Rare is the actor who goes straight from drama school into well-paid, professional work, and keeps working at top dollar. Few are the performers who work steadily and lucratively enough to fund necessary expenses--like training, headshots, and a professional wardrobe?without strain. All too many know intimately the actor's catch-22: time or money. You're not doomed to financial failure until your big break, however. By savvy management and learning how to make use of the general financial advice out there, you can keep moving forward without going broke. And, fortunately, there is a lot of help available, from theatre service organizations to financial planners to books and the World Wide Web.
Your Life and Your Career: What's It Costing You?
Authors as diverse as Julia Cameron in "The Artist's Way" to Joe Dominguez and Vicki Robin in "Your Money or Your Life" (popular with the simple-living crowd) tout one very simple tool for getting a handle on your finances: Write down every penny in or out of your life. AUGH! How aggravating! Like flossing and daily exercise, it's easy once you get used to it. But why bother? It's nitpicky, inconvenient, and petty. It's also a time-tested technique, a smart recommendation that turns up in business and personal finance books of all types, and it can help you afford your next round of headshots, or whatever else you want, more easily.
How? It works like this: Record every expense you have in a day (be it the rent or a roll of breath mints), as well as any income you receive, in a notebook the minute you make the purchase or receive the check. Tomorrow you turn the page and record that day's spending and income. Keep this up for one month. At the end of a month, add it up by category. There before you in black and white will be exactly what you spent on coffee to go from Starbuck's, how much you spent on toiletries like shampoo and shaving cream, and how much your acting career expenses cost you in the past 30 days or so.
Now you can see what your life and career is costing you, and how much is coming in. Some of the categories may horrify you; others may be a pleasant surprise. You may realize that your favorite little luxury is a bargain after all, but a routine purchase you don't give much thought to is draining you dry. With this information, you can begin to strategize. If you need to come up with a photographer's fee, now you know where to find the money. Perhaps for two months you could live without magazines, buy supermarket soap instead of fancy shower gel, and curtail your taxi and cell phone use. Every person will find different categories taking up too much room, or have certain luxury items they refuse to live without. Most people find some easy, painless places to trim, and are willing to make a few temporary sacrifices in order to get what they really want more.
By keeping track of your daily income and expenses, you become conscious of your financial choices. If you've ever gone to the ATM for cash, then found yourself with an empty wallet and no idea where the money went the very next day, you know what unconscious spending feels like. It's frustrating, and can leave you feeling hopeless, like you'll never get ahead. Conscious spending helps you focus on your goals. When you purchase something, you'll know why you're buying it, how much it is costing you, and whether or not it's helping you get what you really want in life.
Launching an acting career doesn't come cheap. Headshots, classes, demo tapes, and resumes are just the start. You'll want to stay in shape, get regular dental and medical care, keep that haircut looking fresh and beautiful, and go to the theatre as often as you can. The discipline of writing down every little purchase and bill paid for a month is a small aggravation that can really pay dividends. Once you're in the habit, you may want to continue indefinitely. The benefits continue indefinitely, too.
Step Away from the Edge of the Platform
Performers like the edge, and audiences like it, too. Whether it's the breathtaking stunt or the emotional choice, the action that goes almost too far is irresistible theatre. When applied to personal finance, this penchant for playing it close has less thrilling results. Getting down to your last dime releases a lot of adrenaline all right, but rarely does it deliver the exhilarating high of a trapeze act or a stunning second act confrontation. Saving money bit by bit is a slower, duller kind of pleasure. Maybe that's why it's so hard for some people to achieve.
You may have heard the old financial rule of thumb that a person with regular employment needs at least three months of living expenses in liquid funds, and a self-employed person needs at least six months of the same. Most actors will need that six-month cushion, especially those who may tour, work regionally, or want to go back and forth between coasts for work. The more varied and erratic your work life may be, the more you'll appreciate a fat nest egg. But how do you amass that kind of cash?
Financial planners have one solid, sound piece of advice they give everyone, rich or poor: "Pay yourself first. Think of the amount you want to save each month as a bill you have to pay. Decide how you will save or invest each month and take it off the top of your income," say Rick Chernok of Salomon Smith Barney. Most people who intend to save, but don't manage to do so, fail because they pay themselves last, and there isn't always anything left for the last one in line. Of course, once you've paid yourself and salted that money away, you have to leave it alone. Dipping in every month for a new outfit or the unexpected expense will whittle away your savings until you have nothing left. It's these predictable frustrations that interfere with good intentions. Having a real plan helps save you from yourself.
Angela Osborne is a freelance director and writer who has worked in television for years. She realized that she had a bit of money in the Directors Guild pension fund, a bit in the Writers Guild fund, a little cash stashed here, a little there. She was managing to save a bit, but she didn't have a plan, and it wasn't adding up. Instead of giving up, she got help. She hired a professional financial planner, Lore Gordon of the Cowan Financial Group, and became a convert to the "pay yourself first" philosophy. This past May, Osborne produced a seminar for The New York Coalition of Professional Women in the Arts and Media, Inc. on the topic of financial planning for freelance artists, inviting Gordon and Chernok to speak. "You've got to pay yourself first. You've got to have a plan," says Osborne, who admits she wishes she'd learned to do that much, much earlier in her career.
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