by Chris | Oct 22, 2015 | Living with Variable Income, Saving, Variable Income
So there’s an article flowing around the inter webs that’s made some waves in the personal finance community:
IF YOU HAVE SAVINGS IN YOUR 20s, YOU'RE DOING SOMETHING WRONG
Now I imagine that for some of you just reading this title sent a wave of justification through your soul. And that, even though you'll probably agree that it’s an exercise in click bait extremism, some of you might be on board with its general premise.
“Why should I ‘waste’ my 20s saving and scrimping? I should be living life to the fullest.”
I'll admit that in amongst its “learn to treat yo' self" insanity, the piece makes a few actual points, like… how spending money on networking and investing in yourself can pay off fully in the long run. That’s a huge truth for entrepreneurial types (like artists).
But like many one-size-fits-all statements it probably fails to address your reality, beautiful snowflake that you are. However, it brings up a super basic question that I think tons of variable income artists struggle with whenever a big cheque comes in:
Should I be saving or spending? (more…)
by Chris | Oct 18, 2015 | Money Meditations
I have recently become absolutely obsessed with Bill Watterson’s (the Calvin and Hobbes guy) commencement address to Kenyon college in 1990 (proving yet again that I am hopelessly behind the times).
He titles it ‘Some thoughts on the real world from one who glimpsed it and fled”.
He is officially my new favourite person (#apologiestomylifepartner).
I’ve been reading it every morning, because it reminds me of a few things that I so often forget.
It's surprising how hard we'll work when the work is done for ourselves.
It seemed the more artistic training that I got… the less I made things for fun. The more I worked, the less I thought about the kind of art that I actually wanted to make.
Doesn’t that seem a little backwards?
It blows me away when I fall into a project that I’m doing just for the pure joy of it. The minutes become hours, and before I know it I’ve missed three meals and I can’t wipe the grin off my face.
Seems like there should be a lesson in there somewhere….
If there's one thing I've learned from being a cartoonist, it's how important playing is to creativity and happiness.
Being creative for a living can get a bit tricky, because a certain amount of ‘play’ is really really helpful for the quality of your work. Well, I don’t know about you, but it’s really important for my work. It’s so hard for me to ‘give myself a break’ to stretch my brain in other ways… but every time I do, it pays off hugely.
Selling out is usually more of a matter of buying in.
I love this. It wraps it all up in a big package. Selling out doesn’t have any specific guidelines… it simply means buying in to someone else’s idea of what’s important.
It can be so easy to get sucked into other people’s ideas of ‘success’ or ‘happiness’… but then you’re selling out your own.
Creating a life that reflects your values and satisfies your soul is a rare achievement. In a culture that relentlessly promotes avarice and excess as the good life, a person happy doing his own work is usually considered an eccentric, if not a subversive. Ambition is only understood if it's to rise to the top of some imaginary ladder of success. Someone who takes an undemanding job because it afford him the time to pursue other interests and activities is considered a flake. A person who abandons a career in order to stay home and raise children is considered not to be living up to his potential - as if a job title and salary are the sole measure of human worth.
How amazing is the quote. Seriously?
I know it's a big block of text, but if you skipped it... go back and read it again.
I try to read it every week. It is one of the fundamental principles that I live my life by.
To invent your own life's meaning is not easy, but it's still allowed, and I think you'll be happier for the trouble.
Something about that sentence got me quite teary the first time I read it.
I think it’s the permission that it gives. The permission to try to figure out what you want to make your life about. What you want to invest your resources in, and what return you’re looking for on that investment.
The dollars and sense of it all
What does it have to do with money? Well… everything.
This is why personal finance jumped from being an ideal curiosity of mine to a full blown passion.
It’s not about more, it’s not about excess (unless that’s what you want), it’s about building a life according to your own definitions. It’s about not “buying in” to the narrative around you. It’s about being the main character in your own story.
Money is one of the tools that you can use to build that life, but it doesn’t just happen. It’s hard to ‘invent your own life’s meaning’. It means swimming upstream when everyone else is swimming down.
You need a plan. A firm idea of what it is you’re trying to build, and after that… a whole ton of discipline to make sure that your daily resources are going exactly where they need to, where you want them to.
But how will you pay the bills?
All that flowery talk is nice, but what about the real world?… what about getting through every day?… how will you pay the bills?
