Money Mastery For Artists: Keeping Track of Payments
The meeting point of art and commerce is ever-changing and hard to define. What place does art have in the world of finance? How can young, savvy individuals learn to secure their footing in the world of work through smart investment? What advice do successful entrepreneurs have for the youth of today about finance, culture, and belief in the self? These are all questions ‘Art and the City’ seeks to answer, by interviewing some of the brightest and boldest minds in both the art world and the city.
On this week’s episode of ‘Art and the City’ we introduce you to our new series ‘Money Mastery for Artists’, where we will be taking you on a whistlestop tour of the very basic financial principles to apply to yourself and your money if you are beginning work as a creative.
Here are some of our top tips:
Number 1: It is imperative that when you receive money for a job, you keep track of how much is coming in to your accounts, when, and from where. An easy way to keep track of your money digitally is through a receipts app, many of which such as Smart Receipts are free and easy to use (although most online banking apps keep this information for you nowadays too). Get into the habit of inputting your work-related incomings and out-goings at the end of each month in a specific place, this will help later down the line for tax purposes, and also when you budget/or try to calculate your annual income.
Number 2: Often as an artist you will be asked to complete a self-billing process, or provide an invoice when you get a job. This means alerting your employer to the fact you need paying (including the amount), the service you are providing in exchange for that money, the due date, and which account that money should go into. There are plenty of examples of templates for invoices that you can find online for free, just look up ‘invoice template’ on Google if you are unsure of how to do this.
Number 3: In most arts related professions, individuals will work with agents or managers in order to get work. Agents are also responsible for negotiating fees and deals for you, as well as creating work opportunities. They often take a cut of the money you receive for the job they have helped you get, typically between 10-20%. It is very important that you trust your agent to make financial calls on your behalf, and to represent you professionally. You must always feel comfortable in asking them questions, no matter how small, about work processes and fees.
Number 4: There are many examples of outgoings from your earnings that can be classed as an ‘expense’. For example, the train you take to get to your next gig is a travel expense. It is important you keep track of your expenses (as they relate to your job) and their receipts (either physically or digitally) for tax purposes. It is important to keep track of your work expenditure and your lifestyle expenditure separately, so you can see how much money you are making, and how much you need to live your life. Many artists get paid ‘advances’ for jobs (that is a large sum of money paid for your services upfront). It can be tempting to spend that money straight away, or view it as an upgrade in lifestyle. However, one of the biggest dangers about receiving large sums of money upfront is that it can create a false sense of financial security. You might not receive a large sum of money again for a long time, and it’s important to make it last. This can be achieved by budgeting (working out the amount of money you can afford to spend each month, and holding yourself accountable for those transactions).
Number 5: In many ways as an artist, you are responsible for managing your own business. It is important you take that role seriously as it relates to your finances, and hold yourself accountable for keeping track of money as it goes in and out of your accounts. One of the best places to start learning about what it means to be self-employed is on the HMRC website, where you can learn about important facets of money management such as tax.
Check out our website and other podcasts for more on this topic.
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