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How to Save and Budget Money as a Server

How to Save and Budget Money as a Server
Chris Alexis
Chris AlexisUpdated May 7, 2025
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Working as a server can be a great way to earn a living. However, servers typically rely on tips for the majority of their income, which can make budgeting and saving challenging. Whether you're looking to pay off debt, save for a big purchase, or just want to be more financially responsible, here are some tips to help you budget and save money as a server.

Estimating Your Income

When your income fluctuates from day to day and week to week, it’s important to get a sense of the big picture. You can do this by tracking your earnings for a couple of months and then calculating your average weekly or monthly income. Here’s how: After each shift, count your cash and charge tips, plus any hourly base pay you earned, and write it down in a journal or on a spreadsheet. Do this for eight weeks, then total it and divide by eight. This will give you your average weekly income. You might choose to do this again for the next eight weeks to come up with a more accurate average monthly income.Estimating your income will give you an idea of how much you can afford to spend each month and help you better manage and budget your money. Keep in mind, though, that you will have to set aside some of your tip money for taxes (more on that below).

Estimating Your Expenses

Once you have a better idea of your income, it's time to estimate your expenses. This will give you a sense of how the two are lining up and help you set up a spending budget.To estimate your expenses, grab the last several months of statements from your checking account (for a more detailed look at spending, you may also want to look at your credit card statements). Make a list of what you’re spending each month on essentials (like rent, utilities, transportation), as well as discretionary items (like eating out and entertainment). Come up with an average for total monthly spendin, as well as average spending in different categories.If your average monthly spending is the same as or higher than your earnings (meaning you’re not saving anything), you’ll want to find places to cut back. For this, you can look at your discretionary expenses. You may immediately see ways to save, such as ditching a streaming service you no longer watch or deciding to cook one or two more times per week instead of getting take-out.Recommended: What Are Some Examples of Monthly Budgets?

Managing Incoming Cash

Unlike other types of employees, you may receive much of your earnings in cash, which can make it difficult to keep track of your income and spending. However, there are a few things you can do to manage your incoming cash effectively.One is to deposit any cash income into your bank account on a regular basis. This will help you keep track of your earnings and also help you avoid spending the money before you have a chance to budget it effectively. Another option is to use the envelope system of budgeting. How it works: You take several envelopes and write an expenses category on each one (such as rent, food, or entertainment) and put a portion of your cash tips into each envelope based on how much you’ve budgeted to spend for that month. This can help you stay organized and avoid overspending in any one category. Recommended: 8 Budgeting Apps for Couples 

Saving Money as a Server

As a server, you may have irregular income, so it's important to set aside money for emergencies, unexpected expenses, and taxes. Here are a few tips for saving money as a server.

Setting Aside 10-15% of Cash for Taxes

It's key to remember that you will likely owe taxes on your tips. To make sure you have enough money to cover your tax bill at the end of the year, you’ll want to set aside at least 10-15% of your cash tips for taxes. 

Depositing Large Denominations and Paychecks

If you receive cash income in a range of denominations, consider depositing all of the larger bills — $20s, $50s, and $100s — into your checking account and using them to pay rent, utilities, and other fixed expenses. You may also want to get in the habit of putting your base paychecks right into your savings account. This is one way to automate your savings. Even if the checks are small, the balance will grow over time, especially if you choose a high-yield savings account.

Paying Day-to-Day Expenses In Cash

Consider using the $5 and $10 bills you collect from tips to pay for everyday expenses, such as grabbing breakfast out and entertainment. Generally, you can feel the impact on your wallet more when you use cash than when you just swipe a card. Plus, paying with cash can help you save money on fees and interest charges associated with credit cards.Recommended: What is the 52-Week Savings Challenge? 

The Takeaway

As a server, budgeting and saving money can be a challenge, but it's not impossible. By estimating your income and expenses, managing your cash tips, and saving a portion of your income for taxes and future expenses, you can take control of your finances and work towards your financial goals. Remember, small changes can add up to big savings over time, so start making changes today and watch your savings grow.If you’re interested in finding the best rate for your savings, Lantern by SoFi can help. With our online banking marketplace, it’s easy to compare high-yield savings accounts based on annual percentage yield (APY), fees, and balance minimums.Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

How do servers keep track of money?
How much should I save for taxes as a server?
What percent of tips do servers have to claim?
Photo credit: iStock/alvarez
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About the Author

Chris Alexis

Chris Alexis

Chris Alexis has been putting pen to paper and fingertips to keyboard since his youth. He ultimately grew into an accomplished and award-winning writer who loves using the power of language to connect with audiences. He also strongly enjoys learning about who he is writing for so he can create something that will truly resonate with them. He has worked for a variety of companies, each of which have given him more experience and insight.
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