Making a Budget: Keeping Track of Spending

The life of an artist isn’t easy. If you want to support yourself with your art, there are going to be lean times. How lean depends on two things:

  1. How successful you are in your work
  2. How successful you are as a money manager

There are many ways to save money and I will give you plenty of tips as we go (I hope you bookmark this guide), but first things first: You must learn to create, implement and follow a budget. It is critical to surviving on a limited income. In order to understand where your money goes once you get it, you have to track it.

Save_Your_Money
Give youself a raise today. Photo credit: http://401kcalculator.org

Keeping Track of Your Expenses

To understand where your money goes, follow it. Watch where it is spent by recording your everyday expenses. This is a great exercise that can turn into a great habit. To track your expenses, write down every penny you spend in a day. Repeat this the next day and then the next. It is my hope that it becomes a part of your permanent daily ritual. Until that time, try to record your expenses for a minimum of four weeks. I started recording my daily expenses about ten years ago and I haven’t stopped since. You can record your expenses in a small spiral notebook, or use an expense organizer log book. I have graduated to using spreadsheets in Google Docs (which is free, btw, but it does require that you create a gmail account, which is also free). If you do write your expenses in a notebook, I recommend eventually getting them into a spreadsheet and separating them by category. Here are a few category ideas for you:

  • Groceries & household items
  • Clothes
  • Entertainment (restaurants, coffee, movies, bars, clubs, etc.)
  • Books/music
  • Transportation costs (gas, insurance, maintenance, public transportation, cabs, etc.)

Supplementing your income with a part-time job is one way to make ends meet, but so is finding money you already have. Give yourself a raise by discovering where you are throwing money away and redirect it to where it will go further.

In addition to daily spending, make a list of your monthly utility bills, rent or mortgage payments, car and health/dental insurance, etc.

  • Childcare
  • Utilities
  • Cell phone plan
  • Minimum monthly credit card payments
  • Mortgage/rent
  • Health/dental insurance

Add up the total of all columns to give yourself a picture of where your money goes. Add all the columns up and compare the total to your monthly income. Obviously, if your spending more than you make, you are in debt—probably to one or more credit card companies! If you can only afford to make the minimum payment each month on those credit card accounts, then you are losing even more money. That’s not freedom of any sort.

Make_A_Budget
Budget your money and give yourself a raise. Photo credit: TaxCredits.net

Follow the Money

Once you know where your money goes, you can start to devise ways to save more of it. This requires discipline and changing bad spending habits. Decide what is a luxury and what is a necessity for you right now. It’s not about the life you want to live, it’s about the life you can afford. Artists are creative, so here’s another opportunity to use that creativity to put a budget together. If you put yourself on a budget and stick to it long enough it will become second nature to you. To help you further, I will be posting different ways to save money to help keep your expenses in check. 

Be Diligent, Be Disciplined

Surviving as a working artist requires diligence and discipline. So does managing your money. If you are even a marginally successful artist, then you already posses the traits necessary to be a good money manager. 

It takes time and willpower to develop good spending and saving habits. It’s a diet for your finances. Managing money is not just about making investment decisions, it’s about living within your means.

Did it Work for You?

I hope you start tracking your money and creating a budget for yourself. Let me know how it goes.

 

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