Money, Honey: Part 1

October 17, 2013

Last week I attended one of Springboard For The Arts' Business Skills For Artists workshops. The topic was particularly exciting (drumroll please).....


Honestly, most of the workshop was a pretty good affirmation of the work I've put into having a clue about self-employed finances. This will be my ninth year of filing as self-employed, so I sure hope that I'm making progress on learning about tax rules. For six of those years I did my taxes with Quicken. Now I have an accountant at Fox Tax, where they specialize in working with artists and small businesses. I am so grateful I made the switch, because I want someone else in charge of the numbers. I like being advised on when to take a particular deduction, or who gives me gentle advice about future planning, and quarterly tax payments.

This will be our second year filing as an LLC, and second year paying quarterly taxes. I've learned that taxes necessitate a very noticeable amount of our income. And, I've learned that there's a lot I don't know about money. As I mentioned before, I'd like to know more.

I wrote about preparing for tax time over here. I was raised with self-employed parents, and I've learned a lot over the years watching them. Namely: save your receipts! And, keep good records of most things.

But there's still a lot I don't know about money management. I've never had a job where they put money in an 401K for me, or pay my health insurance. (OK-- I take that back: for brief periods of time I worked for restaurants where they paid my health insurance. Honestly, I'd rather pay my own: if they drop your hours, you lose your insurance.)

But the point is: how do I make future financial plans on a fluctuating income? How does money feel less daunting? How do we get ready to buy our own house (we currently live in one we co-own with family) or make having a kid a financially viable option (if we decide that's what we want) or plan for retirement or even plan for the repairs that my janky automobile requires?

So that's why I'm thinking about being money savvy-- because no one else is going to do it for me. I've decided to work towards knowing more about money. I'm channeling Tara King's advice: Do whatever it takes to befriend money, even if it means logging one receipt. I know from the past few years that this is a process. Going to the Springboard workshop reminded me that I've learned a lot in the past few years-- also, that I still have a lot to learn. We've all got to start somewhere, right?

Here are a few steps I took in the very beginning of my money journey:
  • Deciding on a good way of tracking everything I was spending: I really like
  • Opening a business checking account: It makes it easier to keep track of what we're spending for the business, and what we pay ourselves.
  • Keeping a millage log for my car and an expense diary-- a calendar where I keep track of meetings, etc... that might relate to expenses.
  • Saving receipts. 
  • Checking in at least quarterly with our business (and personal) finances.
More Recent Steps:
  • Deciding on a business accounting/invoicing system: We started using Freshbooks (a cloud-based accounting system) for all business invoicing and income tracking. I love it-- I can see when clients have viewed invoices, keep track of sales tax (new for digital delivery of video in Minnesota), and organize business expenses.
  • Reading about money: Suze Orman looks pretty cheesy on the cover of The Money Book for the Young, Fabulous & Broke (oh, that title makes me cringe), but the information is great. I mean, I don't know anything about investing. Money therapist Bari Tessler is sharing money memoirs on her blog-- people sharing openly about their relationship with money. 
  • Meeting with savvy money people: My accountant is smart. In the past, I've always just met with him at tax time. I was reminded today that he's way more helpful before tax time. I've also entertained meeting with a personal financial planner. Do you have one?
  • Checking in with my finances on a regular basis, rather than dodging it and crossing my fingers.
I've written before about money and art. In the past I've looked for income solely outside my personal artistic projects, and sometimes gone into significant debt. My upcoming project is the first art-making I've paid myself for in 10 years. Depending on how you look at that, that's really gross or really exciting. Why would I work for good money for other artists, only to pay myself nothing for my own work? It seems problematic.

Future Steps:

Last year at Giant Steps, Kate O'Reilly taught a workshop that discussed pricing. In it she reminded freelancers/business owners to charge 40% more than we would if we worked for a business. For instance: if I work for a business, they pay for my computer, office supplies,  health insurance, etc... When I work for myself, I front that cost. So I guess my future goal is to excuse myself from money guilt. And to keep reading and setting goals for myself. I'm going to set one now: to create a new budget in the next month based on my income trends from the past year. That's been really hard for me, with the whole income fluctuation thing. I plan on posting monthly about my progress.

How did you get money smarts? Did you parents-- or some other role model-- teach you about money? Do you have a favorite money book?


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