And thanks for reading! This week I’d like to spend some time talking about Money Management.
Just a reminder here that when I use the term “actor” I mean it to encompass all forms of acting including voice, stage, and screen. What follows applies relatively equally to all of these forms of acting.
If you are independently wealthy…
Or, if you are married to someone who is…stop reading now and wait for next week’s post. What we are about to talk about are ways to manage the scarce finances you have so that you can continue to:
- Pursue your acting career
- Avoid living out of your car
- Eat regularly
- Stay married (if you are)
- Avoid bankruptcy
It’s a touchy subject and nobody really likes to talk about money. Well, they love to talk about what they’d do if they HAD money, but not how much they actually have. What this post aims to do is give you some common sense (which seems to be not so common actually) ways to manage what finances you have to counteract the hit-or-miss nature of this career and avoid the four decades break I took to have a 9-5 job before getting back into acting.
All kidding aside, this industry can be brutal on your financial health and that leads to stress, which affects your performance and can reduce the number of paid gigs you actually book. It’s like a self-licking lollipop, or a self-fulfilling prophecy or whatever euphemism you enjoy describing how much it can suck to not know where (or when) your next paycheck is coming. There ARE some steps you can take to reduce stress and help you continue to live through the lean times.
I’ve talked about this (several times really) before, but nearly everyone, especially early in your career (like the first 10-15 years) is going to need some sort of survival job. If at all possible, stay away from corporate jobs especially ones that require a lot of travel. Also, the military is probably not a good survival job (take it from me). It needs to be something fairly flexible for the times you book work, or something that you can quit when you do and fairly quickly find another when you are between gigs. Servers in a restaurant is popular, and (assuming you have a reliable vehicle) I like to recommend something like Lyft, Uber, DoorDash or Grubhub where you only work when you want to and don’t get demerits for missing several days. In any case, you definitely need some sort of regular, fairly reliable income.
Yeah, I know, it sounds like a dirty word. In actuality a budget is a necessary tool for everyone, but ESPECIALLY for actors who sometimes have periods of “unemployment”. It’s a tool…but it’s NOT a tool for bludgeoning your spouse or SO with when they buy an unplanned happy meal. It’s a tool to use to plan your spending in such a way that you can make sure all your bills are paid and you are setting aside some funds for the lean times.
It’s only as restrictive as YOU want
Your budget is…well…yours. It’s not a restrictive tool, or at least it is only as restrictive as YOU want it to be. This is all about helping you achieve your goals. The assumption with your budget is that the goal you are reaching for is more important than whatever unplanned extravagance you are considering. A budget first helps you identify your “means” and then helps you live within them…or identify the fact you need to do something to increase those means.
But…how do you establish a budget?
Budgeting is a lot easier than most people think. Honestly, it is ALL about balancing expenses with income. The two primary steps to establishing a budget are to identify what your regular income is (you can average it by month if it is not consistent) and what your regular expenses are. The first part is easy: Go back over the last 12 months and add up all your income, then divide by 12. That should tell you your average monthly income. Budget to that amount.
Determine average expenses
For three months, track everything you spend money on. Yeah, I know that’s a pain, and you likely won’t capture 100%, but go for at least 99%. Start with “The 4 Walls”: Housing, Utilities, Food and Transportation. These are the bare minimum you’ll need to fund. Then figure out how much your Starbucks, fast food and other incidental expenses are. Add them all up, average them (divide by three since you are tracking them for three months) and those are your expenses. This step will also help you identify where financial “leaks” are. Financial leaks are where you are spending more than you believe you are, you may be surprised.
Plug the leaks!
You may find that you are spending way more buying lunch every day, or on your daily coffee shop run or SOMEthing, than you think you are. Then you just have to decide (for yourself) whether to continue those habits or stop them. My guess is there are a number of things you are doing that could be curtailed and would help bring your expenses more in line with your income. However you do it, it is imperative that your expenses come in lower than your income. Either stop spending on some things or figure out how to bring in extra income.
When establishing your budget don’t forget to include funds for ongoing training/coaching and those items that only happen a couple times a year like car insurance and Christmas. If you budget a small amount each month for those things, then don’t spend it on something else, you’ll have the money for them when they happen and won’t be stressed about them then either.
A quick word about Debt
Debt is the death of healthy finances, especially when your income is a bit sporadic like an actor’s. I’m not going to berate you, but keep in mind that debt means you are dedicating money to someone that you have not yet earned, and you are paying to use your “future” money. There is a reason a bank’s headquarters are a lot bigger than the average person’s house. Other than a mortgage (if you have one) do everything you can to avoid debt. If you have credit cards, spend only as much on them as you can pay off every month. Get a copy of Dave Ramsey’s Total Money Makeover and follow it for a method to get out of debt and stay that way.
Once you have identified all of your income/expenses and have yourself living within your means, start putting aside 10% (minimum) or 15% toward an emergency fund (3-6 months of expenses set aside for those lean times). And there WILL be lean times, but if you know your expenses can be covered your stress level will go WAY down. When your emergency fund is fully funded, take that same 10-15% and save it for retirement, or your kids college. Saving is really the only way to BUILD wealth.
The message here is:
Take control of your finances and KEEP control of them. It is PARTICULARLY important for actors whose income is not set and who will likely have periods of (acting) unemployment to manage their money properly. But even when you book that dream gig and get paid big bucks don’t go wild and buy that yacht you are drooling over. Appearances to the contrary, there are number of celebrities who seem uber-wealthy but are actually broke.
Not bragging, but to give you an example, here is my financial story – take from it what you will. My late wife and I earned in excess of $200,000.00 a year between us. We were living paycheck-to-paycheck and had (besides our home) $75,000.00 in consumer debt. We decided to take control, followed Dave Ramsey’s advice and in 18 months we were debt free other than our mortgage. Two years later we had more than $100,000.00 in savings and a fully funded emergency fund. It’s a good thing too, because when she passed (with no life insurance) I would not have been able to keep up (and would have had to finance her funeral!); I would have had to declare bankruptcy.
Your situation is different
Everyone’s is. We thought we were in a really good place financially, but we were one tragedy away from financial devastation. Today I have a reasonably high net worth and can pursue my acting career without having to worry about paying the bills. I believe that is at least partially responsible for whatever success I’ve experienced because I can just ACT in an audition and not worry about “getting a job”. No matter where you are today financially, you can take control of your finances, change your financial position AND pursue your acting career without the stress of needing to book a gig. You might be surprised how many more jobs you book after that!
NOTE: I am happy to help with setting up your budget or discussing ways to get control of your finances. Feel free to reach out with any questions: firstname.lastname@example.org.