Beauty Professionals and Financial Literacy

Erin Kuhn

President, Qnity

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Daniel is very, very hard to follow, so I just want to say, thanks so much to Oozle Media for putting on this amazing event and for all of you joining. I’m looking at the clock here to make sure I can be super respectful of everyone’s time, so I really want to make this interactive. I don’t just want to come on here and talk to you.

Money & Finances

I really want to ask you a couple questions throughout this session, so please just do me a favor and type in the chat box so I can follow along with you, but I have a question for you. What is the first thing that comes to mind when you think of money or finance? I want you to think about that for yourself first, regardless of what role you’re tuning in from, and type it in the chat. So I want to see a couple of answers, and then I’m going to ask… “Fear, interest, ugh. Knowledge and power, stress. Stress. Stress.” How interesting. So if anyone else wants to type… “Life,” okay, great. That’s a great answer, Jessica. “Stress, not enough.” Wow, fascinating, right?

What Do Your Students Think?

My next question is what would be the first word that comes to mind when your students think of money and finance? Put your hat on from a student perspective. “Debt. Same.” Okay. “Panic, debt, confusion.” Look at all these words. Those are pretty emotive words and thought-provoking words.

So I’m going to show you on my screen here. This is directly from our pre-program survey that all students take before they start our financial literacy curriculum that Chris spoke about. So here’s the words that come to mind when we ask students to think about those first words: “Hard, headache, stress,” I saw that a lot in this chat box. My favorite one is “nothing.” I don’t know what that one means, but that’s my favorite word that came up here. “Scary, accounting, difficult, complicated.”

So those are again, really, really impactful words, and what I do not see here is, “Prosperity, joy, help me provide the life for my family, help me live my professional and financial dreams.” And so somehow we really need to change this. And everyone in this segment here and everyone really on this call really, really believes in the power of education. And so really, how we change that starts through education.

What I do not see here is, “Prosperity, joy, help me provide the life for my family, help me live my professional and financial dreams.” And so somehow we really need to change this.

So knowing those words that I just shared with you and looking at this little squiggly head. If you were to ask your students, do you have a sense of fear, angst, or dread when it comes to money? Or do you have some form of math anxiety or money anxiety? What percent do you think would say yes? If you would look at your student population or if you are a student tuning in here, you can reflect from it from that perspective. What percent do you think would say yes?

So says 80 to 90. 85, 90. Okay. So very, very high numbers. So we’re going to talk about that here, but really the essence of this session and really what we’re trying to do at Qnity is to help provide a simplicity instructor, to help people eliminate the fear so they can have greater success when it comes to money.

Starts With Simplifying

That really starts with simplifying and so you all just guessed some of those numbers, 80, 90, 50, 75. We found at our current statistics based on the surveys, it’s over 60%. So right now the last I checked our survey… We always have new students coming in… It was 68%. So either way, that is well over half of students have some form of math or money anxiety, and go ahead and type in the chat box what is the first thing that happens when you feel anxiety around something? What is the emotion that you do when you feel anxiety? Do you run towards it? Do you tackle it? “You shut down.” Love it. “Block.” Okay.

Lack of Financial Literacy

So some of those words, Chris just shared a little bit about my story, so I’m going to keep that very brief, but what I want you to know and… Interesting, Calos said, “Tackle it.” What I want you to know here is what I’m bringing to you today also comes from our work in the professional space because of this lack of financial literacy that we see and this fear around money. This angst around money really also shows up in the professional space. We really believe the place to start to conquer that and the place to start to change that really can and should start within the schools.

What I want you to know here is what I’m bringing to you today also comes from our work in the professional space because of this lack of financial literacy that we see and this fear around money. This angst around money really also shows up in the professional space.

What Chris also spoke about is really helping people go from knowing to doing and part of what we believe at Qnity, and what we’ve done in the professional space with salon, spas, med spas, and their teams is really help them provide simple and visual tools to help enable them to go from knowing to doing. So in our curriculum, and what we do in our work with students is help them provide tactile tools to help them move them into a state of knowing to doing.

