Posts Tagged ‘income’

Turn Your Hobby Into a Business

Reality television is amazing…while I’ll agree that most of it isn’t worth your time, I enjoy watching how some of the “stars” who elegantly perform in public actually work their butts off behind the scenes. Lifting the curtain on the daily tasks of a true artist shows that success is more than just creating a product. In most cases, you have to be a financially savvy marketing guru to succeed.

You need to think of yourself and your art, as a business. When people come to me for help they often don’t see themselves in this light. They’re frustrated because they can’t get traction with their financial picture or with their craft.

I have good news. Solving both of these problems requires many of the same skills.

1. Determine how much money it takes to operate your financial life.

The most important part of your craft and your financial life is to make sure that you’re able to turn the lights on tomorrow. Sit down with a sheet of paper and list each item you must have to live another day. How much money is it? (more…)

Doing Something vs. Doing the Right Thing

Finance is often as much about planning as it is about doing. I know that sentiment isn’t popular. We live in a ready, fire, aim world. Remember the phrase “The early bird gets the worm?” Society values the first mover. While speed and making decisions are certainly important factors in your success, it’s as important to focus on the right task as it is to be performing a task at all.

Here’s a story about two women I’ve met recently:

Dora

Dora works a part time job at the coffee shop while she auditions for various acting roles. Her job pays $9.50 per hour and the only thing resembling a benefit is that they make really good coffee. Credit card companies are constantly after her, looking for a minimum payment. “If I work more hours, I’d be able to pay the bills,” she decides. Because she needs to make ends meet, Dora often works 30 hours a week (the max her boss will allow….but 10 more than usual) and is too tired to go after auditions as much as she knows she should. “Short term pain for long term gain,” she reminds herself.

Let’s do the math on Dora’s “gross” income:

Regular time = 20 hours x $9.50 per hour = $190

Extra time = 30 hours x $9.50 per hour = $285

$95 more for that extra time? It sure seems worth the effort to help pay bills.

…until you look at what it costs Dora. (more…)

How to Price Your Craft

Whether you’re paid in dollars or with your audience’s gratitude, I’ve written here before that you should think of your craft as a business. Not in the Ebenezer Scrooge “let’s make lots and lots of money” sense, but in the “I value my work here enough to take it seriously” sense.

If you’re lucky enough to be able to value your own art, then the next question is “how much should I charge?”

How you answer this question could spell the difference between success and failure.

Why Many New Artists Fail

Here’s the thought process of many new artists:

  1. I’m new.
  2. I need work.
  3. I’m not as good as those who are more established in my field.
  4. I’ll charge less to “get my foot in the door.”

I’ll tell you where this leads: within months you’re finished.

Why? You were so worried about overcharging that you underpriced yourself right out of the market.

If you don’t make enough money to pay your bills, you’ll become discouraged. I understand that part of being an artist is learning to throw off discouragement…we’ve all been down that road. But in this case, it’s more fatalistic. You begin to tell yourself “I’ll never make any money doing this.” Sadly, the stack of bills piling up in the corner confirms your suspicion. (more…)

Build Your Financial House of Brick

Remember the three little pigs? Sure you do. The moral of the nursery rhyme was simple:  build your house right the first time and it won’t be blown over.

In the arts, we’ve all heard this advice before. It’s the quality of our work that brings people back. We’ve watched suspiciously as performers with gimmicks shoot to the heights of fame for a few brief moments; but it’s only quality work that helps ensure a long, prosperous career.

Or in other words, using three little pigs speak:  If you’re building your house, make it brick.

I’ve often heard financial planning referred to by professionals as a house. A foundation laid on the sandy ground of debt and scattered income is bound to fall later. For the average person, building consistent, dependable income and paying down debt are jobs number one and two.

But we aren’t average, are we? (more…)

Why the New Credit Card Law Affects You

Honing a craft is a solitary activity. Excellence means many hours out of the spotlight, so that once you’re finally ready for prime-time, all of the finer points of the work are complete. To your audience it’s effortless; you’re a pro.

