Wouldn't it be nice to stop holding yourself back from awesome acting opportunities due to finances?
There's a proven way to have financial freedom so you can start focusing on your acting goals.
In this blog post, I'll show you how to work towards being financially free while saving up for acting expenses.
It's time to start making those paychecks pay off!
1. MANDATORY EXPENSES
First, take care of yourself.
You need food, water, and shelter at a minimum.
Having a detailed monthly budget is crucial to gaining financial freedom. It's much easier to take control of your money when you know your actual numbers, so stop guessing.
Log your income each time you make a deposit. Now work down your mandatory expenses until you either run out of money or pay them off in full.
If you aren't meeting those mandatory expenses, or there's not additional income coming once you meet them, you have an income problem.
You must find a way to increase your income if you're in this position, even if that means not having a life for a year. It's not forever. It's just a season. It will make a difference!
If you still have money leftover after paying your mandatory expenses, it's time for the next step.
2. EMERGENCY FUND
There are a handful of financial milestones you should follow that are proven to build wealth.
The very first milestone you need to hit after mandatory expenses is a $1,000 emergency fund because this will cover your butt in most emergencies.
You'll increase this fund later, but this is what you need for now.
Please hear me on this: your emergency fund should never be used for acting expenses. Ever.
Can you imagine being in the emergency room after a car wreck unable to pay your bill because you purchased headshots? I promise they won't seem that important if your life is on the line. That's an extreme scenario, but it paints the picture.
Once you reach the $1,000 goal, you'll replace this step with new milestones.
After you've addressed these first two steps each month, then and only then can you consider saving for acting expenses.
3. ACTING PURCHASES
Actors have a few different savings goals to focus on that most people don't.
If you really want financial freedom, pay off your debt before saving for acting expenses unless you meet the upcoming criteria.
If you have an agent, you already know that you're consistently receiving self-taped audition requests.
At some point it makes more sense to fund your own self-taping studio than to pay $40+ on a taping session each time you have an audition.
That fee doesn't even include gas. Since most actors are living in larger cities, gas isn't as cheap and the mileage adds up fast.
There are a few other essential business expenses you should consistently save for such as headshots, resume printing, and at least one casting site membership so that you can book work.
Drop your debt payments to their minimums if you need to in order to save for essential acting expenses, but I only advise this for actors who actually have an agent and have booked paid jobs.
The latter criteria are good signs that these investments will actually produce more income for you in the future, so they're worth saving for. Just make sure you cash flow them and avoid debt spending.
Nothing will change if you don't take action on these tips.
Getting control of your finances will make you less desperate in auditions because you won't need the money.
Create your monthly budget today so you don't waste a single dollar. The sooner you start, the longer you'll have to start building wealth. Time is your friend.
Each month is a fresh opportunity to take control of your money.
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HERE'S WHAT HAPPENED
When tax season for 2016 hit, my hubby yelled to me from the home office, "Baby! What tax deductions do you have for acting? Where are all of your check stubs?"
"I need to log all of that into the computer."
I had all of my check stubs and tax documents from my agency, but I didn't have a clue about my deductions. Also, I assumed (wrongly) that taxes had already been taken out of every paycheck.
Wouldn't it be great if the only expectation on us as actors was to simply act? Unfortunately, that's not the case.
Actors have administrative responsibilities in addition to working on their craft that need to be addressed, such as taxes.
"In this world nothing can be said to be certain, except death and taxes."
If you want acting to be more than a hobby, you need to start taking these other job-related responsibilities seriously. Other actors are taking them seriously and greatly increasing their chances of success. You can be that actor starting today.
In this blog post, I'll give you a few easy tax tips to follow that helped me receive over $2,000 in acting related tax write-offs. All you really need to do is get organized, and it's a lot easier than you think.
Disclosure: Please note that I am not a tax professional. I am simply sharing my personal experience. I encourage you to also consult with a certified tax professional.
YOU MUST PAY THE IRS
Remember that Benny Frank quote at the top of this post?
