The first thing you should do after cosmetology school or even a bit before is sketch out your financial plan of action. Your success and financial security will require that you establish a solid learning foundation for your personal, professional and financial development. FIRST CHAIR asked President and Founder of Hairdresser Career Development Systems Jon Gonzales how a newly graduated salon professional can establish a solid start on his or her path to financial security.

STEP #1: Invest in yourself through continuing self-improvement and ongoing education. “The more you learn, the more you earn,” says Gonzales. “Tomorrow’s hairdresser will have to know more than how to cut and style hair if you want to gain that competitive edge.”

STEP #2: Find a salon that offers training and education—strive to learn from the best. “Keep in mind that beauty school is designed to protect the public health and safety of the consumer and prepare you to get a license,” Gonzales says. “It is not designed to give you all the skills you will need to stand above the crowd.”

STEP #3: Devise a spending plan. When you start your new career, that means paychecks! Don’t celebrate too fast, though—financial experts suggest handling your money wisely. Even though you may want to buy all new beauty supplies for your job, it’s best to hold off. Instead, make sense of where your money is going or needs to be going. Track your spending!

STEP #4: Settle your student loans. According to a 2007 study by the College Board, in 2007 the average debt per borrower was $22,700, and typically loans are paid off in a range from 10-30 years depending on the loan amount. Figure out how much you can pay off based upon your monthly income. Then determine how much interest you can save by paying a little more.

STEP #5: Open up a simplified retirement or Roth IRA account. “As a hairdresser, one of the pitfalls you face is that you will often find salons that don’t provide you with medical insurance, paid vacation, pension plans or other benefits compared to other professions,” says Gonzales. “However, if you start saving for retirement at age 20 and contribute $5,000 a year to an IRA with an 8 percent average annual return, by age 65 you will have more than $1.93 million. If you wait until you’re 40 to start saving $5,000 per year, at the same rate, you’ll only end up with $356,000 when you are 65.” Gonzales says that it’s not necessarily how much you earn that determines financial security; it’s what you do with your money that counts.