How do you jump from the stigma of “starving artist” to thriving artist? Why do so many actors subscribe to the #thestruggleisreal life? Is there a way to make income, save money, and be an actor all at the same time?
Luckily the answer is yes, but it does require some investigation to find a path that works for you. After years of studying, going through BFA and MFA programs, moving to NYC with an agent, auditioning, producing, and working on TV and stage, it wasn’t until I started The Actor CEO Podcast and got to talk to over 100 working industry professionals that I actually started to receive the detailed financial knowledge that we all should have had coming into the business.
I’ve taken their insight and boiled it down to the first 6 most important pieces of financial info that I believe actors need to know. But before you check out the list, there is one overarching idea about being an actor that I think allows this all to make much more sense.
DON’T FORGET:
As an actor YOU ARE A BUSINESS. You are an entrepreneur and CEO of your own company. The building/factory is YOU and the products you sell are YOUR UNIQUE SKILLS. Therefore you can and should maintain, invest, insure, and improve your business so that you can stay in business over the long term.
Now let’s get crackin’.
1) Know EVERYTHING about your money
The first step towards improving your financial health as an artist is knowing where your money is going. Break down all of your costs per month and know exactly what it takes for you to meet all of your expenses including bi-annual union dues, yearly subscriptions and any debt you’re trying to pay off.
“At its core, being smart with your money is really about knowing where your money is going and making decisions really intentionally.” – Stefanie O’Connell, author of The Broke and Beautiful Life, from episode 102 of ‘The Actor CEO Podcast’
Acting is a biz that has its highs and lows. You can be flush with cash after booking a gig and then go months with nothing scheduled. You must understand in detail what it takes to meet all your costs because if you cannot then you only put undue pressure on your acting life. You can’t take this or that gig ‘cause you’re forced into working extra shifts, not to mention that you become more desperate for each potential job that comes along and that desperation does not make for a good audition. You feel me, right? We’ve all been in that position, and it’s not the best for creative freedom so set yourself up for success by making a really honest assessment of your current financial situation. Then you can plan accordingly.
2) Build Your Budget
I know we just planned out exactly where our money is going and what our costs are. Essentially that plan is your budget, but I wanted to share some ways to improve on that core plan.
For instance, in episode 27 of The Actor CEO Podcast, professional actor, tax preparer for artists, and owner of Empire Tax Prep.com, Dominic Comperatore suggested a reverse budget!
Basically that means:
- You create a budget so you know exactly what your monthly spend is.
- Then you set up an additional bank account where you deposit all of your income into that bank account (Direct deposit, checks, gifts, etc.).
- Once that account reaches the amount you spend in a month, you can write yourself a check (a personal paycheck) for the next month.
- What happens is everything over your “personal paycheck” amount will be saved in the account and not be seen or touched by you, thus allowing you to immediately start saving faster.
Has your brain kinda melted? No worries. You can watch this 3 minute below.
3) Saving More Money
Y’all… this is where the digital revolution can really save your a** by saving your money. The reverse budget mentioned above is one way to ensure any extra cash you get is saved, but you should absolutely take advantage of the digital apps and tools you can use to take small but consistent steps towards either spending less, saving more or BOTH!
- Use a tool like MINT.com to track your spending and see where you can cut down on costs. It’s quick, easy to use, gives you detailed graphs and charts, and offers a ton of advice and resources that you can use to improve your financial situation. Plus it’s free. And not for nothing… I have a friend who paid off his student loans using MINT while working in theater so a system like that can work!
- Use a “keep the change” type program from your bank. Programs like these round up your charges to your debit card and put that extra change into your savings account. It can be an easy and fast way to get some extra money into savings during the month.
- Ensure that your savings account is connected to your debit account to protect you from overdraft. While this may eat up the change you’ve been saving from your lattes, it’s a lot better than paying a $30 fee for every overdraft transaction. Hopefully you won’t need this protection, but if you do, it can save you a lot of money.
