When Freedom Means Control
Americans love debt. Or so it would seem judging from the average credit card debt we carry in the US: $5,700. We weren’t always this way. Somewhere along the line we were lead to believe that we deserve a better lifestyle than we can afford. Is that the American Dream? Not to me it isn’t. To me the American Dream is not about acquiring material things I can’t afford. It’s about freedom. Ironically enough, sometimes freedom is about control—when you are in control of your finances, you are in control of your future. That’s freedom, no? I think so, but instead of taking control of our finances, we buy on credit and hope some day our income will catch up with our lifestyle. What ends up happening is we simply dig the hole deeper. It’s time to quit digging. Living within your means is one way to do this. Don’t spend what you don’t have. If you can’t afford it, you don’t need it. This is crucial to eliminating the ‘starving’ part of the starving artist myth.
Sacrifice is Not a Four-Letter Word
It’s true. It’s a nine-letter word, but you get get my point. If you are an artist you’ve already made sacrifices in your life in order to pursue your creative goals. Living within your means is perhaps the single best way to—not only get out of debt, but to build wealth. This is as true for artists as it is for plumbers or bankers. No matter what your occupation or level of income, if you spend more than you make, you’ll never get ahead. If you carry debt, you’ll never build savings.
As I recommended in an earlier post on making a budget, first you need to figure out where your money is going. Once you have those numbers only then can you start to analyze your spending. To make a change in your life, you’ll need to make a determination about which expenses are luxury items and which are necessities. What can you live with and what can you not live without? You’ll also need to make decisions on how to correct your bad spending habits.
Don’t Cut Up Your Credit Cars
You don’t have to cancel your credit cards if you have the will power to use them responsibly. Credit cards are fine to use if you are able to pay off the balance each month. You can even use them to your advantage by earning airline miles or points with an Amazon.com Rewards Visa Card. Before you can live within your means, however, you’ll need to pay down the balance every billing cycle. If you need a reminder on how to get your debt down, read this.
Three Tips for Living Within Your Means
Here’s how to live within your means: Do these things and you will grow both wealth and peace of mind.
1. Be Wise
Know the difference between a luxury and a necessity. (I assume you’ve already tracked your expenses as I recommended previously.) It’s OK to treat yourself now and then. In fact, it will help you stay on your budget if you factor in a night out once a week or once a month (depending on what you can afford). Have the wisdom and self control to cut back when necessary.
Set aside money for unforeseen expenses! Photo credit: TaxCredits.net
2. Be Prepared
Save money for emergencies. Having that extra cash on hand will prevent you from having to turn to credit to get through a tough time. If you earn your living freelance writing or doing graphic arts or illustrations, three months of living expenses is recommended to have set aside for when times get tight. I know that sounds like a hard thing to do and it is, but it will keep you from relying on a credit card between assignments.
3. Be Creative
Don’t get suckered into buying things you don’t need just so you can project an image of success or keep up appearances. Buy used whenever possible. Buy used furniture and clothes. Buy refurbished electronics and find new ways to repurpose older items. Get creative. Here’s where artists have the advantage, we can use our imaginations to create new solutions to problem, purposes for seemingly unuseful items and fun that won’t break the bank.
Do these three things and you will be well on the way to becoming a more financially secure, and not a starving, artist. I should mention, all these things require discipline too, but artists must be disciplined. I’m assuming you can apply that discipline to anything you set your mind to.
Good luck and please let me know how it goes.