Too many creatives think they can slip through the cracks by ignoring the business side of acting, including taxes. It's possible that you get away with it for a few years, but it won't last!
Please know that if you aren't giving the IRS their cut of the money every single year, they will find out at some point. If you don't pay the IRS, you may be facing jail time for tax evasion, and your acting career will consist of you entertaining inmates.
I could say that I'm not trying to scare you, but I am because this is serious. If you're not convinced, then Google "MC Hammer taxes." They know. They always know.
I have actors tell me ten times a day, "You're good at the business part of acting. I need to start getting better at that." But then they don't take action because no one told them their next steps.
Just do tha thang!!!!! This is your future, your career, and your money. I want you to feel in control of it. Please don't buy into the lie that you can get rich and outsource everything without understanding it yourself.
1. SAVE NON-UNION OR 1099 TAXES
You'll notice that your SAG-AFTRA/W2 checks already have taxes deducted, but you need to double check all of your paychecks.
If you're working non-union or 1099 jobs, the checks you get from your agency most likely do not have taxes taken out of them yet. You 100% need to set aside money into a savings account so you have it to pay the government come tax season! Learn exactly how much to save in the tax section of my course Actor Boss Kickstart.
This is serious business. The IRS is not going to give you a break because you "didn't know." You may not even need to pay what's in your tax savings account if you have enough write-offs. It could be a wash, but you need the money saved just in case so you're not short come tax season.
If you don't need to use those savings, sweet! Use that extra moola for extra payments on your debt or put it into your emergency savings. If you're not sure which, read this post. Just don't be these guys. C'mon everybody, to the tune of Singing in the Rain!
"I'm siiiinging in a cell. Oh siiiinging in a cell."
2. TRACK YOUR MILEAGE
Are you tracking mileage when you drive for acting jobs? Yo, most of my tax write-offs came from mileage. It adds up fast! Again, check with a tax pro to be safe.
Here's the safest way to log mileage in my opinion:
Once you put this information into a spreadsheet, it will take you less than five minutes to do each time you log mileage.
3. KEEP YOUR RECEIPTS
Are you logging your receipts? Most actors are unsure which receipts to track, so they get overwhelmed and don't track anything. I say track everything.
You need a separate spreadsheet to log any receipts of acting-related expenses. Basically, receipts should include an acting expenses that aren't mileage.
While this doesn't technically count as a receipt, you should still log the square footage of your home self-taping studio if that's all you're using it for. I log the square footage of my studio, but I do not include the closet space because I use it for additional storage that isn't acting related.
I log absolutely everything, then let my tax pro decide what I can or can't deduct. If you're using a diy tax site, then you can still keep track of every expense, but wait until tax season to research and decide which deductions to keep.
Please be wary of doing your own taxes on a diy tax site. I once heard someone say that you would not perform your own surgery because you're not a trained surgeon, so then why would you try to navigate your own taxes if you don't know tax law? Makes sense.
Tax laws also change all of the time, and they did specifically for actors in 2017 (TCJA)! They may be different again at the time you're reading this post. Do you know what I don't have time to do? Learn tax laws. Neither do you.
ALL YOU REALLY NEED TO DO IS REPORT YOUR INCOME
The only thing you must do to survive tax season is to report your income:
If the government owes you money, they are not handing out free money. It's neither additional income nor a bonus check. What the government is saying is that they took too much money out of your paychecks, so they owe you back your money. It's not additional income. It doesn't even count as income, and and to prove it, the IRS is not going to charge you taxes on whatever money they give back to you because it's money you've already made.
DEDUCTIONS ARE TYPICALLY THE BIGGEST CONFUSION
You now know that all you really need to do is submit all of your income and tax document info into a tax site or to a tax pro, then pay if you owe anything. Once you've done that, you're technically done. Yay!
However, you'll get asked whether or not you have any deductions. This is what causes the most confusion for actors--whether or not they can deduct an expense. Your best weapon is organization. Organize all of your acting related pay and expenses, and you'll feel way more confident!