- Put your extra change to work by actually investing it! ACORNS helps you invest your money for pennies on the dollar… LITERALLY! Your $4.50 burger becomes $5.00 and that extra .50 goes into an investment account that can actually earn money! Imagine what it would feel like at the end of the year to see the extra $500 dollars you normally spend on temporary things actually growing into a real savings fund!
4) Actor Taxes
It’s such an important topic that I have two interviews on the podcast about actor taxes – episode 103 with Sandra Karas, attorney, SAG-AFTRA board member, AEA Secretary-Treasurer, and Director of VITA; and episode 23 with Dominic Comperatore, tax preparer, owner of EmpireTaxPrep.com.
Like it or not it’s important to understand how your taxes as an actor and artist work because you will be able to keep them in mind throughout the year and therefore make the entire process easier when tax time comes around.
While it can feel overwhelming especially as the tax code changes, there are still some core principles that will allow you to get the money you’re owed and keep the money you deserve even if you are audited.
- Keep your receipts. Put them in a shoebox, ziploc bag or a file of some sort. You spend REAL FREAKIN’ MONEY on your acting biz and you should track that. From gas and mileage driving to gigs, MTA trips to auditions, or printing your sides, headshots, postcards and more, you will rack up some pretty significant costs as an actor. Having a designated bank account or card to put those expenses on is handy for end of the year accounting, but you MUST keep those receipts to prove that $10 expense for resume paper at Staples was actually on resume paper and not shampoo.
THIS WILL SAVE YOU IN AN AUDIT.
- Don’t be under-withheld. When you fill out your W-4 form at your job, put 0 in the line that states “How many withholding allowances are you claiming?” If you’re married, you will check the box that states “withhold at higher single rate” and put 0. This tip comes from NYC tax attorney Sandra Karas who knows that as of 2018 actors have a higher chance of owing money thanks to the Tax Cuts and Jobs Act that has eliminated miscellaneous itemized business expenses but also the personal exemption and the dependent exemptions.
- Can I deduct clothing, haircuts or makeup? This is a common misconception actors make. There are many rumors, stories and falsehoods that wind their way around dressing rooms and sets from one actor to another. It’s important to work with a professional who knows the IRS and tax code as they are right now who can help you determine exactly what expenses are legitimate business expenses and what are not. Sorry, but if you can wear it in your everyday life… it’s not deductible.
- Keep track of your earnings and add up your pay stubs. Sometimes employers will under-report your earnings to the IRS (restaurants have been guilty of this) and claim you made less than you did. There is no way for you to prove otherwise unless you track your earnings and compare them to the W-2 you get at the end of the year. If the IRS comes to you and says you didn’t make as much as you said you did, then you better have some way to defend your income.
- Work with a professional. Spend the money to work with a pro who can not only ensure you’re taking the most deductions you can, your submission is accurate and will help you if you ever get into an audit, but guess what… the fee you pay IS DEDUCTIBLE!
5) Making More Money (or Serious Side Jobs)
If you’re lucky enough to be working as a full time actor, congratulations! That is not the case for most actors and even those who find themselves employed for extended periods may also find themselves without employment for long periods. As that is the case, it’s important to have alternative streams of income. Here is where we are in luck.
We live in the “Golden Age for Creatives.” While you can certainly still take on the typical side jobs of an actor like catering, waiting tables, or bartending, you are not forced into such a select few jobs that allow you the income and flexibility to make money and pursue your acting career at the same time.
There is more opportunity than ever for creative individuals to make money online, through apps and services, or even working with businesses and organizations that are in desperate need for creative thinkers to help them transition into this new economy and marketplace.
Kristine Oller from CashflowForCreatives.com joined me in episode 106 and shared so many unique opportunities that she has seen actors take advantage of and even helped other artists unlock within themselves. Jobs like babysitting, web design, event planner, for-hire bridesmaid, office design consultant, videographer, sound engineer, brand photographer, stylist, virtual assistant, or social media manager are just a few that Kristine listed. I used to build sets, hang lights and drive trucks, and now I run a biz that produces social media content for businesses. I get to hire all my creative friends!