Financial Literacy Pillars

I’m just going to look at my time here. For our agenda today, just what we’re going to go through is what is financial literacy? I’m going to give you some specific definitions. Why does it matter? We’re going to go through eight core financial literacy pillars. I’m going to take you through one pillar, just a few quick tips on it, and then I’m going to give you some actionable takeaways for what’s next.

The First Component

The first component is what is financial literacy? Go ahead and type in the chat box if you’ve got your own definition, or if you can intuitively bring a definition to the table around this, but take a guess in the chat box. I’m actually going to populate it on the screen here as well.

So this is going to be quite wordy and I’m just going to highlight a few key takeaways that I’ve put in bold. Financial literacy is just simply having the skills and having the knowledge to confidently take action to fulfill your goals. Really, that’s what we’re simplifying it here to.

It’s really just making sure students have basic skills, basic knowledge on their financial matters so they can take action to fulfill whatever their financial dreams are. And that extends into their professional life, their family life, and their community goals as well and the source for this is the National Financial Educator Council, which we are a member of.

And so knowing that definition, how would you rate your students’ financial literacy on a scale of 1 to 10? 1 is terrible. 10 is no room for improvement. Terry says one. Okay. So, “four to five,” Jessica, thank you so much.

So what we found in our surveys, most students… “Five,” Emily, you actually won. That is kind of where we’re at. It’s between four to five right now. Interesting. Jessica S says, “Eight to nine for current financial literacy.” How interesting.

“It’s really just making sure students have basic skills, basic knowledge on their financial matters so they can take action to fulfill whatever their financial dreams are.”

Shaping the Future Generation

So what we have found it, it is very much on the lower scale. And so again, looking at between four to five is what we’re finding in our student surveys. And so what we’re really looking to do… And I love this photo, this is of my little nephew. And what this is about is really about shaping the future generation. If we know that most beauty and wellness professionals state they have some form of fear, angst or dread when it comes to money… Most people fear… These, again, are really emotive words… How can we change that into a sense of curiosity and how can we adequately prepare them when they’re actually in school before they’re entering the workforce?

Frankly, what we’ve seen working in the professional space is once we have students that are already turned professionals and eventually becoming business owners, it’s a lot harder to change those habits than it is to equip them with the right habits before they actually graduate.

Why it Matters

So really why does this matter? It’s fairly intuitive why this matters, but I want to give you some more statistics to really think about. Knowing all of those things, on a scale of 1 to 10, how important do you think it is for students to understand financial literacy? How important do you think it is for your students to understand? Okay. I see an 11. Okay, so everyone agrees that this is tremendously important.

Now, do you think students agree that this is tremendously important? That’s my next question. Can you say yes or no? “No.” Interesting. Okay. So let me show you the results. This is also what was asked in our survey. Two students, directly, on a scale of 1 to 10, how important do you believe it is for you to understand finances and money? Well over a nine. So students fear it, yet they understand it’s important.

And so they understand that it’s a critical component to having a long and successful career in their craft of choice. A couple other nuggets in terms of why this matters is four in seven Americans report being financially illiterate, meaning they report being unable to properly manage their finances. So that’s once again, well over half.

This is a very, very widely referenced statistic. You’ve probably seen it in many spaces. Research suggests over 70% of Americans live paycheck to paycheck, according to the American Payroll Association, meaning with one missed paycheck, it puts the majority of people into a state of financial crisis. We do not want our students living that kind of life.

“Research suggests over 70% of Americans live paycheck to paycheck, according to the American Payroll Association, meaning with one missed paycheck, it puts the majority of people into a state of financial crisis.”

Beauty and Wellness Ecosystem

And so again, really recognizing we are part of a greater ecosystem in the beauty and wellness industry, and so everything is really interconnected. I want to give you an example of how this lack of financial literacy actually impacts a professional. So when your students are actually in the workforce, how does this impact them? I’m going to play you a short video and if you could all just give me a thumbs up or a good in the chat box, so I know you can see it that would be great.

