3 Money Terms You Should Know

Ever consider what would happen if you woke up and couldn’t walk?

Who will pay your bills? how will your clients get taken care of?

What if your out for more than a couple months or worse forever?

These are fucking terrible things to think. Human nature errors on the side of “I’ll get that, eventually” or “UGH, I know I need to start, I will soon”.

Well let me tell you, this shit happens when it’s least expected. I know because it happened to me…


Story time with Krista:

One shitty rainy fall morning right before Halloween in 2013 I woke up, rolled out of bed and couldn’t stand. WTF. Being who I am I was instantly pissed and knew I was alone in a 2800 sq ft house with my 3 year old. Panic wasn’t an option. Now, thank god I could feel my legs, it was my back that would go out every time I tried to stand, I fell. So, what does every single mom of a toddler do? I yelled for him to come into the room made him go get my phone and told him we are playing a fun game called mommy has to crawl like a baby. I finally made it into the car and managed to climb into it using just arm strength (thank god for the gym) and made my way to my house over an hour away from where I was staying. Now, I had just gone through a divorce and I had a newish business that wasn’t exactly in the stage of killing it yet. This caused me to take a good hard look at my spending and finances and say “fucking shit, I am not ready for this”.

My personal mission is educate stylists on how to avoid this fucked up scenario and possibly turn a situation like this into an opportunity. Since Rome wasn’t built in a day we can start with some basics:

Emergency fund

This should be the amount in your savings account that floats all your expenses for 3-6 months. How much is that? Well depends on how much you spend. Add up all your bills like rent, you know the bills you can’t get rid of, for the month and add them together. Then don’t forget to add up any business costs like credit card debt that isn’t just going to go away. Then take that number and multiply it by 3 and then go back and multiply it by 6. That is the number that should be hanging out in a savings account that gets you some sort of interest rate waiting for disaster to strike. What this number doesn’t include is taxes. That’s a whole different ball game of savings I’ll address, but that will have its own blog post completely.


There are 2 different types of interest, simple and compound. This can be confusing because it goes both ways. It can be money gained and also a fee you pay for the money you borrow. Lets break down a couple terms:

“Interestis your award for owning something and watching it get more valuable or the price you pay to borrow money.

“Principle” in the money world is your original amount you deposited into an account or the amount of money which was loaned to you.

“Rate” is the interest charged / gained. This comes in the form of a percentage.

$1000 // start of my retirement savings

$1000// loan for starting a YouTube Channel

Compound interest

Compound: Think compound color, it just keeps on giving, adding to itself every time you layer it on top of the last compounding on top of your hair over and over again.

Put compound and interest together and you get a little story. Meet Dick and Stella…

Simple Interest:

Straight forward interest you have to pay when you borrow money. It doesn’t grow with you, instead it usually decreases over time. This can apply to taking out a loan or receiving a set interest rate when you sign up for something like a savings account. This method isn’t used as often and isn’t complicated to understand.

Why are these important you ask? Well, everyone needs to set themselves up to avoid an emergency and I bet you would like to retire from service sales before 85. The longer you give yourself to get your shit together and save, the more money you will have to watch grow. All of these are important basic money terms that will help keep you a float. After all, we don’t want you to don’t sink, we want you to swim.

Download my FREE guide of basics if this made you think “shit, I’m not setting myself up to avoid having to marry a sugar daddy.