I even spoke to an actor/filmmaker that now runs a 6 figure Facebook ads agency! (That episode isn’t out yet, but stay tuned to Actor CEO to hear how she does it.)
Imagine your passion, hobby or secret skill becoming not just some beer money but actually a legitimate side hustle that takes care of your expenses in a way that gives you the freedom to be fully creative and engaged in your acting career! That’s totally possible now without the stress of working double shifts and hoping your schedule works out.
Kristine says one of the best and fastest ways to figuring out what could make you some serious side income is to ask other people what they think you’re good at or really look at what others ask your advice on or help with. There is something in there that you’re already able to do and may even already have a demanding customer base.
6) Long Term Planning
Ok, friends. If you’ve stuck with me this long then you should hear me out on this last tip. Building a sustainable business and career is about planning for the future as much as it’s about solving the immediate challenges. If you know where you want to be in 5 years, then you’ll know what your next move should be in 5 days. Little steps will take you all the way towards your ultimate goals, but without some planning, foresight, and commitment, you won’t have that opportunity. And I will tell you this, even actors whom I spoke with who were series regulars on TV shows admitted that they thought that would be the thing that took their career to the next level. Guess what… as soon as the show wrapped… it was right back to the hustle. So don’t be waiting for this magical, mystical job that is going to allow you to get all your finances in order, pay off your student loan, and finally allow you the freedom to save for retirement or achieve your life’s goals. There is no magic waiting around the corner. If you don’t plan now, then you will not be at all prepared when you do land a great opportunity.
So how do you prepare? Taking all of these tips to heart is a great start! Then start working with a professional or finding useful resources that help you: learn what Individual Retirement Account options you have, if you can invest some of your income in the stock market, use Robinhood, which lets you trade for free!), and how your budget or living situation could improve to guarantee better financial health over the long term. It’s often hard to make accurate assessments when we are so close to our own financial stress and anxiety. A qualified financial planner could go a long way in terms of giving you an actionable plan that makes sense and is easy to follow, but also delivers piece of mind.
In an upcoming episode, I was thrilled to talk with Darren Sussman (founder of Theatermania and Ovationtix) who was just interviewed in Forbes.com about his new company The Institute for Financial Wellness for the Arts (TheIFWA.com). Darren is on a mission to fill the gap between the artists who need to develop sustainability in their lives and the financial services industry that can provide so much help. Actors and other artists are too often overlooked by those who can assist with financial planning, and we rarely receive accurate education regarding money from the schools or training we took. So there is a real need to allow the same support small businesses, start-ups, and other organizations get to help them with their long term financial success and The Institute for Financial Wellness for the Arts aims to provide that support and access.
I hope you’ve found this article useful. I know it can seem boring or tedious to go over some of the nitty gritty details when it comes to money, and you may be disappointed that this article wasn’t filled with a bunch of “get rich quick” ideas, but I truly believe that artists and especially actors have more control over their careers now than ever before and that there are more creative opportunities out there than ever in the history of our business. The surest way to capitalize on that and build a sustainable creative career is to know where you want to be, develop a plan to get there, and commit to executing on that plan day in and day out. Sure enough, you will surpass all the others who are looking for the short cut or waiting around for their agent or manager to make them a star. You’re in control. Turn your creativity into the engine that rockets you far into a future full of success!
Give your feedback in the comments or share what you would add to this list. You can also share your thoughts on social media and include me with @actorceo.
I’ll see you among the stars,
Mike
Mike Moreno is the host of The Actor CEO Podcast and creator of ActorCEO.com where he provides resources for actors to treat their careers like a business, including the Free 5 Day/5 Month Planner that lets you plan out your career goals and key action steps for the next 5 months in just 5 days!
