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Financial Resolutions For The Artist.

Happy New Year!  Broadway Joe here, the writer behind Creative Finance.  It’s a whole new year, and you know what that means… time to put some resolutions in place and set some intention on how to best achieve control of your creative finances in 2022.  Let’s talk about some financial resolutions for the artist you might want to consider implementing this new year.

We’re not going to discuss anything new today, but rather this post should serve as a deepening of what we already know.  If you’re new to the blog I’ll share some links of posts past as we go.  We’re going to go right back to basics and talk about our tracking income and expenses, emergency funds, and where to keep our money.

Let’s reinforce these important topics as we look towards the new year!

It’s Called The Bend…And Track!

The first content post here at Creative Finance is all about tracking your income and expenses.  Why?  Because it’s a very good place to start.

I truly believe that tracking your income and expenses is the cornerstone of any successful financial strategy and should absolutely be one of the first core financial resolutions for the artist.

How can Jenna make a balanced budget pie if she doesn’t know how many eggs are in the fridge?

How is Caroline Thibodeaux going to know how many of Noah’s coins she’s taking home that night?

Where does George Gibbs’ allowance go week in and week out?  Can he really spend that much on strawberry phosphate?!?

Financial Resolutions For The Artist

The point being, you need to know how much money you make, and how much of that money you spend.

Why is this so important?  Here’s the simple mantra you need to remember on mastering personal finance:  Spend less money than you earn, then save and invest the rest.  That’s it.

Well Patti can explain it better than I can.  But in short, you need to let compound interest do it’s thing!  And the more time on your side, the better.

Here’s an example: let’s say Sandy Cheeks is able to squirrel away $20,000, and invests that $20k in a simple S&P 500 index fund.  Even if Ms. Cheeks doesn’t invest another dime, that $20k will grow on average ~10% per year.

$20,000 in year one, becomes $22,000 in year two.  Becomes $24,200 in year three.  And so on.

And by year thirty?  Well with an average annual 10% return, $20,0000 becomes ~$317,000!

I haven’t met a person in my life who wouldn’t want that.  To see a smaller sum of money become a gigantic, retirement supporting sum of money.

Some of you might be thinking, “C’mon $20k?!  That’s crazy, I can’t even keep up with my credit cards, student loans, you name it, every month!”.

To which I say, I get it reader.  I really do.  We’ve all been there.

But the solution, I promise you, is tracking your income and expenses.  You have to get under the hood of the car to fix the engine.  Thus, this is the first of the financial resolutions for the artist we’ll discuss today.

And the second resolution?

You Know What To Do, Save-mour

Core concept number two my friends, your emergency fund.

The very second content post I published here at Creative Finance was about being prepared, and why you should have an emergency fund.

The most obvious emergency we can use as an example is the current worldwide pandemic, caused by COVID-19.

At the time of my emergency fund post from July 8th, 2020, we were only 4 months into experiencing how this pandemic has changed our daily lives, probably forever.

Fast forward 18 more months and here we are in January 2022, still dealing with the new way of the world thanks for COVID-19, and most recently the Omicron variant.

I’m not a scientist.  I’m not a fortune-teller.  I am undoubtedly no seer of any kind.

But with my emergency fund in place, it doesn’t matter one bit that I can’t predict the future.

Tony Award Winning Soothsayer, Katrina Lenk.

Even back in July 2020 I never in my wildest dreams could have imagined we’d still be dealing with rampant viral surges even now.  But here we are.  It’s always so very important, to be prepared.

Looking at financial resolutions for the artist, make a priority of building your emergency fund in 2022.  Most personal finance professionals recommend you keep between three to six months expenses set aside in savings just in case of an emergency that might limit your access to money and income.

Omicron tore through New York and the entire country this past month, and what happened?  More shows cancelled, postponed, and decided to stay dark while we ride this newest wave out.  Folks are suddenly finding themselves without work the next few months.  It goes without saying, but it’s heartbreaking all over again.  The absolute worst kind of Groundhog Day.

But those that have an emergency fund in place are weathering the newest developments differently.  There is a genuine peace of mind that comes with knowing you are protected.

My primary business is Off Broadway and developmental theatrical general management.  It’s a crazy time to be working in that space as shows are forced to make very real decisions on how to proceed the next few months.  Thankfully, I can look at my emergency fund on my computer screen and sleep a little more easily knowing I’ve saved money for exactly this moment.

One of my favorite accounts in my emergency fund strategy is my Digital Credit Union account.  I keep $1,000 with DCU and make a generous amount of interest (6.17%) on that $1k, for just letting it sit there, in case of emergency.  Feel free to check out DCU here and just write me if you have any questions about them, or other banks and credit unions you might come across.

Finale Thoughts

Some of my favorite advice I like to give out when it comes to personally finance is something I first heard regarding when to get started investing your money.

The best time to start investing, is 10 years ago.

The second-best time to start, is today.

And the same is true for most all of personal finance.  The sooner you start implementing these financial resolutions for the artist into your life, the better off you’re going to be.

We are still weathering a pretty darn awful emergency as a world at the moment.  But there are other emergencies that happen all the time.  Give yourself the gift of a safety net that will catch you no matter what the world throws your way.

And how will you know how much money to set aside for an emergency?  That’s why you need to track your income and expenses.

How do you know how much 3 months of expenses in your life is, if you’re not actually noting what you spend on week-to-week basis?

You can do this in so many ways.  Google Sheets, YNAB, Mint, Personal Capital.  It’s 2022 and there are multitudes of tools out there to help you.  Do some research and find the method that works best for you.

Do yourself a favor and make your financial resolutions your top resolutions this new year.

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