Subscribe now to and start applying to auditions!

Financial Advice

5 Steps to Financial Success in 2017

5 Steps to Financial Success in 2017
Photo Source: Sergey Nivens/shutterstock.com

The new year is right around the corner, and while there are a ton of things that we can’t control, money is not one of them. I know that numbers with a dollar sign in front of them can create stress, but just like anything else in life, practice makes perfect. And in 2017, you can create a healthy money practice that will put you on the road to financial success.

You’re probably going back over everything you’ve spent in 2016 to maximize your tax deductions (and if you’re not, you should be), so this is a great time to get going!

After 11 years of working on budgets with people who make anywhere from the thousands to the millions, budgets are the key component to keeping the money you make. Not surprisingly, most of our spending happens in the places we barely notice, the places we visit the most and examine the least. How much did you spend at Starbucks this year? How about all of those little Amazon purchases? iTunes? Guacamole at Chipotle? (It’s extra.) Tracking those tiny expenses is a great exercise and can have massive long-term effects.

Budgets are not as intimidating or hard as they seem and are the best weapon in your financial triumph arsenal. Here are five easy steps to getting it done:

1. Let’s take care of the hardest part first: List your income. To cover all your bases, run through all of the following steps with your actual 2016 income, half of your 2016 income, as well as double your actual 2016 income. Run Step 5 with each of those numbers. Budgets are not handcuffs, they’re guidelines, and this helps you know your limits.

2. Since we don’t know what your income will be, percentages are our best friends.

a. Fifteen to 25 percent for savings. This is for the future, not to be used this year except for emergencies.

b. Fifteen to 30 percent for taxes (talk to your accountant—this is totally based on how you get paid). This stays in a separate account so you’re prepared for your quarterly or year-end tax bill. And, in some cases, will even create your own personal tax return!

c. Five to 15 percent for investing back in your business. Putting this aside from Day 1 prepares you for all the amazing business opportunities or expenses that pop up, like new headshots, updating a website, acting classes, or going to L.A. for pilot season.

d. Now take your income (from Step 1) and subtract what you got for 2a, 2b, and 2c.

READ: “7 Financial Terms Actors Should Know”

3. List your fixed monthly and annual expenses (rent, cellphone, cable, internet, MetroCard, union dues, gas, groceries, etc.). Keep the monthly expenses whole, divide the annual ones by 12, and add to the monthlies.

4. List your debt payments (credit cards, student loans, mortgage, car loan).

5. Take the number you got at the end of Step 2, subtract your fixed expenses and your debt payments. What’s left is for your monthly fun-spenses. This is where your entertainment, vacation, shopping, and other fun things come from. This number is essentially your spending money. Boom, budget.

Now for the implementation, because a budget means nothing unless you live it. How do you live it? Trial and error. A great exercise is to take out your weekly fun-spenses amount in cash at the beginning of the week. That’s all you get. See what it feels like to actually spend money, not just swipe a card.

Financial health requires the same time and attention as our physical health. And they both require practice. Every day won’t be the best budgeting day of your life. So you wake up tomorrow and start again. It’s a practice and a process. And as long as you keep with it, you will become a master.

Looking for a manager to help with your financial decisions? Browse Backstage’s Call Sheet manager listings!

 

What did you think of this story?
Leave a Facebook Comment: