How to start controlling your variable income

How to start controlling your variable income

by | Jan 17, 2017 | Living with Variable Income, Variable Income

Controlling your variable income

There’s a trap in the challenge of controlling variable income, and it’s baked right into the term itself.

The key to managing ‘variable income’… doesn’t lie in your income at all.

Over my years of living with and managing variable income I’ve learned that the first focus has to be on the flip side of the coin:

In the murky world of expenses.

The concept of ‘enough’

It is impossible (or at least I think it is…) to control variable income without first being able to answer the question “How much do I need?”

Now, that question has a bunch of different levels to it… do I mean ‘how much do I need this week’, or am I talking about ‘how much do I need for my life’?

Well… kind of both… but for right now…. it’s mainly the first one.

It’s easy to just assume that’s an impossible question to answer.

Every week is different, right?

Some weeks you stay home and only leave to buy popcorn, and other weeks you book 3 flights and dine with a Peruvian prince.

But I’ve got a theory about that.

I think that we’re more prone to remember the things that are different. We remember the crazy weeks. We remember the variable expenses. We remember the time we spilled our coffee on our computer and had to spring for a new one.

All those memorable one-off expenses… can’t always be planned for.

But there’s a whole other school of things that you might not remember…

..and that’s the stuff that gets bought over and over again in order to maintain your life.

Expenses: the key to controlling your variable income control

One of the things I was pretty surprised to realize when I started tracking my spending was it was much more… regular… than I thought it was.

It’s a hard pill to swallow for someone brought up to believe he was a unique snowflake…

But it was true…

Beneath that crust of crazy, variable expenses and income… was a core of regular, predictable expenses… and it’s more precious than gold (at least in this variable income fight that we’re in).

Once I became aware of how much I needed to run my ‘core’ life – a place to live, food to eat, tools to be healthy and happy, and of course enough money to pay off any creditors that might have my address … I could do things like:

  • pay myself a salary
  • budget effectively
  • find extra money for debt and savings
  • figure out how long a lump sum cheque would last me for
  • check my needs against my expected yearly income (and see if I was falling short)

All the things I thought were impossible because of my ‘variable income’… weren’t.

How to get to the core of your expenses:

Step one is to find out what you know… and what you don’t know.

Check out this list:

Controlling your variable income

These are the core expenses that make up my regular spending. Do you know how much you spend on these things every month?

I would challenge you to take 5 minutes this week to sit down with this list (and a big glass of wine) and just jot down what you know and what you don’t know.

That’s it.

Do you know how much you spend on food? Do you know how much you spend on random stuff throughout the month? If you don’t know, that’s totally okay, just write a question mark beside it.

Once you’ve got an idea of where you’re at, I’ll help you turn those question marks into numbers that actually fit your life… and from there we’ll build a plan that will help you kick variable income’s ass.

If you don’t want to wait for me to write about it, feel free to send me an email or sign up for an office hours session.

I’m here to help with whatever you need.

sign up for (free) office hours

30 minutes one-on-one financial coaching with me… no strings attached.

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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

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

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How to manage your variable income and expenses this opera season

How to manage your variable income and expenses this opera season

by | Sep 27, 2016 | Living with Variable Income, Variable Income

How to manage your variable income and expenses this opera season

I’ve never been able to shake the feeling that September is the start of a new year.

Sure, I’ve been out of school for *mumbles a number* years now, but when September stopped being the dawn of a new school year… it started being the dawn of a new opera season. 

This week I start back up with my first contract of the season, and in addition to being thrilled to be working with a great company on a really fun project… I’m also really happy to be making some money.

In fact, over the 5 weeks I will make more money than I made during the four first months of 2016.

Such is the crazy variable nature of this job. 

And while making money is mostly a good thing, there are also some huge traps that go along with getting it in one big shot like this. 

For one… it can make you feel like you’re rich. So it’s tempting to spend a little more on just about everything when those paycheques are coming in…. which would be fine, if I didn’t have a few very slow months ahead of me this winter. 

So what’s a tenor to do?  (more…)

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THE BIG BOOK OF VARIABLE INCOME

THE BIG BOOK OF VARIABLE INCOME

by | Nov 3, 2015 | Living with Variable Income, Variable Income

Big Book of Variable Income

It’s a bird… it’s a plane… it’s a big book of variable income?

Regular readers will notice that I’ve been gabbing on about variable income a lot over the last month. I remember so clearly how much of a block it was for me… how do I manage my money when I don’t know when it’s coming, or how much.

And I assume I’m not the only one.

So I’ve compiled some of my variable income success stories into a big (but compact… don’t worry) resource that you can check in with, and pass on to anyone you know who is struggling with making the money work.

If you like the format be sure to subscribe (in the sidebar, or below the post) because I’ll be sending one out every month on a new topic!! Fun right?

But until then enjoy…

THE BIG BOOK OF VARIABLE INCOME

 

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SHOULD I BE SAVING OR SPENDING? THE LIFE CYCLE OF AN ARTIST

SHOULD I BE SAVING OR SPENDING? THE LIFE CYCLE OF AN ARTIST

by | 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…)

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THINK BEFORE YOU SPEND (WITH THE FREELANCER ‘CHEQUE’ LIST)

THINK BEFORE YOU SPEND (WITH THE FREELANCER ‘CHEQUE’ LIST)

by | 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!

DOWNLOAD THE FREELANCER 'CHEQUE' LIST

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).

need more money for your business or debt?

Check out the store for workbooks on both debt AND making a business plan!

CHECK OUT THE WORKBOOKS

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?

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, or visiting my GETTING STARTED PAGE by checking out my SERVICES page.

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LESSONS FROM DA BEARS: MASTERS OF VARIABLE INCOME

LESSONS FROM DA BEARS: MASTERS OF VARIABLE INCOME

by | 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).

Don't know where the 'food is?

Build a business plan! I’ve got a workbook that will help you out…

GET THAT WORKBOOK

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?

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 by checking out my SERVICES page.

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