Finances

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Finances Having a financial plan is an important part of any acting career. Having the right plan in place will help you make sound financial decisions to get you through the lean times and give you hope financially- while not going broke or getting in debt. At The Savvy Actor, we don't believe in the starving artist mentality. We believe that you can have your art and set your standard of living high. There is a system we use to achieve our financial goals and it starts by paying ourselves first.

Before starting this system, you need to figure out your monthly expenses. What do you pay for rent, utilities, groceries, entertainment, transportation, laundry, pet food etc. Figure out what you need to live on without all the extras like Starbucks Latte's, dinners out, drinks with friends, new clothes, etc. How much money do you need to make ends meet a month? Then divide that by 4 (weeks in a typical month). This is what you need to put aside each week to cover your necessities.

Financial tracking is essential in order to achieve your financial goals and pay for your classes, pictures, seminars, coachings and everything else the professional actor needs. In his book, SECRETS OF THE MILLIONAIRE MIND, T. Harv Eker talks about taking the emotion out of money. In order to do this, he suggests creating six separate bank accounts. For each account you attach a percentage of your weekly income. The percentage can be adjusted as needed-- you need to cover your bills. We both use this system and it has helped in saving for the future, focusing our finances and feeling in control of our financial lives. You'll see an example below.

Now to explain each account….

Financial Freedom Account (FFA) - 10%

The financial freedom account is where you pay yourself first. It is your savings account for retirement and something you will continue to grow by letting compound interest work its magic. It is the money that goes towards mutual funds, stocks, bonds and the various other investments that exist.

Necessities Account - 50%

This is the account from which your daily, weekly, and monthly necessities come from. It includes Rent, utilities, cell phone, groceries, etc. The percentage used on this account will need to fulfill your monthly expenses. It receives the largest percentage of your income.

Education Account - 15%

The education account covers anything where you educate yourself. ( ie acting classes, cooking classes, language classes, school, coachings, etc. This tends to be the second biggest percentage, because classes and coachings are important to your career.

Play Account - 10%

This amount should equal the amount that you pay yourself in the financial freedom account. It is the money that you will use to buy a round of drinks for everyone, or a new iPod, or a facial. The thing we love about this account is that it MUST BE SPENT each month.

Long Term Savings for Spending (LTSS) - 10%

This is the Money you'll use to save for the trip to Europe, an engagement ring, a house, a car, etc. Within the Long Term Savings account you can breakdown the percentage of your contribution to cover several different Big Ticket savings projects.

Give Account - 5%

This account is there because giving is an important part of life. It is nice to give back and be thankful. It’s giving twenty dollars to United Way, or the politician or church of your choice or $100 to a friend for their 1 man show. At 5% you can donate to your favorite cause and not feel guilty about giving money away….because you budgeted for it.

Account Breakdown Example

Account	Percentage	$550 wk	X 4 weeks
Financial Freedom Account	10%	$55	$220
Necessities Account	50%	$275	$990
Education Account	15%	$82.50	$330
Play Account	10%	$55	$220
Long Term Savings for Spending	10%	$55	$220
Give Account	5%	$27	$110
		Total Per Month	$2200

From this breakdown you can determine how to pay for things without using your rent money. If a class costs $500, using the example above, you can use the $330 from your education account and take the additional $170 needed from your play account or LTSS account. If you need to for a month or two just contribute to your Financial Freedom account. Again, all these percentages you can change to make your money work for you.

Tax Account

If you file a 1099 form you will also need to set aside 28% for the tax man before you make your percentage breakdowns. We suggest another account for that money so you don't touch it until you have paid your taxes for the last year. That way you can earn interest on your money and not freak out when you owe money at the end of the year.

This plan is there to help you figure out your finances and help you sleep easier. We urge you to read SECRETS OF THE MILLIONAIRE MIND by T. Harv Eker.

Your financial system is one system you definitely need in place for your acting career. Start taking control of your finances now. Email us today to help set up your system and all the other systems you need in place for a successful acting business.