Get Your Sh*t Together is a one-week mini blog series all about – you guessed it – getting your shit together. We'll be exploring tactics and resources, talking to some creative biz experts, and have some downloadable worksheets, all to help you get your shit together too.
Oh, money.
We all have a bit of a turbulent relationship with money, yes? Especially creatives. Value, worth, and quality. Energy, expertise, and general love of doing what we do. How do we put a price on doing that?
And then, what do you do with it once you start making it? I've heard of "starving" artists stockpiling their income because they don't feel like it's their money, but the money of their business, and therefore shouldn't be used to pay for personal things groceries or rent.
It's all very complex, and something I've played around with to see what works for me for years.
How I Manage My Money
Setting Monthly Financial Goals
At the beginning of every year I take stock of my previous year's income and set monthly goals for the rest of the year based on how I did per month the previous year. I do this on paper (of course; I like to be able to spread everything out in front of me) and keep it in a goal notebook near my desk so that at the end of every month I can easily update and keep track.
Download a printable Monthly Income Goal Tracker >>
Tracking Income
Though I do the usual Quickbooks bookkeeping, I still have to track income on paper. It doesn't feel real to me unless I can hold it in my hands. Every time a payment comes through my email or snail mail I take out my binder-clipped income tracking sheets and record it in pen. At the end of each sheet I tally up the income for that section and move on. At the end of the month I add up all the dollars and log it in the yearly goal tracker above.
Download a printable Income Tracker >>
Business Reserves
I get uncomfortable once my business account falls below $1,500, and full blown stressed out when my business account falls below $1,000. The below $1,000 has only happened once or twice in the past two or three years, but you can bet that those were sleepless nights.
I believe it's good to know what your threshold is, and even to allow yourself to stress out about it. My threshold is as low as I can go and still pay my clients' hosting fees, with a little cushion for a "last meal" grocery trip. It's not pretty, but it keeps me safe.
Paying Myself
I've never been one of those who had a problem paying myself. However, I do struggle with paying myself on a regular schedule. My ongoing goal is to pay myself twice a month: 1st and 15th. But, lo and behold, some nonsense always happens, or that semi-annual bill the we always forget about comes up. This is something we're actively attempting to regulate.
Budgeting and Spending
David and I like to spend money. I'm of the school of thinking that I am going to enjoy the fruits of my labor, not stockpile it away. We do save some, but we also eat really well (our monthly grocery budget is insane, but we have no intentions of making it lower; eating well is important to us) and we travel whenever possible. We're enjoying our live now.
But we do also budget. We use mint.com daily to track things, we have grocery budgets, and travel budgets. We're not going all willy-nilly, but we do plan for the fun things that give us the quality of life that we work hard for.
Trust Yourself, and Madam Universe
Every time my business account has fallen below that scary line, the universe has sent a job my way soon after. I use my project trackers to know where I need to put my energy to get that next project, and everything always works out alright. Always.
keeping my sh*t together
Once I quit my 9-to-5 day job and started working for myself I've found myself thinking about money A LOT. It can be a roller coaster ride to be in charge of your own paycheck – from overwhelming to exciting to get-me-off-this-f*cking-roller-coaster. I wrote about thinking of money as energy (as seen here in our Letters to Creative Entrepreneurs) to find worthiness around getting paid, and I recently shared our secret to manifesting money over at the Braid blog. I encourage you to read those. Because eff the starving artist mentality.
But today I want to share how I really keep my shit together when it comes to managing my money – both personally and professionally. My deep dark secret to being rich on a modest 5-figure salary is that I live in Oklahoma City. The cost of living here is dirt cheap. I bought my super cute 1920s 1,500 sq. ft. historical bungalow for $110,000. But you can buy a super modern abode or an old historical mansion for a mortgage that is equivalent to rent on a Manhattan or San Francisco studio. The trade off is that Oklahoma City is not NYC or SF. We don't have quite the culture or resources those big cities have but what we thrive in is the space to create. The creative community here is tight-knit – and because it's not crazy expensive to live here we can all own our homes, afford to eat at our friends' farm-to-table restaurants, launch new businesses and not feel the desperation of working 80 hours a week just to keep the lights on.
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On a more practical level here are three really simple things you can do to get your shit together when it comes to money:
• Know how much you make and track how much you spend. It seems like a no-brainer but this simple math of money going in and money going out can be surprisingly complicated for entrepreneurs to track. Mint.com and Freshbooks.com are great personal and professional money-tracking / accounting user-friendly apps.
• Hire an accountant – they'll inform you on how to set up your business, what to write-off as expenses, and will keep you from getting audited by the IRS.
• Pay yourself – I've found that a lot of the creatives I consult and coach don't pay themselves. What the what!? The act of moving money from your business account to your personal account is empowering and will make you feel legit.
Kathleen Shannon blogs about her life and work on andkathleen.com, and is a brand wonder woman with her sister at Braid Creative. Her posts about creatives and money are some of my favorite in the world. The Braid ECourse on Dream Customer Catching (you know, those people who pay you) is open now for registration.
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Get Your Sh*t Together Blog Series
GYST: Daily
GYST: Nourishing
GYST: Goals and Projects
GYST: Money
GYST: Delegating