That’s the thing… it doesn’t matter.
It does matter that you pay them… seriously… bills gotta get paid. But it doesn’t matter how. You can market yourself as an artist, or you can take a job that may seem ‘undemanding’ because it “affords you the time to fulfill other interests and activities”.
Your life doesn’t have to be about how you make money. The source doesn’t have to matter (although you do need to make some).
What your life could be about is just how you choose to spend that money.
Making a home for your family. Building a business you love. Traveling the world. Playing. Working.
It's allowed.
Want to start getting control of your money? How can I help?
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.
by Chris | Oct 15, 2015 | Living with Variable Income
So you just got paid, and you’re halfway out the door to buy that new pair of dungarees you’ve had your eye on… but hold up partner…
You may feel richer than you’ve felt in months. You may feel like you can finally ‘afford’ it.
But can you?
Before you buy, let’s see how much of that new money is already spent.
Take a look at: The Freelancer ‘Cheque’ List.
The Freelancer 'Cheque' List
1. ARE YOUR TAXES PAID?
You’re a freelancer, so there is a pretty dang good chance that the number on that cheque you’re holding does NOT represent the amount that is actually YOUR money. A big chunk of it actually belongs to the government.
No matter where you are, you need to pay taxes. So the first thing to look at is whether the person paying you has already deducted the (or some of the) tax, or if you have to do it yourself. The amounts will be different depending on where you are and how much money you make, but there’s no worse feeling than getting to tax time, and not having money to pay the bill (#personalexperience).
So as soon as the cheque comes in, if there aren’t any taxes taken off (and make sure that if the company paying you DID take them off that they took off enough), take a big percentage of it and put it far away… in a savings account, and don’t touch it until tax time
Don’t spend the government’s money… they really won’t be ‘cool about it’.
2. DOES ANYONE ELSE NEED TO GET PAID?
Have an agent? Pay your commission.
Part of a union? Pay the dues.
Is there anyone else who is owed a cut of this cheque?… it doesn’t matter how much you may not ‘want’ to… pay them now. It’s not your money, it belongs to them.
3. DO YOU HAVE ENOUGH TO LIVE THIS MONTH?
Your life costs money, and whether or not you know how much you need every month you need something (although knowing the exact number can really help: Check out: CAN YOU AFFORD YOUR LIFE ).
Rent? Phone/Internet? Food? Transit?
Before anything else is bought, make sure that the stuff you’re already obligated to pay for is covered.
THIS INCLUDES DEBT PAYMENTS. If you’re paying minimum payments on a line of credit, student loans or credit card make sure those payments are covered too!
4. HOW LONG UNTIL YOUR NEXT CHEQUE?
This is a big one. How long does this cheque have to last you?
Sure, you have enough to live on this month, but if you don’t have any work lined up for the next month… then this cheque is going to have to last you a bit longer.
It’s the number one rule of variable income. When you’re making money, make sure that you’re stocking some of it away to get you through the lean times.
5. ANY BIG EXPENSES COMING UP?
Any big expenses coming down the pipes? Holidays? Audition season? Maybe your car insurance is due?
It may seem to early to worry about Christmas, but why let it blindside you? If you’ve got money now, set some aside to cover expenses that you KNOW you’ll have to pay down the road. I promise future-you will thank present-you for it.
Letting things you know are coming take you by ‘surprise’ is just inviting extra stress into your life. When you’re living on variable income, you can’t be sure whether you’ll have more money coming in ‘later’, but you know that you do have money now.
It’s not about saving… it’s about admitting that that money is already spent.
6. DOES YOUR EMERGENCY FUND NEED A TOP UP?
As much as I try to avoid the blindside… it happens. Stuff comes up that I forgot about, or couldn’t have predicted, and it can really throw off my plans.
Having a bit of money ready to absorb the hit is INSANELY HELPFUL.
An emergency fund is what keeps debt from happening, and it can be a really useful thing to put some money into (if you’ve got a little left).
7. WHAT DOES YOUR BUSINESS NEED?
Your personal bills are covered, but is there anything your business is really needing?
For me, it’s things like lessons and other training that I get on a regular basis.
Putting money into your business is, hopefully, going to keep money coming out of your business, and remember… money that you spend on your business pays off TWICE: once in the thing that you bought, and once again at tax time with a big ole DEDUCTION.
