How to Build an Account Structure for Self-Employed Creatives

How to Build an Account Structure for Self-Employed Creatives

If your self-employed (and even if you aren’t) here are some accounts you should think about having

A tax account:

If you make self-employed income you should have a savings account for your taxes. If you can’t afford to put away a lot, put a $1 in every time you make income, but have a space for it. Once money starts rolling in you’ll be grateful you’ve build this into your structure

A business spending account:

Having a separate place to spend from for your business makes things easier. If it’s a chequing account you’ll have your own business debit card that you can use for expenses in the moment. You’ll also be able to better tell what money is specifically for your business (without stealing it from your rent).

A personal fixed expenses account:

A great way to think about sorting expenses into different accounts is ‘like things go together’. Why putting all your fixed expenses in one account works is because it’s a number that doesn’t change from month to month. You know that if you put $3,000 in that account, then all your bills will be paid. You also know that if you only have $2,000 there on the 1st… that you need to find some more money. Keeping it separate also helps the stress of accidentally spending money that’s earmarked for a fixed bill.

A personal spending account

The perfect pair to your fixed expenses account is a separate spending account. You can use this for all your other monthly spending (food, transportation, movies, Pokéman cards). If you’re using a debit card for all that spending you’ll be able to easily check in to see how much money you have for the rest of the month. It will help you answer questions like “can we afford to go for dinner tonight?”

A series of savings accounts for annual expenses

Everything that isn’t a fixed monthly expenses or a general monthly expense can have a separate savings account. Yup… you can have that many savings accounts. Name them after the thing you’re savings for. Call them ‘Christmas $50” or ‘ Health $100” and then put that amount in them every month (or as often as you can). Even if you can’t fully fund them every month you’ll be able to easily see how much you have set aside for that purpose. It will help you answer questions like “how much can I spend on Christmas this year” or “Can I afford to go on a vacation”.

Download a blank version of this worksheet here

 

How much should I put in these accounts?

That depends on your own numbers. You can go through some old exercises of ours to get an idea or you can just pick some numbers and experiment (not for fixed… that will have to be the same).

Try putting $200 in your spending account and see how long it lasts.

Experiment and see what works and what doesn’t, and then adjust and add accounts where you need.

Which banks should I be using for this?

Again, no right answer… but I am aware that using bank accounts like this can really up your fees.

Go back to the work we did last week and see how much your accounts are costing right now, are there ways that you can reduce those monthly fees? Do savings accounts cost a lot at your bank?

One option is always to use an online bank such as Tangerine, PC Financial or EQ bank. But make sure to check with them as they sometimes have limits on the number of accounts you can use or perhaps won’t have the spending choices you want.

Always go back to what tools you need to spend and save… and then compare the costs of getting that in order to see what’s worth it to you.

Want to start getting control of your money? How can I help?

Chris Enns

Chris Enns

Financial Planner/Opera Singer

Money never came naturally to me. In fact... I was a bit of a disaster. I remember (very clearly) what it feels like to be 'financially out of control'.

And honestly, I still get stressed about money... that doesn't stop... the difference is that now I have the tools to deal with that stress.

And those tools are what's made it possible for me to build a life full of the things I want: art, creativity, travel, family and more.

If you want to start getting control of your money I'd love to help. You can start with THIS QUIZ, visiting my GETTING STARTED PAGE or by checking out my SERVICES page.

What Do You Use To Do Money?

What Do You Use To Do Money?

When it comes to our basic money tools, most of us haven’t looked at them since we picked them. The majority of the people I talk to don’t really know what kind of bank account they have or what it costs.

There’s nothing wrong with that at all, but it means that lots of us aren’t really sure if we’re using the right tools.

Defining the ‘right’ tools

There is no ‘best’ bank account, and I don’t think you’re a terrible money person if you have fees on your account.

The purpose of this exercise isn’t to change everything about what you’re doing. It’s about taking the opportunity to look at your tools, see what they’re good at and what they cost … and decide if they’re helping you use your money the way you want to.

That’s it.

You get to make the rules. You get to decide if that fee is worth it to you or not. But in order to do that… you have to take a little gander at what you’re doing right now.

