As much as we may not want to admit it, the truth is that financial insecurity is routinely present in the life of an actor. The best way to combat uncertainties about money is first to acknowledge that you’ll face sometimes lengthy periods of unemployment, then to recognize the aspects of your financial life that are within your power, and finally to immediately implement tools that allow you to take control of those areas.
How do you control your income stream when it’s difficult to predict what money is going to come in next week? How do you maintain a budget when you aren’t sure what the next payday will bring? What should you do when you’re unemployed?
Much like quality acting demands discipline and preparation to create a performance that appears spontaneous, maintaining your sanity with gyrating income requires you to perform a few steps so that your money can work on autopilot.
1. Set up a “business” bank account that’s difficult to reach.
This will likely not be a formal business account although from this point forward you’ll treat it as such. You should be able to place money into this account easily, but cut up the ATM card so that withdrawals are challenging. All deposits should go into this account when you’re paid, whether from acting or other sideline employment.
2. Calculate exactly how much you need to live each month.
List the expenses you can’t live without. Financial planners call these committed expenses. We’ll call them rent, basic groceries, utilities, and costs associated with your work among others. Now write those expenses you can live without, but currently enjoy. Financial planners call these discretionary expenses, but we’ll just call them coffee, eating out, and other lifestyle expenses.
Before calculating your final number, ask yourself if there are ways to lower your expenses. Most people begin by cutting discretionary expenses. Generally, this isn’t the place professionals look, because although there might be a few opportunities to save a dollar, the large savings is nearly always in the committed expenses. Can you somehow change your rent situation? Are there opportunities to lower utilities? Comb through each expense and ask yourself if there is a method to lower some costs.
What Actors Need to Know About Finances to Make a Living
3. Assess ways you might improve your income.
Until you land that series regular or other consistent acting work, you should maintain a sideline source of income. This is a critical step to having the kind of stability that allows you to pursue your career from a place of strength. Trust that there are ways to earn that are congruent with your life goals, and then go out and find or create that work.
4. Create an automatic transfer.
Set up an automatic transfer of funds from your new “business” bank account every couple of weeks to your regular personal account. This is your paycheck to yourself. If you can’t maintain your entire budget from this income stream, you’ll have to find ways to cut expenses so that funds remain in the account to sustain you during lean months and when you’re unemployed.
Initially, it’s important to make your transfers from the business account to your personal spending account small enough that the business account grows. You’re going to have months when money isn’t coming in as quickly or at all, and you’ll need this reserve to meet your basic expenses. This system works if you’re able to calculate a minimum amount of money to transfer each month and stick to it. Regardless of this month’s work, you’ll be able to plan your groceries, rent, transportation, and other costs.
Using these few steps you’ve successfully set up a program that allows you to focus on your craft rather than on the next check and autopilot your financial picture.
Instead of focusing on the restrictions of this system, celebrate using your money in a way that’s appropriate to who you are and the things that are most important to you. When you hold a greater stake in achieving your own priorities, it encourages you to move forward in a spirit of personal competition, making the process active and exciting. Hold yourself accountable to your predetermined expense totals. For example, if you’ve decided you will spend $400 this month on groceries, monitor your receipts to make sure you reach your targets.
The periods in between acting jobs don’t have to feel like a financial hurricane. Advance planning is a powerful shelter from the winds of financial surprise. It will help you to weather the current situation, and ensure that there are clear skies and sunny days ahead.
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and do not necessarily reflect the opinions of Backstage or its staff.