Just tracking your mileage could make a huge difference in your tax return, but how great would it be to feel confident that you have all of your tax info together should the IRS ever ask for it?
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HERE'S WHAT HAPPENED
My husband and I were debt free when we got married. After a few years, we picked up consumer debt in the form of two vehicles.
We had a decent income, so I didn't track it that closely. Then one day I heard about zero-based budgeting for the first time.
Once I plugged our budget into the budgeting tool, my chest got really tight. I realized we were spending every single penny--literally to the last penny--of our income. There was no wiggle room.
My mind was overwhelmed with thoughts about what we would do if we had an emergency.
The money struggle is real for actors who are conditioned to believe that we must struggle financially to be free to live our very financially risky dream.
Do you still believe the lie that you need to hit it big as an actor to be wealthy?
Actors can build wealth and live comfortably even without a million dollar income.
The trick is to get your budget under control by using zero-based budgeting, an essential budgeting tip for actors.
In this post I'll share how to build an actor budget with the awesome free budgeting tool that I've personally used to hit my financial goals.
HOW TO BUILD AN ACTOR BUDGET TIP 1: BUDGETING APP CRITERIA
I've tried a number of free budgeting apps. I deleted all of them within a matter of months until I found the one I currently use.
Let's discuss a few crucial criteria for a worthy budgeting app.
HOW TO BUILD AN ACTOR BUDGET TIP 2: BEST BUDGETING APP
The app I use meets the above criteria and then some.
I highly recommend you start using the free version of Every Dollar.
It's absolutely free so I'm NOT an affiliate. I'm just completely obsessed with how helpful it is.
There is a paid version that automatically loads all of your bank transactions, but it's not required. There's a way to use the free version without logging every single transaction by hand.
For anyone who upgrades, your payment just covers the cost the bank charges the company to link the account, so they're not even making a profit from it as far as I know.
Again, the free version is still amazing and highly effective. It's also puts your bank account's security at risk when you do connect it to another account, including budgeting tools.
Here are my results after using the free version for one year:
The less debt you have the more of your paycheck you get to keep, which means more fun acting investments!
The founder of the app always states in his podcast that using Every Dollar will make you feel like you got a raise each month regardless of your income. He wasn't kidding.
Since we've started zero-based budgeting with Every Dollar, we've found so much extra money in our budget each month.
It's crazy how much money you'll force yourself to save when you start looking at the numbers each week.
It also helps you decipher if you have an income problem, a spending problem, or both.
Knowing what you actually need each month will help you feel more in control of your finances.
It's better to say, "I'm short $500 this month, so where can I find $500 extra dollars?" instead of, "I don't know how much money I need, so I'll just keep blindly working my butt off and being broke!"
No more of that, Actor Boss.
HOW TO BUILD AN ACTOR BUDGET TIP 3: ZERO-BASED BUDGETING
Zero-based budgeting is key to being a financially healthy actor. You can't ignore it.
Zero-based budgeting means that every single dollar goes somewhere in your budget each month.
Get it? Every dollar? That's how they came up with the name.
It does not mean that you spend every single dollar. You should spend less than you make. Your total expenses should be less than your monthly income.
Mandatory expenses may include:
Listen, we started paying apartment rent again while we look for a house, and it's INSANE! I feel your pain.
Our grocery budget has also consistently increased $100 each month even though we eat a lot of the same foods, meal plan, and eat through all of our groceries each week (i.e. no food waste).
However, because we'd already implemented this system, we're financially okay. You will eventually have residual income each month.
So where's the rest of that money going?
The remaining dollars leftover after your mandatory expenses go into your current baby step.
I don't care if you only have $2 leftover at the end of the month. It doesn't go toward a pack of gum. It goes into your budget under debt payments or into your savings account until you get a fully funded emergency fund (3-6 months of living expenses).
Once you get into the habit of following this formula with a smaller amount of money, you'll be able to do it with a lot. Eventually, $2 doubles into $4, which doubles into $8 until you have more money left over than you ever thought you would.