Alex’s Story

Meet Alex. Alex was a service provider working as an employee or what we call an entrepreneur being paid on commission. After several years with her current company, she was making 40% commission. All she could think about was the fact that her employer was keeping 60% of the money she earned. She decided to go into business for herself. She didn’t intend to have any employees so she was a solopreneur. Just her running the show and keeping all the money. So she thought.

She signed a lease to rent a space, gave her notice to her employer and told her clients about the move. She had some money saved and knew it would cost a bit to get started and to buy supplies and equipment. Alex quickly realized that she seriously underestimated what it would cost to be in a business for herself.

Every time she turned around, there was another expense popping up. From taxes, license fees, insurance, booking software, products, supplies, accounting, furniture, website, more taxes. The list went on and on. Before going out on her own, Alex didn’t understand a business PnL. She had no idea just how many expenses her former employer was paying with the 60% of her services they were keeping. She now knew the company was definitely not keeping the other 60%.

Analyzing Alex’s Experience

We saw an example of how this lack of financial literacy can extend and impact in the workplace. So looking at Alex, she looked at one part of the financial equation. Thinking about, “Yes, more money,” but what she failed to consider was how this changed with the business PnL and how the money out aspect came into play here, because she lacked some critical financial literacy skills that would’ve helped her be prepared and understand that.

And so, again, it’s just looking at one component, money in versus money out and really not taking that all into the equation and we’re seeing this in the professional space every single day. Some of these changes that are happening and how that actually impacts employers, which brings us to the next component.

“It’s just looking at one component, money in versus money out and really not taking that all into the equation and we’re seeing this in the professional space every single day. “

Our Next Component

For how this impacts Alex’s employers is first of all, the employer lost a great employee. They lost the training and development that went into Alex’s training. This employer also is at risk of losing all the clients if Alex leaves unethically and takes her clients and now they’re responsible for replacing Alex, which according to Gallup, replacing the salary of an employee, of course it ranges very dramatically based on industry, but it can range to half to up to two times that employee’s annual salary.

So this really, really impacts employers and salons and spas, and many of the small businesses in this space. And we know that this is having a greater impact on the industry, because we’re seeing a migration to solopreneurship.

Beauty Changes Lives

And so a couple more industry statistics for you guys on how this really shows up is one of the organizations that we are a very, very proud partner of is Beauty Changes Lives, and this is an organization that seeks to make pro-beauty and wellness a first choice career. They’ve found there are over 1 million vacant job positions in this industry, 1 million vacant job positions.

And so what they’ve also found in partnership with Unite As One is what the industry is missing is what’s referred to as career employees, which means career employees work in the industry for a minimum of five years and work a minimum of 30 hours a week. So we’re finding people either drop off at that point or work on more of a part-time basis.

A Change in Financial Perspective

There’s a lot of different questions we can ask. Why are we missing career-based employees and there’s a lot of different reasons. I think one component and one thing that we can really start to change by really changing the financial literacy is if you just go, and I’m focusing on cosmetology just for time purposes, but you can see the average salary of a hairdresser. It’s not super compelling.

We also know this isn’t the full picture. There’s a lot of things at play, but we have to start to change the reality and elevate financial literacy because it will move all the key money metrics that will help enable your students turned professionals to live more prosperous careers and enjoy a long and prosperous career in their craft of choice as a career employee.

8 Core Financial Literacy Pillars

I’m going to give you eight core financial literacy pillars to cover. And that we really cover in our financial literacy curriculum in order of importance. We really put a lot of specifics around when we teach these orders because we don’t want to start with taxes. When we’re working with students, we already know there’s a sense of fear and angst and dread when it comes to it.

1.) Money Mindset

Number one is helping to start and shape students’ money mindset from the start and really making sure that they have a proper understanding and mindset of what it means once they actually graduate. How they will make money, what their money story is, and also help them dispel many common myths and traps that many beauty and wellness professionals get into.

2.) Money In

Next is how they will actually make money. Helping them to really understand how to actually increase their earnings and how to actually make a living and understanding that it’s not going to happen right away.

And also understanding the different types of preneurs they can become. We teach three core types of preneurs:

• An entrepreneur, which is a business owner with a team
• An intrapreneur who is a business within an existing business
• A solopreneur who is a business of one,

So really helping them to understand how their financial reality will change depending on that type of preneur.

