might qualify for a deduction as well. 

If you work with a financial advisor, they can help you address questions such as: 

• Does it make sense to take the standard deduction or itemize?
• Which deductions am I eligible for as a hospitality worker?
• Is it better for me to be a 1099 contractor or a W2 employee?

Your Insurance Needs as a Hospitality Professional

If you have a salaried hospitality job, you might receive health insurance through your employer. In the event your position is hourly or a contract role, you’ll likely be on the hook for your own insurance. You’ll need to do your research and find the ideal plan for your health needs and budget. 

You can trust a financial advisor to help you understand the difference between various plans like HMOs, PPOs, and HDHPs. Additionally, they may uncover other insurance needs on your behalf. These may include life insurance, car insurance, and long-term care insurance. 

Financial Planning is a Necessity

A solid game plan for your finances is the key to a happy, fulfilling lifestyle. Therefore, it’s important to occasionally put your focus on customer service and others needs aside so you can concentrate on your own finances and personal needs. Financial planning can help you alleviate financial stress and achieve security in the hospitality industry, which is very susceptible to economic downturns. 

Enjoy a Secure Financial Future 

As soon as you begin your journey to financial security, you’ll gain some much needed peace of mind. You can ensure your hard work in the hospitality industry pays off and allows you and your family to live the life you’ve always wanted. Your only regret will be not prioritizing your finances sooner.

How To Find The Best Financial Advisors for Hospitality Professionals

While you may find a great financial advisor to work with through the referral of an acquaintance or whose office you drive by on your daily commute, it’s important to consider several factors to improve your odds of hiring the best financial advisor for your individual needs.

As a hospitality professional, you may decide the best financial advisor for you is one who specializes in understanding the unique financial planning challenges and opportunities common among hospitality workers. These specialist financial advisors may hold credentials that demonstrate their expertise along with considerable experience working with clients in the hospitality sector that could benefit your own financial planning needs.

Because many financial advisors can work with you online, you’re not limited to hiring a financial advisor in your neighborhood when the best financial advisor for you may live hundreds of miles away.

In other words, whether you choose to hire a financial advisor who lives near or far, it may be most important to hire a financial advisor who truly understands your individual needs based on their education, experience and commitment to helping people just like you.

In 2021, you’ll find a growing number of financial advisors on Wealthtender who serve hospitality workers, including advisors specializing in working primarily with hospitality professionals.

FAQs

The Best Finance Blogs and Podcasts for Hospitality Professionals

With over 300 personal finance blogs and financial podcasts featured on Wealthtender, you’ll find several that regularly publish articles and episodes with financial planning insights useful to hospitality professionals.

We’ve also curated a list of popular blogs and podcasts for hospitality professionals offering articles and interviews on a range of topics including financial and career advice:

• 20 Hospitality Blogs You Should Be Reading
• Hospitality Academy Podcast
• The 7 Best Hospitality Industry Podcasts

Do you have a favorite blog or podcast for hospitality professionals not featured above? Let us know in the comments section below or by email at yourfriends@wealthtender.com.