Looking at some basic tools

  • Chequing accounts – great to use for money you need to spend right now
  • Savings accounts – really good for money that you don’t need right now, but will need in the next 1 – 5 years.
  • Business accounts – good for people who want to do business in a name that isn’t their name or have multiple people access the account
  • Investment accounts – these are good for money that you want to spend in the future (a good rule of thumb is at least 10 years from now)
  • Budget apps – good when you want to know exactly where your money is going
  • Spreadsheet – good for people who want to write out all their information in a place that automatically does the math for them
  • Envelopes – great for folks who don’t like technology and mainly use cash

I like to look through these for my clients and ask a few questions.

  1. What do you use this account for?
  2. What does it cost?
  3. What perks does it have?

You can find most of this with a quick google search. Take a glance and note down the things that apply to your life (no need to memorize everything, just find the perks and fees that apply).

It can also be interesting to take a quick gander at your statements and see if you regularly pick up any extra fees like overdraft fees, or extra e-transfer or transaction fees.

For credit cards, take a few moments to pinpoint that annual fee (if you have one) and figure out which month it comes out. Those can always be a surprise when they hit the balance. Also take note of your interest rate and how much your minimum payment is (if you have a balance).

Why should I spend my precious time doing this…?

I get it. This kind of basic tools audit is no ones idea of fun, but it’s information that so many of my clients really find interesting … and it’s pretty easy to do it on your own.

I sketched this out in 15 minutes.

It might help you find something that you’re paying for that you really don’t need, or plan for an annual fee that you forgot was coming.

Mainly it gives you the basic building blocks that will help you answer the question – does the way that I use money work for my life? Is it making things simple and clear…. or are there some things that are jumbled.

If you’re interested in sketching it out like I did, here’s a BLANK VERSION of that worksheet.

Chris Enns

Chris Enns

Financial Planner/Opera Singer

Money never came naturally to me. In fact... I was a bit of a disaster. I remember (very clearly) what it feels like to be 'financially out of control'.

And honestly, I still get stressed about money... that doesn't stop... the difference is that now I have the tools to deal with that stress.

And those tools are what's made it possible for me to build a life full of the things I want: art, creativity, travel, family and more.

If you want to start getting control of your money I'd love to help. You can start with THIS QUIZ, visiting my GETTING STARTED PAGE or by checking out my SERVICES page.

The Cost of Stability & The Hidden Life of Trees

The Cost of Stability & The Hidden Life of Trees

I’ve been reading a lovely book The Hidden Life of Trees by Peter Wohlleben. Apart from being a fascinating and romantic look at how forests work, there are sooo many amazing financial metaphors.

… now… you know I love a metaphor… I LOVE IT SO MUCH… and as I was reading today there was one that I had to share.

It has to do with what happens when a young tree loses the support of “a mighty mother tree”. These giants offer support in a hundred different ways including sending nutrients to the smaller trees as well as literal physical support.

When they fall, the younger trees are left to manage for themselves and learn how to be stable on their own.

“The process of learning stability is triggered by painful micro-tears that occur when the trees bend way over in the wind, first in one direction and then in the other. Wherever it hurts, that’s where the tree must strengthen its support structure. This takes a whole lot of energy, which is then unavailable for growing upward.”

GAH! METAPHOR!!

Learning stability often starts with pain:

I have the incredible privilege of growing up with the support of a ‘mighty mother tree’. My family helped me not worry about money for the first 20 years of my life.

My process of learning how to be stable started as I moved out on my own. And it included a whole lot of painful mistakes.

I named a lot of that pain failure. I beat myself up a lot for how I ‘really should know these things’.

But now I feel differently.

So many of the people that I work with are craving stability. They are at all stages of their lives and careers, but most of them are feeling the pain.

But that pain isn’t failure. It’s a message of what needs to be strengthened. The reframing of that is a powerful message for me, since instead of something to ignore and be ashamed of, it’s something to notice and bring into the light.

“The thickness and stability of a trunk, therefore, build up as the tree responds to a series of aches and pains.”

Cool right?

Increasing Stability Often Halts Upward Growth (for a little while)

Stability is the first step towards growth, but it doesn’t always feel like growth in the moment… in fact it can feel like you’re standing still.

For the tree it means deepening roots and increasing the “thickness and stability of the trunk”. For us it means restructuring resources, building a cash flow buffer (getting one month ahead) and taking care of the annual expenses that can cause debt.

Spending 6 months building a one month cash buffer instead of making big payments on your debt can feel super frustrating, but it’s creating the stability that will make paying off your debt for the last time so much more possible.

We only have so many resources, and investing in stability usually means that there’s less for our other big goals. From the outside it can seem like we’re not making any progress at all, but it’s the progress that needs to happen if we want to… *sigh*… grow up into strong and tall trees.

