Its tough working in the freelance art biz if only for the fact that most of us don't have steady income. And those of us who do don't usually make a ton of cash in the winter. Plus most of us work on a cash-only basis, so there's a real temptation to spend spend spend all summer while the dough is rolling in, but then come November most of us are screwed. Some of us even have to GET A REAL JOB (audible gasp).
Here's a system I learned from a credit counselor on how to avoid those end-of-October blues. Even though it's November, start NOW. If you've saved up for the winter, this is a great way to see if you've saved enough, and will motivate you to market yourself more over the Winter (You DO market yourself, right?)
INTRODUCING: THE ENVELOPE SYSTEM
It's really pretty simple. If all you use is cash (and if you don't you might consider cuttting up that plasic ASAP!) then you basically need to make a budget, put money in the envelopes, and (this is key) NOT TOUCH IT unless you need it. Here's how:
You'll need:
A notebook and pen
A calculator
All your bills
A calendar
A box of envelopes
STEPS:
1. Make three columns in your notebook. The first column should be the biggest.
In The first column, list every single bill that you have. You'll also need to list every expense that you have, both business and personal. For a quick and easy template that you can print out for FREE, check out this site: http://frugalliving.about.com/library/pdfs/BudgetWorksheet.pdf
They are missing a few categories, such as birthdays and holidays (like Christmas).
Also they don't have any categories for a sole proprietorship. If you're not a sole proprietor, consider making an entire budget just for your business based on the same model. If you are a sole proprietor, add categories such as Marketing (business cards, flyers, postcards, adsense), Materials (easel, markers, colors, paper, etc.), and travel (gas, food, lodging).
2. In the next column, list each monthly payment. If you have a bill that is due, say, every six weeks, figure out exactly how much you'll have to pay per month. (For you artsy people who can't do math, you do this by dividing your biull by the number of weeks (6 in this case) and then multiplying that number by four since there are four weeks in a month). For now, just use the lowest monthly payment on each bill. Leave the last column blank for now as well.
3. For expenses such as gifts, look at a yearly calendar. On a new sheet of paper, write down each and every person you will get a gift for for their birthday, anniversary or holiday (like Valentines Day). Estimate how much you want to spend on each person and write it next to the person. Add these all together, then divide by 12 to help you figure out how much you need to save each month on gifts. Add this to your main budget page. You can do the exact same thing with your business expenses. Estimate how much art materials you go through in a typical week, and figure out the cost. Same for Marketing.
4. Now divide each figure by FOUR to get your WEEKLY BUDGET (I find this easier than monthly for what we do, but you can also do it on a monthly basis.) Place this figure in the last column for each budget item.
5. Take out your envelopes and label one for each and every expense. Write down the name of the bill, and the monthly and weekly payment on each envelope.
5. Place the envelopes in order of importance (rent and car payments go on top, for example).
6. Place money in the most important envelopes as you earn cash. Fill up the lesser envelopes afterwards. This is much easier in the spring summer and fall than in the winter, which is why it's IMPERATIVE that you don't touch the envelopes!
7. If you're rolling in the dough in July, for instance, consider filling up envelopes for November, December, January and February AHEAD of time. THIS is what will get you through the winter.
8. If your expenses exceed your income... you're screwed.
Well, OK, not really. But you may want to a) cut back and/or b) get a part time job c) market yourself better. Check out one of my posts on how to market yourself at http://caricaturebizguru.blogspot.com/2011/10/10-unique-ways-to-give-out-business.html
Now if I could just get my husband to stop opening the envelopes...
Here's a system I learned from a credit counselor on how to avoid those end-of-October blues. Even though it's November, start NOW. If you've saved up for the winter, this is a great way to see if you've saved enough, and will motivate you to market yourself more over the Winter (You DO market yourself, right?)
INTRODUCING: THE ENVELOPE SYSTEM
It's really pretty simple. If all you use is cash (and if you don't you might consider cuttting up that plasic ASAP!) then you basically need to make a budget, put money in the envelopes, and (this is key) NOT TOUCH IT unless you need it. Here's how:
You'll need:
A notebook and pen
A calculator
All your bills
A calendar
A box of envelopes
STEPS:
1. Make three columns in your notebook. The first column should be the biggest.
In The first column, list every single bill that you have. You'll also need to list every expense that you have, both business and personal. For a quick and easy template that you can print out for FREE, check out this site: http://frugalliving.about.com/library/pdfs/BudgetWorksheet.pdf
They are missing a few categories, such as birthdays and holidays (like Christmas).
Also they don't have any categories for a sole proprietorship. If you're not a sole proprietor, consider making an entire budget just for your business based on the same model. If you are a sole proprietor, add categories such as Marketing (business cards, flyers, postcards, adsense), Materials (easel, markers, colors, paper, etc.), and travel (gas, food, lodging).
2. In the next column, list each monthly payment. If you have a bill that is due, say, every six weeks, figure out exactly how much you'll have to pay per month. (For you artsy people who can't do math, you do this by dividing your biull by the number of weeks (6 in this case) and then multiplying that number by four since there are four weeks in a month). For now, just use the lowest monthly payment on each bill. Leave the last column blank for now as well.
3. For expenses such as gifts, look at a yearly calendar. On a new sheet of paper, write down each and every person you will get a gift for for their birthday, anniversary or holiday (like Valentines Day). Estimate how much you want to spend on each person and write it next to the person. Add these all together, then divide by 12 to help you figure out how much you need to save each month on gifts. Add this to your main budget page. You can do the exact same thing with your business expenses. Estimate how much art materials you go through in a typical week, and figure out the cost. Same for Marketing.
4. Now divide each figure by FOUR to get your WEEKLY BUDGET (I find this easier than monthly for what we do, but you can also do it on a monthly basis.) Place this figure in the last column for each budget item.
5. Take out your envelopes and label one for each and every expense. Write down the name of the bill, and the monthly and weekly payment on each envelope.
5. Place the envelopes in order of importance (rent and car payments go on top, for example).
6. Place money in the most important envelopes as you earn cash. Fill up the lesser envelopes afterwards. This is much easier in the spring summer and fall than in the winter, which is why it's IMPERATIVE that you don't touch the envelopes!
7. If you're rolling in the dough in July, for instance, consider filling up envelopes for November, December, January and February AHEAD of time. THIS is what will get you through the winter.
8. If your expenses exceed your income... you're screwed.
Well, OK, not really. But you may want to a) cut back and/or b) get a part time job c) market yourself better. Check out one of my posts on how to market yourself at http://caricaturebizguru.blogspot.com/2011/10/10-unique-ways-to-give-out-business.html
Now if I could just get my husband to stop opening the envelopes...
