Welcome back to our monthly series Ask Angella, where we do exactly that.

If you’ve ever had a potentially sensitive creative question, we want you to throw it our way so that we can hand it over to Angella: our resident art writer, expert, and all-around kind, funny and wise human being. Here’s the question we’ll tackle this month:

“This is less of a question and more of a cry for help: MONEY. IS. HARD. Can you share some of the best financial advice you’ve received?” 

It’s easier to tell yourself you’re bad with money than it is to take a cold, hard look at your finances. (Sorry for the Tony Robinson tone but this is tough love.) You don’t have to wonder where all your money went and why you don’t have any savings at all. Financial literacy is a skill you’ll be honing for the rest of your working life, so why not start ASAP? I’ve put together some starter tips with links and search terms so you can go deeper into your ~financial journey~. Let’s dive in like Scrooge McDuck into a pile of coins.

Happiness / Money by Marc Johns

Run 4 Ya Money by Caroline Mills

Put. Money. Away.

Rule number one: pay yourself first. Determine what a reasonable amount to put away is. Start with last month’s income. How much did you make and what did you spend it on? Reviewing last month’s purchases can be eye-opening and sometimes painful. (I spent how much on going out last month?!) Once you figure what you spent and earned you can determine a proper and reasonable budget. (I recommend using the app Mint to keep track of your spending and set budgeting goals.)

No doubt, this can be tricky. Income instability and precarity are a tough reality for freelancers and makes it difficult to determine what your month to month income will look like. One hack as I was taught and if you can swing it (haven’t swung it yet), is to save up at least one month’s worth of income so you’re always at least one month ahead as you chop away at your freelance work. You know when you’re broke and waiting on the next payment to land and you suddenly become incredible at cutting back on spending (mostly because you have to and not having money is scary)? You can do that for more than half the month and save up a good chunk of cash in the meanwhile. Even if it’s a super small amount, it’s worth putting away.

After you put it away don’t touch it. This is a rainy day fund and even though rainy days come often in the gig economy, it must grow. I recommend getting an online savings account like CapitalOne360 and avoid getting a card. You can set up monthly transfers in the part of the month when you have the most cash in your bank account. That way your savings money is hard to reach. Once you have an asset base (in this example, a savings account) you’ll not only be able to keep yourself afloat, you’ll feel that much less anxious about trying to survive in the gig economy in the first place.

 

New Money by Aftr Drk

Burning Money by John Holcroft

Cut Needless Spending

For me, my needless spending used to happen at the thrift store. I accumulated so many sweaters that I knew I’d never wear and landed at the end of each month wondering where all my cash went. Do you really need Netflix? Can you share the family plan on Spotify with a handful of friends? How many books is too many? (Trick question: you can never have enough books but also, maybe read all the books you have in your house before you buy more?) Make an effort to pay down debt, and to cancel accounts you no longer use. It sounds basic, but it does wonders!

Freelance taxes are real, y’all

Keep your artistic income separate from other income by keeping two or more accounts. This makes it easier to stay on top of any business related payments and later deductions. As an artist, you’re allowed to write off a handful of business related purchases including art supplies, books, studio rental fees, and workshops. Cool right? Intuit has an app called Self-Employed that helps you organize your credit and debit card purchases by business or personal. This makes it ten times easier when tax time comes around.

Keep track of your assignments, invoices, and payments. I use a Google Sheet to keep track of each freelance job, the deadline date, the date I invoiced and the amount I invoiced for, as well as when I was paid with the tax percentage (I do 25% but I round up) configured so I know how much of my payment to put away for taxes. Keep copies of all tax documents, invoices, and contracts in a desktop folder, or if you’re the old fashioned type, print them out and put them in a filing binder organized by year. I know it sounds annoying but it’s gonna save your life once April comes around. If you freelance for a living, I recommend filing quarterly (that’s four times a year folks). Since you’re freelance, you’re technically self-employed. The IRS has more info on filing four times (smaller amounts to pay!) here. Additionally, writer and pal Rosemary Donahue has a great blog post about keeping organized as a freelancer here.

BBHMM (Rihanna translation: Get Paid!)

Perhaps the most harrowing part of freelancing is making sure you get paid on time. Seems simple but a good portion of a freelancers time is spent chasing money. After your pitch is assigned and you’ve agreed to the amount of payment being offered, ask your editor what the payment process is like so you know what to expect. Most places pay within 30 days, others up to 60 days (not cool), and others pay earlier which is nice and great because you need to eat. After the specified amount of time has passed, send a quick email to your editor and accountant contact citing your contract and payment specifications and ask for your paycheck. In a blog post about the topic, writer Alana Massey recommends using a clear subject line indicating the action required, contract information with dates, invoice submission dates, asking for a confirmation reply. She also recommends you forego apologizing (it’s your money),

LLC or nah?

According to 1099Nation, upwards of 11% of working individuals work full-time as freelancers. Once you get to a point when you’re making considerable and regular money as a freelancer, it’s worth your while to become a legit business entity. It’s likely that when you fill out your tax forms for jobs you check “sole proprietor” but there are other options you can take like a Limited License Corporation (LLC) or an S Corp. Selecting the right business entity will protect your personal assets from any liability you may incur as a business owner and it may also offer you some significant tax advantages. A single member LLC (meaning its just you) offers a legal advantage as well, meaning you keep your personal assets and money separate from your professional income. Conversely, establishing an S corp also helps you avoid paying both personal and corporate taxes. However, S corp owners, unlike owners of sole proprietorships and LLCs, pay themselves salaries and receive dividends from any additional profits the business may earn. This also helps you build your credit. Intuit has detailed info here and I also recommend checking out Creative Capitals how-to guide for artists.

Money is complicated but it doesn’t have to be difficult to manage. The more you learn, the more empowered you become. You, your work, and your time is valuable so act like it…!

Hustle by Text Guy

High Horse by Nicole Moss

Money by ilyya

Stephanie Dixon

Editorial Director

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