THE STORY OF RAGS TO REASONABLE: ORIGINS


From Rags to Reasonable - Origin StorySo I’d finally made it.

I’d moved out to Toronto a few years previously, survived Opera School (ya…it’s a thing), and was heading to a real job! Well… as real as a job wearing a costume and shouting Italian across a room will ever be.

Not only was I going to be performing in a world class hall, and working with world class performers and teachers, I was going to get PAID!

For being an artist.

Living. The. Dream.


 

Chapter 1: Riches to Rags

I moved to a nicer apartment; nothing fancy, but this one (as opposed to the last one) had heat!! I bought meat much more often, and significantly less rice. I paid for friends’ dinner. I was the person I always knew I could be. Everything was going perfectly; there was money in my chequing account, and even a little bit adding up on the saving side of things. Plenty to go around.

It started with a phone call. From the CANADA REVENUE AGENCY (CRA). Apparently I had made a mistake in my last year’s filing and could please send them form T-blah blah blah everything would be fine.

Well. That didn’t seem all that serious. So I continued on with my life.

…it may have been more serious than I anticipated.

TIP: Do not avoid calls from the CRA. The problem will not “just go away”. They tend to know where you live.

When they didn’t hear from me they sent me a nice note complete with a request for all the money. “How much did you say?” I asked, sure that I had heard them wrong, but there it was in plain black and white.

All. The. Money.

Apparently, when you’re a self-employed artist filing taxes is not the simplest thing, and the online tax program I had used had failed to fully encapsulate those subtleties.

Ooops.

There went my savings. Out the door went my fall wardrobe plans and in came stress.

So much stress.

I didn’t know what to do. Even after I had thrown all my money at the problem I still had a substantial debt, and no real idea of what had gone wrong.

Somehow they didn’t cover this in Opera School.

Clearly I needed help.

The story of YNAB - From Rags to ReasonableChapter 2: Rags to Re-evaluation

Where do you turn to at a time like this? Well, like most of you, I turned to the one sure thing in my life. Google.

“I need a budget”, I told it in faltering keystrokes. I had heard the word before and it seemed like a good place to start for a person in my situation.

“You need a budget?”, it responded. YES! I clicked on its question and that led me to my first step.

YOU NEED A BUDGET (YNAB)! A wonderful website for people exactly in my situation.

Right away, YNAB did wonders for me by bringing attention to my spending. Ah, the wonders of having to physically see what you’re spending money on. It’s amazing, by the 20th time you’ve recorded a trip to Subway in a month, you are forced to ask yourself… do I actually like Subway that much?

At the same time, I started working with an accountant on my tax problem. I was luckily recommended to a wonderful accountant who works primarily with artists (although the real reason I hired her was the presence of a Crokinole board in her office … 1000 menno points for anyone who understands why that’s a deal clincher.)

She helped me figure out that it’s not only about curbing spending, it’s about spending in the right ways.

All money put in to THE BUSINESS not only works as an investment in my career, but also works as a TAX DEDUCTION. Mark that down as the first concept that I thought I understood, but in the end probably didn’t understand at all (this ended up being a long list).

It’s not only reducing spending on the things that you don’t really want, it’s about making sure that you have the resources to do the things you DO want.

And there it is.

The beginning of the realization that gets confirmed every day I read another blog, or book, or anything about personal finance.

Personal finance isn’t about dollars, they are simply the practical application of the fundamental question which is much more daunting:

What. Do. You. Want.

It’s the question that drives the budget, the savings plan, the very reason why all this money stuff is so important.

As an artist there’s always the underlying implication that too much money might mean you’re selling out. Being poor. Struggling. These are good things that add to your art. You didn’t choose the 9 to 5. You’re different. And yes… it’s hard, but those poor saps with their… “401K” (as seen on TV) and their “pension plans” aren’t living life as “fully” as I am.

And after your fingers get tired from all the air quoting. You’re just left back at that question.

What. Do. I. Want.

You know what I want? I don’t want to be poor all my life. I don’t want to scrape by. I lived for more than a year in a truly bohemian apartment with a great friend. We had no heat, our landlords were sweet but impossible to communicate with through an intense language barrier and nothing ever fully dried. Seriously. Always damp towels… which I am convinced must be one of the circles of hell. Bohemian life sucks.

I want to have a family, and be able to travel, and yes… at the same time I want to live an artistic life.

The dangerous thing about saying what you want… is that now you have to do something…


 

Chapter 3: Re-evaluation to RRSPThe Story of Variable Income - From Rags to Reasonable

So. I finally figured out I have yet another thing in common with MURPHY BROWN. I want it all. All the variety of an artistic, self-employed life, with all the security of a regular salary and a retirement plan.

Seems impossible.

Well, it probably is. But let’s be honest, when every commencement address, every visiting lecturer, every professor’s first class starts with “You will probably not make it” … you learn to block out people telling you what’s possible and what isn’t.

The budget was the first step for me. Like getting your hands in the dirt and realizing that’s what a potato plant looks like… I started to figure out what my money looked liked. What I was using it for, and re-evaluating every choice to see if it was still a good one.

Changing my habits has not been a quick transformation. It’s been years and I still can’t seem to get my grocery spending down … I really like food.

One of the toughest challenges was HOW DO YOU BUDGET WHEN YOUR INCOME IS INSANELY VARIABLE?

Concepts like LIVING OFF LAST MONTHS INCOME, and knowing “MY NUMBER” really helped me manage the chaos.

I paid off my debt!! How have I not mentioned that yet? Every month the first money out of the gate was dedicated to paying off my debt, and when there was extra cash in a month I swung it over to chip away at the principle. A year and a half after I started getting in financial shape I had paid off both my tax debt, and my student loan. Over 10,000 dollars of dark scary looming spectre that had been ruining my sleep.

Now I sleep better.

Not just because of the debt, but because I’ve built EMERGENCY FUNDS, A BUFFER, I PAY MYSELF A SALARY and am SLOWLY INCREASING MY SAVINGS.

I don’t make a lot of money. That hasn’t changed. My income is as variable as it’s ever been. All the stresses of an artistic career sure haven’t gone away. But I’ve built up a framework, and the way I spend every dollar that I do make, makes it seem like I’ve got way more money to spend.

That framework has taken away one of the chief stresses in my life, something I could barely talk about without a very real feeling of panic taking over. Now I love talking about money, budgeting, investing, credit reports, insurance…. the list goes on. Not because all the details are always fascinating, but because I know how empowering it can be to take control.

A career in the arts is so full of things that are completely out of your hands. I’ve learned that my finances don’t have to be one of those things.

So follow along, I’m really aiming to start with basics, and explain everything including how it applies to this crazy artistic freelancer life. Trust me, I came into this knowing absolutely nothing: ask questions, comment, or just read.