My husband and I get along as well as an artist and a certified public accountant can. We actually have more in common than you would expect. We both love to shop real estate and see it as a great investment. We both value our financial independence and see spending as a trap, so we look for creative ways to avoid debt. We both tend to look outside of conventional ideas about investing, and have short and long-term plans to achieve financial success.
However, I’m not gonna lie: we fight about money. He’s a saver and I’m a spender. He’s a realist and I’m a dreamer. And you know what? I would be in horrible financial straits if it weren’t for him. I am so lucky we have those fights and I suspect he is, too.
When we first got together about fifteen years ago, I was a public school art teacher and he was working on a degree in accounting. He later got his CPA license and worked in corporate accounting for half a decade, when he decided that world was not a good fit for him. He has since moved on to a different career and I eventually got my MFA at MICA. Currently, I do a lot of different things to make a living: writing, editing, adjunct teaching, and, occasionally, selling artwork. If it weren’t for my husband’s insistence, at the time, to find an alternate way to pay my MICA tuition, I wouldn’t be able to afford to do all the relatively low-paying things I do, because I would be saddled with a huge debt.
Rule #1: Debt = Bad
It was my husband who suggested I attend MICA’s MFAST program, a low-residency MFA in Studio Art, which occurs over four intensive summers, rather than being a fulltime grad student. I had a studio in town. I was already making and exhibiting my work. I kept my job teaching art the whole time I was a grad student and was able to finish my MFA with a minimum of debt. Even though most of the students in my graduate program were employed, most took out loans: for tuition, for art supplies, for rent and fun in their summers in Baltimore. But not me.
My husband suggested I speak to the Director of Financial Services at MICA and offer to pay them in my own way: no loans, but a ‘pay as you go’ approach. This was not something that was offered to me as an option when I was accepted into grad school, and I didn’t think they would agree to this situation. But they did. For the entirety of graduate school, I worked at my job and saved and sent MICA a check for $1000 every month or two, so that each year was paid off by the time I attended school. I never would have come up with this idea on my own – I would have simply taken out loans and then struggled to pay them back, paying three or four times more than I did, based on the interest that accrued. I never would have been able to leave my fulltime teaching job to do the other things I wanted to do.
Rule #2: Make financial decisions with the help of an expert, or at least someone who knows more than you do.
I’m not saying this method of paying for graduate school is going to work for anyone else. If you desire an MFA, my suggestion would be to attend Towson University or another large university where you can go for free. But this is another topic. What I am trying to get at, by way of an example, is that artists need help making their financial decisions. We should all be talking to financial experts before we make major financial decisions, and not the “financial experts” who meet with you for free and then attempt to sell you their products. These are the decisions that impact our lives the most and yet most creative types have never spoken to an accountant or financial advisor to chart a course for a stable life going forward.
The world of finance is huge and intimidating and, worst of all, has to do with MATH. I always hear art students tell me they hate math and will avoid it at all costs. It’s no wonder that we ignore our finances, but this has got to stop. Successful artists run their careers like a business. We can all learn to do this better and focus our efforts on the stuff that really matters to us – making our work, growing our careers.
Rule #3: Know your Budget
So where to start? With the basics: a budget. Figuring out your budget is more complicated than you would expect. I am not very good at this at all! My husband is quintessentially frustrated with my inability to stick to a budget, partly, because I have not been honest with myself about what I need to make and spend.
There’s always something I need to buy – nothing extravagant, I’m talking doctor visits, baby shoes, birthday presents, dog medicine, art supplies … just the essentials. There never seems to be quite enough money for it all, but my husband makes it look easy. He has a budget. He sticks to it. He saves. He pays down debts. It’s irritating, but also pretty amazing.
We all have our ideas of how much we spend and earn, but the truth is most of us are kidding ourselves on purpose! We need to get real. How much money do you spend in a month? Most artists have no idea how much they actually spend. We don’t want to know! As Andrew Simonet suggested at the Artists U Workshop, write down everything you spend – every cent – for a month, without judgment. Multiply this by twelve and this is approximately what you need to make in a year. If this amount still leaves you stressed out, add in the amount you need to have to not be short. This is your annual budget.
If this budget amount is less than you make in a year (you can see the gross income on your tax forms for that) then it’s time to make some changes. Either you need to spend less or start earning more. Either solution to this problem is fine. Pretending there is no problem leads to more problems.
Rule #4: Your Budget tells you know when to say Yes and No
Your budget is a map. Once you know how much you need to earn on a weekly and monthly basis, you can figure out how much your time is worth. This is essential because it allows you to say no to projects and jobs that you can’t afford, opportunities and ‘exposure’ that seem good but will ultimately create more financial stress for you and focus on the things that nourish and sustain you.
Rule #5: Credit Cards = Bad
I know that everyone tells you that credit cards are great and they establish credit, but I haven’t had a credit card in years and my credit is fine. This is bullshit. All you need to have good credit is to pay your bills on time. Credit cards are a trap and are not helping you at all. For most of us, it makes us think it is okay to spend money we haven’t made yet. This is not a healthy or honest way to operate. It’s a trap. Credit cards keep us spending when we should save and create a false illusion of solvency and lead to debt. Even if you pay your credit card balance off every month – why bother? Why loan Visa your money to invest for a month? What do you get out of it? This is my opinion. Get rid of all credit cards.
Rule #6: Cash = Good
Debit cards are okay. I have a debit card – this is different, because it only lets you spend money you have earned. However, spending with a debit card feels different than spending with cash. It’s less REAL. It’s less painful to pay with a cute plastic card than it is with cash. It’s more convenient, and this is not helping you. NOBODY uses cash any more – people say it’s because cash isn’t convenient, but who ever said spending should be convenient? When you spend with cash, you have a finite amount and when it is gone, you can’t spend any more. You’re done. My husband’s system for sticking to a budget means he takes out a specific amount of cash every week – the same amount – and this is all he spends.
Rule #7: Savings Account = Good
Sometimes the car breaks down and we need to go outside of the cash budget. This is when you use your savings. This is what a savings account is for. It is suggested by most financial professionals that you have enough in your savings account to live for two months, just in case you lose your job or have some other emergency. This is also known as an “FU” Fund – in case you need to quit your job. Once you know what your monthly budget is, you can start saving this exact amount to keep on reserve. After you dip into your savings, pay it back. Once it is back to the same level, great. Leave it alone.
Rule #8: Budgets help you see the big picture
Other ways to use your budget: If there is an area of waste, or a way to save, you will find it. During Artists U, Simonet admitted that he used to stress over buying bagels and coffee and felt guilty on a daily basis, but realized, after looking at his budget, that most of his money was going to childcare. Creative scheduling allowed Simonet and his wife to restructure and cut back drastically – saving thousands a year – on childcare. This is an example of how figuring out your budget, looking at it from a big picture perspective, can help you gain clarity about your spending and saving.
Does this all seem basic and silly? Maybe it is, but this is where we start. Once we understand what and why we spend, and what we need to live without stress about money, we can apply our creative thinking skills to solving the problem of living responsibly and sustainably. It also means we can refocus our energy on our artwork, career, and creative endeavors. Financial responsibility means greater freedom, greater opportunity, and less stress.
Financial Art Assignment #1: Figure out your weekly, monthly, and yearly budget.
$Art$ is an ongoing series of essays and research about financial issues for the creative class.
* Author Cara Ober is the Editor at Bmoreart. At this point, you probably know way too much about her.
** Images by New Orleans-based artist Dan Tague