… sorry for that last one

Want to start getting control of your money? How can I help?

Chris Enns

Chris Enns

Financial Planner/Opera Singer

Money never came naturally to me. In fact... I was a bit of a disaster. I remember (very clearly) what it feels like to be 'financially out of control'.

And honestly, I still get stressed about money... that doesn't stop... the difference is that now I have the tools to deal with that stress.

And those tools are what's made it possible for me to build a life full of the things I want: art, creativity, travel, family and more.

If you want to start getting control of your money I'd love to help. You can start with THIS QUIZ, visiting my GETTING STARTED PAGE or by checking out my SERVICES page.

Emily’s Favourite Stories from the Interweb

Emily’s Favourite Stories from the Interweb

Podcast Series: Nancy-Queer Money Matters series

It’s easy to feel like we’re screwing up because other people “get money” in a way that we don’t, but remember that not all people face the same financial challenges. When I was a kid, a lot of the models of people “doing money right” were straight cis able-bodied white men with conventional jobs. They were the ones who were “succeeding.” As a queer artist with an anxiety disorder, money was never going to work the same way for me. It would be unfair to hold up my experiences to their metrics.

Take a look at your own financial situation and have patience for the ways that your experience may look different than those traditionally “successful” models that you may have been presented with as a kid. Your money challenges are valid, whoever you are, and sometimes you’re working against systemic barriers that just make it harder.

In this series, Tobin Lowe and Cathy Tu (the hosts of the podcast Nancy) dive deep into the money issues that are unique to queer folks. They talk to a wide range of people in the community and present their stories with thoughtfulness and empathy–financial planners, parents, newlyweds, trans* folk, seniors living in retirement homes. There is a really wonderful mix of diverse voices. Although they are talking about the States, it is still very relevant for those of us not in the US. This series is both engaging and affirming and makes me feel super supported and seen as a queer person.

Podcast: Dear Sugars #69 “The Price of our Dreams”

Chris and I talk a lot about being a “real artist” and about how joe jobs (or survival jobs) are sometimes a necessary tool to make art. I don’t know what makes someone a “real artist.” My anxiety says the qualifier is earning 100% of my income from making art, but when I look at that metric it erodes quickly.

Do I really want to evaluate the worth of my art by how much people pay for it? I know that what people often pay most for is work that maintains cultural status quo. So my answer to that is no. This system of measurement also doesn’t allow for marginalized artists who may have fewer opportunities to make their art. Do I believe that queer, disabled, or artists of colour make less valuable work because they often have fewer opportunities? Hell no. And then there are the scores of great artists who rely on other income avenues. Composer Philip Glass was a plumber/taxi driver. Comedian Ken Jeong was a physician to support his comedy career. Writer Roxane Gay is still a professor at Purdue University. There are tons of reasons that an artist might need a day job that do not make their art any less valid.

In this episode of Dear Sugars, they take a very real look at how to make a life as an artist. Their
radical empathy-based advice is the best. I’ve listened to it several times and still feel challenged and affirmed by it. Warning: you will likely listen and then binge all of their episodes, like I have. Don’t get your heart broken when you discover that they finished making it in 2018.

“Aminatou Sow on Making $300,000 and Sending Money to her Family” by Maggie Bullock for The Cut

I would describe Aminatou Sou as a tech boss/content creator/hustler extraordinaire. She co-hosts the podcast Call Your Girlfriend and co-founded the network Tech LadyMafia, that aims to boost women on the tech-world ladder.

This interview is such a great reminder that as long as your spending is in line with your values, you’re doing it right. Aminatou Sou gives an invigorating perspective on spending. She also offers a much-needed Black female perspective on finance.

“How Tax Brackets Actually Work”

This video blew my mind. I totally get it now! I have heard this explained at least three times before this and just filed it in the “things I don’t get” brain folder. This rocked my world. In a really, really nerdy way. As per the poster in my high school stairwell, knowledge is indeed power. Want to feel slightly better at tax time or impress your parents when you casually drop your understanding of tax brackets? Watch this video.

“How to Successfully Work From Home Without Losing Your Goddamn Mind (Or Your Job) from Bitches Get Riches blog

This post is helpful and also a great introduction to the Bitches Get Riches blog. It’s got all the good things: silly gifs, recognition of ableism in the traditional workforce, and handy handy tips. I’ve been trying to work these tips into my own life. Specifically the one about keeping normal business hours, and it’s making my time feel more boundaried in a great way. The fern has yet to happen.