8. WANNA WORK ON YOUR DEBT?
I’m not sure if this should be higher on the list or not on the list at all, but I want you to give it a thought before you spend…
YOUR DEBT IS AN EMERGENCY, and the faster you can pay it off, the better off you’ll be… but it’s up to you how you rate it as a priority.
Just keep it in mind with every cheque that you get. Take a look at those minimum payments that you paid in number 3…. And think about how good it would feel to not have that cost every month.
Throwing some money at your debt (when you have it), is the only way that debt is going to go down.
Think about it!
And after you’ve made it through the gauntlet of that list… the rest of the money can be spent on dungarees and gismos a-plenty!
Happy shopping!
Want to start getting control of your money? How can I help?
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, or visiting my GETTING STARTED PAGE by checking out my SERVICES page.
by Chris | Oct 8, 2015 | Living with Variable Income
Meet my new bear friend.
You may think that she has nothing to teach you, that bear skills and human skills (especially human artist skills) are completely separate things. Sure… you both pick the occasional berry, but other than that you live in pretty separate worlds.
There’s where you’d be wrong.
You see, we could learn a lot from the bears: masters of variable income.
Okay… bear with me (#punforthewin)… they clearly don’t make money, but if we just sub in the word ‘resources’ for income then we’re on a more solid footing.
Just like us, bears don’t have an equal parceling of resources every week; It’s feast or famine. And they’ve gotten really great at handling this ebb and flow cycle.
So today let’s look at these cuddly death machines, and steal a few lessons on how they manage the #variablelife.
Lesson 1: Hibernation mode
Obviously it’s less of an option for humans to just sleep for months out of the year… even though that would be a lovely way to spend most of the winter. But what we can learn here is that:
When there are fewer resources, you have to know how to conserve.
Hopefully your income doesn’t go through a complete winter… but there will be times when there’s not a lot coming in. You have to have the ability to operate on as little as possible.
There’s a principle in business called ‘the law of survivability’ which basically states that the businesses that last are generally the ones that have the lowest operating costs.
There are times to spend a ton of resources on your life, and your business… but if you’re living with variable income you also have to know how to cut back, and ‘hibernate’ so you can make it to your next big windfall.
Lesson 2: Go where the food is
When a bear wakes up he doesn’t crawl out of his den and complain that there isn’t a nice tasty salmon just waiting for him.
He goes where the food is… which is usually crazy far away.
The whole point of being a freelancer is that you have the flexibility to go where the market demand is, and to not be tied down.
Don’t be afraid to go where the food is, where you can get the resources that you need (whatever they might be).
Lesson 3: Filling your fat stores
When bears get down to those tasty salmon-filled rivers they don’t mince words. They get down to eating.
Now here’s where it gets tricky. The lesson here is not: when things are good buy a lot of salmon. Don’t think about what the bears are doing on the outside, feasting and lying in the sun. Think about what they’re doing on the inside: building up their fat stores for the next dry time.
When things are good, store up for the next hibernation cycle.
Your first priority as a variable income earner who’s making some sweet cash, is to save up enough to get you through those lean times. Remember … hungry artists don’t think about art… they think about sandwiches.
You may be new at hashing out how to survive on an ebb and flow of resources… but don’t freak out. Be like da bears, and you’ll be around for yet another sweet season of salmon.
Want to start getting control of your money? How can I help?
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 by checking out my SERVICES page.
by Chris | Oct 6, 2015 | Budgets, Business Tools
Do you know how much money Lebron James makes…?
Hint: It’s a lot.
Hint: He’s a basketball player
Hint: Basketball is a sport…
Every year at tax time when I’m forced to actually distill the sum of a year’s work into a single number, gross income (gross indeed), I come face to face with the reality that Lebron James and I are very different people.
It’s a tough pill to swallow (because people are always saying how we’re so similar…).
But even though my number is about three billion percent less than his, I’m actually usually surprised by how much I made every year. Honestly… it’s generally more than it felt like I made.
I was commiserating with a fellow artist friend recently about that very fact and he agreed. He had had a particularly good year, and although he had ended up making 6 figures it didn’t really feel like the riches that he imagined it would be.
It’s not because the money is slipping between our fingers… it’s because as sole proprietors of a small business our ‘gross income’ isn’t remotely the same as our ‘take home pay”. (more…)