Every Dollar will tell you at the top of the budgeting page if you've achieved a zero-based budget.
You must see the checkmark at the top before you "close out" your budget each month.
HOW TO BUILD AN ACTOR BUDGET TIP 4: MONEY GOALS THAT WORK
Your money needs goals so you know where to send those leftover dollars instead of wasting them.
Thankfully, Every Dollar comes equipped with what's known as The Baby Steps so you know how to best manage your leftover dollars.
These seven steps have a proven track record of helping everyday people like us build wealth.
Click on the icon that looks like a box to see all seven steps.
Every Dollar will track your progress automatically based on what's happening on your primary budgeting page.
HOW TO BUILD AN ACTOR BUDGET TIP 5: IRREGULAR INCOMES
Most actors have irregular incomes. No worries!
Every Dollar has an article on their blog about how to budget on an irregular income.
After you create an account, they'll send you great articles from their blog with savings tips and budgeting reminders depending on the month. (You can unsubscribe if you like.)
JUST START USING IT. You'll get more clarity the more you use the tool.
HOW TO BUILD AN ACTOR BUDGET TIP 6: INCREASE YOUR INCOME
It's very overwhelming when the cost of living increases and puts more stress on your budget. That stress decreases as your debt decreases and your savings increases.
Most people make the mistake of assuming they'll never get a raise. How can you plan to be a person that gets promoted? Ask your management what you need to do.
Please don't assume that taking on more responsibility at work with inhibit you from being an actor.
You'll need to submit your availability for a lot of auditions, but you won't book a majority of those roles, statistically speaking.
It's okay to tell casting you have open availability, then figure out your work schedule if you get booked. It really doesn't matter until you actually book, though, so no need to ask your boss every single time you have an audition.
In the meantime, an increased income will help you hit the Every Dollar goals faster, making you a financially healthy actor! That financial health will translate to more freedom for acting over time.
If you want to learn more about side hustles and passive income, click here to learn more about my online course Actor Boss Pro.
You may need to work multiple jobs for a while. It's possible you are now. I've been there. You can't do it forever, but it's just a season!
If your job asks you to work more hours without extra pay, that's not going to work. Tell them you'd love to, then ask how you'll be compensated for that time.
If they say you won't be compensated, then let them know you'd love more information once they have a compensation plan in place.
It's better for you to have a full-time job during the day, then work part-time somewhere at night for a while if the full-time job isn't going to give you a raise or pay you extra for additional work hours that your salary truly does not cover.
To clarify, do not give your day job more of your time and energy unless they're going to compensate you for it. I believe that when you are working, you should work to the best of your ability.
However, you must do what's best for your finances. If that means a hard stop at 5:00 pm before you go to another job that night, then you must protect your time until you become financially healthier.
That extra job may mean no dating and no pets for a while, but I want you to focus on the freedom you will have for those things in a few years.
I also want to clarify that avoiding debt altogether is the best way to avoid the stress of needing to work multiple jobs. I do love the idea of a side hustle for passive income, though.
It feels so unbelievably good to have a balanced budget at the end of each month.
The day we became debt free, it felt like a huge weight was lifted off my chest that I didn't even realize was there.
Budgeting keeps us debt free and stress free.
I hope you try the Every Dollar budgeting tool for a few months because I truly believe it's the first step to helping you build wealth as an actor, even if you have an average or below average income.
It may take you a few months to use zero-based budgeting correctly. It will start working if you keep plugging everything into the app truthfully and follow the baby steps in order.
What's your biggest budgeting challenge? Comment below and share your thoughts.
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The acting industry has changed a lot in recent years, especially with the introduction of self-taped auditions. If you've ever been curious about being one of those actors you watch on TV, go here to see which Actor Boss goals path is right for you.
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HEY ACTOR BOSS,
I'm a screen actor and certified goals coach focused on helping other screen actors that are not yet a household name achieve their most urgent goal.