What’s your favourite? Any that we need to check out this month? Please send recommendations if you’ve got any!

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

I Felt Like I Had Screwed Up My Financial Life Entirely… That I Was Destined to Constantly be Broke and Insecure.

I Felt Like I Had Screwed Up My Financial Life Entirely… That I Was Destined to Constantly be Broke and Insecure.

*This was written by a client of mine (Chris) to help you understand a little more about what working with a financial coach/planner is like and so you can better decide if it’s something that interests you. 

I think until the time I started working with Chris, I was just nervous and ashamed about money in every way, and had an extremely hard time talking about it to anyone. I felt like I could never get it right with money; I never had enough of it, I was always behind my bills in some way, and I could never trust myself with it. I felt like I had screwed up my financial life entirely, that I was destined to constantly be broke and insecure.

To be fair to myself, I had never been taught how to handle it;

 I think my parents, who were both first generation college grads and came from working class backgrounds, felt like they were giving me a gift when they didn’t teach me how it worked. Because I didn’t grow up “on the farm” (literally), they thought I wouldn’t have the same problems they did, so I didn’t need to know the basics. Unfortunately, the opposite happened. I never got the financial education that they did. When I got out into the real world, I had nothing to fall back on, and I had to work it out on my own.

For a long time I was ok—I was making enough to get by without too much planning, but I was miserable in my day job. I started to take my art seriously by going back to school for my MFA, and everything changed. My income decreased as my quality of life increased. I was doing what I wanted to do with my life, but I couldn’t just pay for things that came up out of the cash in my checking account.

Simultaneously, I was getting older, and I started seeing the writing on the wall: Shape up or…else. Big questions started looming. I can’t wait tables/dogsit/babysit/be your assistant forever! I now know my body will give out at some point J. I felt like I was a teenager trapped in a middle-aged person’s body. Odd jobs were not cutting it. When they did, I didn’t know how to make them fit together to pay everything on time.

I had found a lot of relief from other kinds of therapy, so I thought there must be some sort of financial therapy that might be useful in the same way. That was how I found Chris.

What was surprising to me was how quickly after we started working together, I became in control of my finances.

 Once I took a look at what I really needed and what my options were, I was able to find a path forward. But freedom didn’t look like what I thought it would; it’s not like I magically made more money. But I was able to set up a system that worked without me having to freak out every minute. Making rent was so stressful to me before Chris; now, I know that the money is there. I don’t have to fake it, I don’t have to stress out on the 20th of the month, wondering how I will get it together before the 1st. I know what is happening, and I don’t actually even have to try that hard.

It has literally been the difference between me being able to do my work and not. Instead of letting my brain be occupied by endless small worries about money, I now know that my basic needs will be met. All I have to do is…make the art I’ve been trying to do my whole life. Without worrying about how I will pay rent next month. Truly, it’s amazing.

I’ve already recommended Chris to people I know, because so many artist friends of mine are in the same bind. We have dedicated our lives to making something meaningful out of our time on this earth. But making something meaningful both requires our undivided attention and a day job. How can those things that are opposites find a way to speak to each other? We don’t want to have to worry about money, but it is the not worrying about money that makes us unable to work.

Simultaneously, money is this thing we can’t talk about, it is the shame we all carry.

I’ve seen friends both with a lot of money and with no money who are terrified to speak about it, terrified they’re doing the wrong thing and that if people knew how terrified they were, somehow the smoke screen they’ve set up will disappear.

Working with Chris allowed me to devise a system that takes the pressure off day-to-day scrambling. It has become one of the reasons I am able to do the work that I love, that I feel driven to do. Just knowing that my bills will be paid gives me a peace of mind I never thought I would know.

Seriously, thank you, Chris! I didn’t know life could feel this (relatively) carefree. Can you write my novel for me now? 

Chris Enns

Chris Enns

Financial Planner/Opera Singer

Money never came naturally to me. In fact... I was a bit of a disaster. I remember (very clearly) what it feels like to be 'financially out of control'.

And honestly, I still get stressed about money... that doesn't stop... the difference is that now I have the tools to deal with that stress.

And those tools are what's made it possible for me to build a life full of the things I want: art, creativity, travel, family and more.

If you want to start getting control of your money I'd love to help. You can start with THIS QUIZ, visiting my GETTING STARTED PAGE or by checking out my SERVICES page.

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