How Dancers Can Break the Paycheck to Paycheck Cycle

Hi Superstar!

I'm ridiculously excited to be here on the Working Dancer with you this week.

I’m here today because my area of expertise just so happens to address a common problem myself and other artists have noticed within our broad community.

Who am I? I’m Katherine Pomerantz, the face and name behind The Bookkeeping Artist. I’m a money mentor for artistic entrepreneurs, and I’m here to help you pursue your passion full-time by changing the way you think and feel about money. I don’t just teach the mindset tools you need to FEEL richer, I offer quick n’ dirty practical guides so you can actually BE richer as well.

So what’s this problem I need to address? Oh Superstar, I know you know. The biggest money problem within the artistic community is that there isn’t enough money!

Why is art always portrayed as the antithesis of business? Who says that passion and profit are two separate things? Why are we expected to sacrifice our material well-being, our health, our youth, and our lives to die upon that pillar of Art (special emphasis on the capital A)?

It’s the glamour of that “Starving Artist” lifestyle, and I hate that.

I remember what my early career was like: the agonizing uncertainty of auditions, the infrequent paychecks, the exhaustion of working two (or even three) jobs, and the added financial stress of maintaining a very precise set of skills and equipment. On my worst days, there were some dreams I never thought I’d achieve.

It wasn’t that I was irresponsible with my money. I started saving when I was young, but every time I built up a little nest egg somehow it all disappeared. There was a real ebb and flow to my money problems. I’d have a few good months, and then all of sudden I’d be broke again and I wouldn’t know how to make it until that next paycheck.  

I was bleeding money, and I didn’t know why.

I went to more auditions. I took a second job. But these measures were merely band aids, they weren’t cures for my money woes.

I bled and bled money and I couldn’t find the wound.

Now that I’m bookkeeper, I meet a lot of artists with the same problem. They work like mad, and yet they can’t survive those lean months between jobs. They live paycheck to paycheck, and are absolutely desperate for that next job because they don’t know if they’ll survive until it comes along. I bet you yourself can relate.

Fortunately, I now know how to staunch the flow. Now I’m positively thriving, and I didn’t need more cash to do it.

So what finally worked? What do I now teach my money mindset clients?

Budgeting. I don’t care if you’ve heard it or tried it before. This one actually works.

Budgeting may mean cutting back a little, but you are in control of when and where that happens. I never give any advice except that which empowers you to live the life YOU want.

Besides, budgeting really is the only way to break that nasty paycheck to paycheck cycle you’re in. Sure, you can always get another job or start a side business or wait around for that promotion, but I promise more money is not the solution to your money problem.

On top of that, how does working more hours further your ultimate goal of being a performer? How does that leave you happy, healthy, and free to make more art? No Superstar, I’d rather give you a system you can start TODAY that will make you think and feel richer.

Because, do you know what I’ve discovered in all my years working for successful businesses?

Being rich has very little to do with how much money you actually have, and everything to do with how your money is used.

A Budget Is…

  1. A System that YOU Design and YOU Control
  2.  A Way for You to Prioritize What Really Matters To You
  3.  A Way for You to Plan for the Future

A Budget is NOT…

  1. A Strict Set of Rules that Absolutely Must Be Followed to the Letter
  2. A Set It and Forget It System
  3.  Time Consuming

I’m serious. Think of everything you gain with an effective budget.  You:

  • Stop wondering if you have enough money at the end of every month
  • Start taking control of your own finances, instead of letting them control you
  • Start building that “rich” future you deserve
  • Finally break that paycheck to paycheck cycle!

Start with What You Made Last Year

And I mean the exact dollar amount. Although there is some wiggle room when planning for the future, specific numbers are ultimately more useful. Guessimates will not create the truly customized, practical guide your budget should be.

Don’t know the exact dollar amount of your income last year? Don’t worry, there is an easy way to find out. Dig up your most recent tax return. (Remember that you’re self employed as a performer and should therefore work with your total income BEFORE any tax adjustments. You are responsible for paying your own taxes when you are self-employed and you need to treat tax as its own expense category.)   

Got your number, Superstar? Good, this is your starting point. This is your Rough Annual Budget.

It’s hard to think of an entire year at once though, so the first thing you need to do is divide your annual budget by twelve.

This is a very important number. This is your Monthly Budget. This is the amount you are allowed to spend every month without going into debt.

Again, reference your tax return. This is a great resource to see how much you spent on business related items last year. For personal expenses, however, you will need to go back through your credit card and bank statements. Banks will often provide three months worth of statements online, but if possible go back even farther.

Once you have your statements, separate each transaction into its own category. How much are you spending on groceries? How much on gas? How much on rent? Utilities? Are you going out to eat? Taking dance lessons? Make a category for EVERYTHING. Separate your spending by month.

Think about what’s important to you. Do you dream of having a new car or of taking a spiritual retreat around the world? Make a separate category for it and put away a small amount each month. Do you want to build up an emergency fund? Or start saving for retirement? Maybe you’d like to just squeeze a little extra out to go on date nights once a month? Make it a category, make room for it in your budget, and you’ll be amazed how far those few dollars and cents can take you!

I also highly recommend you give yourself a Fun Budget every month. This is a small portion of money that you’ll be allowed to spend on whatever you’d like. Having a Fun Budget was how I curbed my impulse buys and how I stopped feeling guilty about going out to eat with friends. It was all part of my limited Fun Budget money, and so I knew I could afford it.

At the end of every month, pull your budget back out and compare it your actual spending. Just as when you were building your budget, break down all your monthly expenses by category. Compare your totals. Celebrate when you come under budget and make a plan of attack for those categories in which you don’t.

Always remember WHY you divided your budget the way you did and WHY it’s important you match your goals.  

Every three months, take a little time to re-evaluate your budget.

Do you feel restricted or miserable every time you think about your finances? That’s a sure sign you need to make some adjustments! Maybe you can’t cut your grocery bill as much as you originally thought or maybe your utilities bills increased. But perhaps you’re consistently undercutting another category and that extra can be reallocated.

Adjust your budget as you need but always remember to keep your long-term goals in mind. Before you make any changes to your spending, ask yourself if your savings goals are being met.

At the end of the year see how you did overall, and build yourself next year’s budget. It shouldn’t take you much time at all since you’ll already have so much information about your spending and money habits to work from.

With better money awareness, you’ll not just dream about the lifestyle you want, you’ll understand how much that lifestyle will cost you and you’ll understand the steps it takes to achieve it.


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About the Author

Katherine is a theatrical director, performer, and teacher and is NOT a starving artist, thank you very much. Although she has struggled with money in the past, Katherine eventually realized this was merely one symptom of a greater bad business mindset permeating the artistic community. She'd had enough!

Now, she combats this harmful money monster as a bookkeeper and money mentor for artistic entrepreneurs. If you want to turn your unique creative skills into a full-time business, visit her here:http://www.bookkeepingartist.com