The real title of this message is: The 10 Commandments of Personal Finance for Actors. But that’s not very sexy. Money in our business tends to be a taboo subject and even though every actor wants it, many work for free for the love of the art. People in our business tend to be broke – a lot, so here’s my take on CHANGING that for yourself forever!
It starts before you have a ton of it. Practice these commandments NOW and when you work for it and make more money acting, you’ll have the habits and discipline to make it work for you. It’s simple, but not easy, only because you may not be in the habit of abundant thinking and ACTion. Stay the course and you’ll begin to notice the magic happen…
10. Thou Shalt Take ACTion
Reading about how to improve your personal finances is a start, but it has absolutely no meaning if you don’t take the action of putting what you learn into motion. Before you can get anywhere with your personal finances, you need to begin — right now. If you are reading this, you already know that you should be taking steps to get your personal finances in order.
Print out these commandments and place the page where you will see it every day, so that you are reminded that money is important and a priority in your life! Commit to taking some kind of action each and every day to try to improve your situation.
9. Thou Shalt Pay Off All Credit Card Debt
Credit card debt is, in most cases, the #1 enemy to your personal finances. It can have a huge negative effect on your future as well as feel like a burden presently if your credit card bills are not under control. Managing debt is possible even when your income is sporadic. If at all possible pay, your credit card bills every single month to not carry a balance. Waiting for that big future payday to take care of a big debt it is folly.
Pay off balances with the highest interest rate first. As you eliminate the debt from the higher balance cards, put them away in a drawer and don’t use them anymore. Continue the process with the card with the next highest rate, etc. until your debt is paid off. Easier said than done, I know, but focusing on eliminating debt will improve your personal finance position immensely.
8. Thou Shalt Understand the Difference Between Wants and Needs
To keep your finances in perspective, you need to understand the difference between wants and needs. There is nothing inherently wrong with small luxuries, a latte here and there or an evening out with friends. You deserve to be able to enjoy many of the nonessential things you have. But it is important to realize that wants are not needs. If you master this skill, your finances will be in much better shape.
Take some time to critically look at your true needs vs. your wants. If you truly need that latte, I get it, but if you’re struggling to pay your rent every month and your true desire is to enter your short film in a festival with a $75 entry fee and you can’t because of your latte needs, well, this is where you’ll need to change something up. The distinction between wants and needs will truly shift your “starving artist” conversation for good.
7. Thou Shalt Live on Less Than You Earn
When I first heard this commandment I was like “whaaaaaat? Nobody actually does that, right?” Well truth be told, abundantly thinking and financially secure people do. There are no two ways around this one. If you want to keep your personal finances in order, you need to live on less money than you make. That means buying stuff for your biz that you need like Actors Access, dues and membership fees and yes, those lattes, all have to cost less than you currently make.
Hate the word budget? So do I so I have taken on a wonderful money management system I learned from T. Harv Eker of Peak Potentials, LLC that I teach in one of my seminars. It makes commandment #7 easy peasy. It’s either that or figuring out a way to increase your income from “side jobs” so that you can spend more, but still less than you earn in total. Either of these is perfectly fine.
The easiest way to live on less is to make a list of where your money is going each month, then look for replacements. For example, shopping for a new cable company or switching phone plans will leave you with the same services for less. The same concept works for products. If you purchase a couple of soft drinks each day, instead of can by can, buy a 2 liter bottle. What the above examples have in common is that you are still getting the same items or services that you are getting today, but at a better price. This frees up money, allowing you to live the same lifestyle you have been enjoying for less.
6. Thou Shalt Pay Yourself First
I know you’ve heard this one before and have thought it was a great idea yet the majority of actors I know leave it for last. Because of this there’s no such thing as a savings account and the paycheck to sporadic paycheck lifestyle of the starving artist perpetuates.
Before you pay any of your other bills, you should pay yourself a minimum of 10% of all money that comes your way. Money earned from a straight job, acting income, residuals, birthday money from Grandma – all of it! This money is taken off the top, FIRST and put into an account that is not part of your immediate spending. This is your financial future!
Go to your bank and set it up so that your paycheck is automatically deposited if you have a regular job, if possible. Then set it up so that an automatic payment is immediately taken from your paycheck into a specified account that is not used for your monthly expenses. This could be a savings account or an IRA or if you like to have your money make money while you’re sleeping, put it into the stock market after you’ve gotten an education in investing there.
If the first 5 commandments make cents to you, ahem, sense to you, then stay tuned for the next post with the TOP 5 commandments. I’d love to hear from you with your thoughts on money. “Money doesn’t grow on trees”; “It takes money to make money”; “Money is the root of all evil”; “A penny saved is a penny earned”. What thoughts about money have shaped your life? Please share in the comments section below.