1. Emergency fund

This is a necessity for everyone, but it is especially crucial for artists. Most of our work tends to be freelance or temporary, with no guarantee of where the next paycheck is coming from (I am routinely jealous of my friends who have a steady income because their passions happen to be things like marketing and sales). We need a safety net in case the worst happens. An emergency fund is for those “unexpecteds”- large medical procedures, car accidents, a PANDEMIC, etc. How much should you have in this account? That depends. Although many personal finance gurus will say to have 3-6 months living expenses in this account, it’s going to look a little different for artists (we’ll get to living expenses in #2). Some will feel safe having $1,000-$2,000 in their fund, and some prefer upwards of $10,000. The point of this is to give yourself peace of mind for those incidentals. I have poor health insurance and high anxiety, therefore, I feel safer with a larger amount in my Emergency Fund. This fund is like ‘The Plunger Theory’- you want to have one before you need it.

2. Off-contract Buffer

So now back to that suggested amount of “3-6 months of living expenses”. People with steady income and employment can do fine with one emergency fund, but for artists, we need an extra buffer. Much of our time is spent between gigs or unemployed, and the panicked scramble to find or get back a minimum wage job after your contract ends is never fun. Enter the “Off-Contract Buffer”. This is different from an emergency fund because, unlike other people, artists know that unemployment and contract breaks are coming. It’s not an emergency, it’s inevitable; let’s plan for it. Again, this amount will vary person to person (i.e. someone living in NYC will have higher expenses than someone living in the midwest). This buffer allows you the time to take a breath when a gig is over knowing your rent for next month is covered. You have time to find a new source of income without the panic and urgency that normally comes with it. And if you can’t find a job in the two months between contracts? You’re covered. Are you burnt out after a particularly bad run of a show? You’re covered. Do you just want to take a week to drink wine and do puzzles before jumping back into things? YOU’RE COVERED.

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3. Taxes

Many of us are conditioned to hate tax-time; a lot of our work can be 1099’s (especially if you’re non-union), so it can be difficult to get and refund and a lot of times we end up owing money. But what if we took out our own taxes throughout the year, so that when tax-time comes, we don’t have to dip into our savings to pay it? Or even better, we get to give OURSELVES a refund? Open a second checking account- every time you deposit a paycheck that did not have taxes taken out of it, immediately move your tax percentage of your gross earnings into your second checking account (you can google your tax bracket, but it will normally be around 12%). Fun fact: you can nickname your different accounts to easily identify what they’re for!

4. Dues/Memberships

This is another thing that we know is coming, and as artists, we tend to have a TON. Whether it’s your Actors Access subscription, AEA/SAG-AFTRA dues, website renewal, IMDb account, we normally have a long list of monthly/yearly costs that are constantly popping up on our credit cards via autopay. The bad news: there’s no way around it. The good news: you know it’s coming and exactly how much it will cost! Take stock of your subscriptions and dues; get out a pen and paper, write down your list, and calculate your yearly cost. The final step is to set up a savings fund for this exact amount each year. Now you can avoid getting hit with an unexpected $20 domain name renewal that’s going to eat up the last of our grocery budget for the month. You have a fund for that!

5. Retirement

OPEN A ROTH IRA. Sorry, I don’t think some of you heard that- OPEN A ROTH IRA. This is an easy, low-risk way to invest in your future self. Unlike a 401(k), you can open one anytime and you are in complete control! You can google the different kinds of retirement accounts, but many freelance artists find this type is the best fit. Investing money isn’t about how much you put in, it’s about the consistency of how often you do it. Whether it’s putting in 25$ a month or $500, do it.The earlier you start investing in this account, the more you’ll make off the same amount of money invested later. That’s compound interest, baby! Because we love what we do, some of us may think, “I’ll never want to retire!”, but take a minute to think about your 60 year old self. She has creaky knees, an awesomely full career, and a strong desire to nap. Let’s give her a safety net so she can take a break…or a vacation.

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