You’re tempted to ignore this post because you don’t like to think or talk about money. That would be at your peril. If you want to make more money as an artist, you can’t ignore the unpleasant stuff. Read on if you dare take care of your financial health.
1.
Don’t rely on a spouse to take care of all the financial stuff for you. YOU need to know how to do it. You need to be aware and able to take charge if, heaven forbid, something should happen to your spouse. And I hate to even bring it up, but I’ve heard so many stories recently about people being duped out of their life savings by their spouses who made poor financial decisions. These weren’t in the paper or a television exposé, these were artists I was talking to. (“You’re in charge” is one of the 6 principles guiding my book.)
2.
Value your work. Don’t ever discount what you do and the contribution you make. No one will value your art until you understand and embrace its worth (emotionally or financially). As much as you may despise pricing and talking about money, the fact is that art is a thing and things have an attached value (rather real or perceived). Figure out a way to get comfortable with this idea.
3.
Keep up with your accounting each week. The further in time you get from a financial transaction, the more
likely you are to forget details, which you may need for tax purposes. Don’t let receipts stack up and bills go unpaid. Set aside a regular time that you spend with your financial records. Input your expenses and income and send out invoices, receipts, and statements. Know how much debt you owe at any particular moment and what the balances are in your checking, savings, and retirement accounts.
4.
Use QuickBooks or some other software that allows you to track your expenses and income. Having everything in the computer will make your life beautiful. You can generate monthly reports (see next item) and tax records in the blink of an eye.
5.
Bank online. Sign up for and know how to use your online banking, credit cards, and bill paying. These records are gifts from the money gods, which allow us to check our situation at any moment. They’re a blessing when we do our weekly accounting since we no longer have to wait for monthly statements.
6.
Create a monthly check-in. Write down where the money came from and where it went. Compare it to previous months and analyze trends. Try doing this on the 5th of the new month for the previous month.
7.
Start a financial support group. It doesn’t have to be an investment group, although investing could be part of it. There are four of us in a group we call Rich Women (founded by Cynthia Morris). Each month we get together and talk personal and business finances. We give ourselves homework to do before our next meeting. Sometimes, this homework doesn’t get done until the last minute, but who cares? If it takes a deadline to tackle (and I do mean tackle!) this stuff, so be it.
8.
If your finances are complicated, consider investing in a bookkeeper. Hiring a bookkeeper over a year ago was one of the best business decisions I ever made. I’m pretty good with my finances, but my books had become a mess because I couldn’t really keep up with the numerous daily Internet transactions as well as the in-person sales, workshops, and more. I was doing my best guess as to where things should go and how they should be coded. I love having a partner to help me figure all of this out and it’s not a huge expense.
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15 thoughts on “8 Ways to be more financially savvy”
Great Reminders! Especially the monthly check-in, which I tend to not do as often as I should.
I’m ashamed to admit that I just did a 6 monthly-check-in and found that our web sales were down 21% and our webmaster costs were up 500%! Just the info we needed to let go our webmaster and do it ourselves for a while. (Had I been keeping an eye on these numbers monthly, I would have “stopped the bleeding” awhile back.)
Thanks for all your great tips!
Thank you for the advice!
i saw this on your facebook page, too, and it is really excellent advice.
It is intriguing to me to see that there are so few comments (as yet) on this VITAL subject, Alyson. As I’ve gotten older, I have seen the wisdom and peace of mind that comes from being more and more responsible and KNOWLEDGEABLE about all aspects of my finances.
It is SO not an area I have had interest or expertise in, but I have come to realize that without MAKING myself be interested, I wasn’t going to get better at it. So what happened what that as I got more knowledge, the interest followed! That is a good principle to understand….the more knowledge one has, the more one finds about that area to be interested in.
I will NEVER be all THAT interested, but just enough to support my work in a solid way.
Thanks for writing this for us to see. You have the platform and following that should wake up some of us artists who have shunned this area of life….and it IS an area of life, just like our art is!
I’ll happily vouch for Quicken as a way to get over the checkbook balancing trauma once and for all.
I use online banking all the time. Both for money transfers between accounts and to pay my credt card bill.
A couple of additional thoughts:
I also have a Paypal account, which is how buyers pay for the small paintings I list on eBay.
For those of you who have iPhones or are thinking about getting one, there is a real, legit credit card processing app that costs $50 and is then $15/mo. For anyone on the festival circuit, it might be the way to go.
Maria: Ouch. But better late than never.
Lynne: Great concept: the more you know, the more you’ll want to know. Thank you for sharing your experience.
Susan: Are you talking about the AuthorizeNet app for the iPhone? You have to have the right merchant account, and I think it’s AuthorizeNet. ???
Isn’t it interesting that those of us who do the art are also the least interested in the financial aspects of our career.
No wonder we’re all poor and starving – we don’t do anything about it!
Thanks for the great advice!
– Chas
http://music.willowrise.com
Chas: Sounds like you need to read one of those books I recommend a couple of posts up from here (later post). Don’t give into that “poor and starving” myth!
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Susan,
In my experience with Authorize.net, it is much cheaper and easier for artists and other small business owners to use Square to process credit cards. You will need a smart phone – iPhone or Android. You do NOT need a merchant account. Visit Squareup.com for more info. (Make sure you read the fine print first, so you know what to expect.) I have no regrets about closing my merchant account and using Square. No monthly fees.
I think the problem for me is getting the money into the account in the first place!! lol.
That’s a very useful list Alyson and I’ll be highlighting this post in “who’s made a mark this week?” come Sunday
However I do think you’ve left out one really vital action – which is the one that a lot of people ignore and which really comes back to bite you on the proverbial!
We all get old – and none of can just assume you can go on making art forever. Artists are the same as everybody else and those who are doing this for a career and have no other earnings really need to make suitable provision for a pension from existing earnings. Otherwise there is no pension……
thank you for this. i think it’s something all artists need to know. i speak from both personal experience, and from experiences i’ve heard from artist friends. will definitely be sharing!