Unfortunately, this “solitary confinement” approach to excellence often clashes with successful money management. The government and business community are constantly revising rules that affect your ability to manage your money.

That’s precisely what happened late last month. A new credit card law went into place that has the potential to have a devastating effect on some artists.  I thought I’d give you my take on the rules and some ideas of how to respond, so that you aren’t surprised the next time you apply for credit.

Here’s the part of the ruling which could derail your planning:  you can no longer use spousal or overall household income to apply for credit.

What does this mean for artists?  If you’re working full-time (or near full-time) on your craft, your income may not yet be where you’d like it to be. First, you may be spending money that counts against your income, lowering the amount you can claim. Or, you may be still building skills to make money later. In either case, you may now find it difficult to secure credit in your name. (more…)

From the Mailbag

Hi Miata,

Should I set up a separate business account for the small amount I earn from my craft? It seems like overkill because I make so little.

– Jasmine

Dear Jasmine,

Absolutely.

Keeping craft money separate from household funds is important for many reasons. Here are a few:

  • Separate funds create a scorecard. Many artists want to track how they’re performing financially from their art. By keeping it separate, you’ll have a gauge of how far you’ve come. You’ll also know how far you need to go, which can be an important motivator.
  • Supplies for your craft should come from craft income whenever possible. This helps you become a better business person and make decisions based on profits and losses. By keeping purchases in line with income you’ll avoid investing hard-won money into a “hobby” and remember to make sound decisions whenever possible.

If the dollars you earn are very small, and you’re also not spending much money on your craft, you can start by setting up a personal savings account with your current bank. You won’t need a business account until you have a steady stream of income and/or expenses.

Check out Artist’s Prosperity 101 for clear and simple instruction on the financial separation of your business life from your personal life. AND, don’t forget to register for  The Power of Prosperity – a completely FREE teleseminar/webcast coming up on Thursday, July 21st. I’ll address your question in more detail and share lots of tips to help you powerfully manage your money as a Creative Soul!

How Do You Survive the Paycheck Roller Coaster?

Some of us like a good roller coaster ride. That feeling in your stomach as you look down the big hill. The realization that you’re voluntarily about to do something really, really stupid. It gives you a rush unlike many others.

However, I don’t think anyone wants that exciting, seat-of-your-pants rush with your paycheck.

Sadly, roller coaster income seems to come with the territory for many of us. How do you control your income stream when it’s difficult to predict what money is going to come in next week? How do you maintain a budget when you aren’t sure what the next pay day will bring?

Much like quality acting demands discipline and preparation to create a performance that appears spontaneous, maintaining your sanity with gyrating income requires you to perform a few steps so that your money can work on autopilot. With your money system in place, you’ll be better able to ride the ups and downs of pay days without having that pit in your stomach that the rent is due and you’re not sure where the money is going to come from.

Here are the basics…

(more…)

Grabbing the Reins

You’ve decided it’s time to take control of your money. Bills keep piling up, creditors incessantly call, and now you know it’s time to start. Sound familiar? You aren’t alone. Over fifty percent of Americans have some credit card debt. The housing crisis still isn’t over. The unemployment percentage hovers around double-digits.

Many of us need to grab the reins and find a plan.

Where to begin, though? How do you start turning pennies into dollars, and dollars into ten dollar bills? Here’s step number one:

Let’s get the word out the the way. The dirty “b” word.

Budget.

(more…)

What is your Financial Starting Point?

This week we are going to begin examining the second step of the Artist’s Prosperity System: Clear your financial clutter and get it organized for good! There are several elements involved in truly getting financially organized. It can be easy to feel a sense of overwhelm which keeps us from moving forward. Over the next few newsletters our goal is to guide you through each element—so just hang in there, go one step at a time and don’t stop!

Perhaps you are someone who has spent the time putting together a budget: you may even feel you try hard to work within that budget. Then why do you still have so little money every month? You should have some left over yet, when it is time for your next paycheck, you are counting the hours until you receive it so that you can go buy groceries. If this scenario sounds familiar, you are not alone.

So, how does this happen? Well, there are a few reasons.

(more…)