3.) Money Out

Next is money out, helping them to set specific spending benchmarks and understanding the basics of a profit and law statement, what it means for them as an individual and also what it means to run a business with a profit and law statement.

4.) Money Borrowed

Next is money borrowed, which really helps students understand how they will actually pay for their student loans once they graduate, how will they address any debt, what is the true cost of debt, and what does it mean to really borrow money?

5.) Money Saved

Next is helping them to understand how to grow their money and really how to make their money work for them. And so that’s all about saving money and helping them understand various investment vehicles to make their money increase over time.

6.) Money Taxed

Next is the good old taxes, people’s favorite module, but very, very important in this industry and really understanding how taxes change depending on what type of preneur you are. Also, the difference between gross and net, you would be shocked by what we see in the professional space.

The vast majority do not understand the difference between gross and net and how to actually read a paycheck. By the way, a lot of people, not just our industry, don’t understand those differences, but really teaching how to actually read a paycheck.

7.) Money Plan

Building out a money plan which really just helps them to find their visual definition of prosperity and make their money work towards their own unique dreams. Then really tying it all together for greater financial success.

8.) Money Success

That is a very quick overview of the money curriculum. I am going to show a couple of things, because I am looking right at time, so I am going to pause my screen. I am going to show you one last thing before I wrap up, but to answer that question, each of these modules really range in time frame. The full program, depending on your delivery, can be between 20 and 40 hours.

Money Why

The first pillar we really want to start here is helping students to understand their “money why” and really recognizing and preparing them. When they leave, they can achieve whatever their financial dreams are, but really make it inspirational. I listed 8 core money why’s that we really talk about in the very first module of this program. Really understanding everyone’s “why” is different and everyone’s “why” changes overtime.

Whether it’s financial independence, which for many students it will probably be financial independence, making sure they can maybe move out of mom and dad’s. Again, really depending on where they are at in their Journey. Freedom from worry. That is a huge one I just presented at Beacon and that was hands down the number one for many of these Beacon students. But also their future and really recognizing that everyone’s “financial why” is different. So I am going to skip this for time.

Really understanding everyone’s “why” is different and everyone’s “why” changes overtime.

Your Financial Why

I want you to think about what is your own “financial why?” How can you incorporate that and really share it with your students? I also want to just showcase this one last statistic for you. We know that the majority of students identify as visual learners. Look at the statistics. Well over 90% of students and people identify as visual or learn by doing learners. Really incorporating visuals into the classroom to really start illustrate this conversation to help them visually showcase their dreams and their “financial whys.” So we do that through a variety of tools at Qnity and really help them to use their hands to shape their unique definition of prosperity.

Well over 90% of students and people identify as visual or learn by doing learners. 

Qnity Curriculum Opportunities

I am going to kind of skim through this. I am right at time, so I want to kind of just fly through this last one here, but you can click this QR code quickly and we will draw a few submissions and hand out some Qnity tools. If you like and comment on our most recent post, we will make sure to hand out some tools and pick some out at random, but I want to leave you with a few takeaways for what’s next.

Financial Definition of Prosperity

I talked about those 8 core pillars, but I think the biggest one to take away to start with is to start to have that conversation with your students about their “financial why.” Really help them start to think it’s not just about doing hair. It’s not just about doing nails or esthetics, right? They have to have a financial reason that can help them move toward their financial definition of prosperity.

Money by Qnity

We have this curriculum which is called money by Qnity, which I pulled that short video and a couple nuggets from and really this honors the fact that we are working with a visual learner. We would love to have you as a Money by Qnity school and I will give you my information in the chat box here, but I am also going to give you a chance to enter to win 10 free seats to this curriculum, so we will be giving away and selecting winners from this to give uniquely for this Beauty Industry Summit.

Go ahead and scan this QR code. Enter in your details and we will pick a couple of winners to be able to enter. I do believe Parker is entering that in the chat box, so with that I know I was just one minute over, so I will stop. Thank you so much Chris for having me and for arranging this to the full Oozle Media team. This is a fantastic event, so thank you so much!