Money is a very emotional subject. How we use money says a lot about us that we would really rather avoid. Looking at the actual dollars and cents of our spending is just too revealing. Because what it shows, is that we spend our money on what we really value, in spite of what we say we value.
For example, I like to think that I don’t spend ‘too much’ on books. But my budget tracker tells a different story – that I spend 25% more money on books than I have budgeted for. There is always a good reason, mostly that I need it for my work. I lend books to my clients and I know they appreciate it. So, I tell myself that buying books is really a service to my clients. But lying to myself about what I actually spend means that I am miscalculating how much money I have to spend on other things that are also important to me.
So even though I hate budgeting, I need to track where my money is going if I’m going to quell my financial anxiety.
The creative life
As a creative artist you have limited funds. It’s hard to plan ahead when you don’t know where your next job is coming from. You may go from famine to feast and back again several times within a year.
Here are some tips to tame the money monster in your life:
1. Understand what is in your control and what isn’t. Grants dry up, ‘sure’ deals collapse, and contracts end. But you can control your variable expenses and your pricing.
2. Keep track of your spending for a period of 3 months. Most of the major banks now have online budgeting tools to help you do this so you can easily see where your money is going. You need to track fixed expenses (such as rent or mortgage, utilities, phone and Internet charges) as well as those pesky incidental expenses that can add up quickly (like parking, coffee out with a friend, dry cleaning, etc.)
3. Analyze the categories of spending and make spending decisions that suit your goals. If you want to know how your spending compares to others, BMO actually allows its customers to track this. (For instance, I think our family spends a lot on groceries. It would be good to know if we are over the average based on our income and the number of mouths to feed.)
4. If you want to save for something specific, it’s best to set up a separate bank account. It’s human nature to live to the level of our maximum income, so you need to ‘hide’ the funds you want to save from yourself.
5. On the revenue side, be clear with your customers about how and when you get paid. Always create a contract that includes the terms of payment and what will happen if either party terminates the arrangement.
6. Create an alternate revenue source to cover the lean times. Find out how to use all your skills and talents to create a steady cash flow all year round. I offer a workshop and a group coaching program around this topic called Build a Successful Career on Your Own Terms.
Find out more at http://www.acoachforallseasons.com/home/career Don’t wait to take charge of your money – do it now!