Financial planning for artists: tips for how to nurture your creativity while building stability

Let me tell you all about why if you are an artist or a creative, financial planning should be integrated into the way you manage your work. Being an artist is a fulfilling and rewarding career choice, but it often comes with unique financial challenges. For starters, your income likely changes a lot from month to month, depending on what project you are working on. And also, depending on your speciality, it’s hard to know what your next job will be, how much it will pay, and how long it will last. 

As an artist, it’s essential to have a solid financial plan in place to support your creativity and ensure long-term financial stability. In this blog post, I will provide you with valuable tips for effective financial planning specifically tailored to the needs of artists. By implementing these tips, you can gain control over your finances and pursue your artistic passion with confidence.

What we’ll cover:

Disclosure: There are some affiliate links below and I may receive commissions for purchases made through links in this post, but these are all products I highly recommend. I won’t put anything on this page that I haven’t verified and/or personally used.

1. Understand and Track Your Income and Expenses

Financial planning starts with a clear understanding of your income and expenses. Artists often have irregular income streams, making it crucial to create a budget that accounts for both your fixed and variable expenses. Keep a record of all your income sources, track your expenses diligently, and categorize them to identify areas where you can save or cut back.

Tracking and budgeting are key, as they allow you to know what your basic expenses are every month, and therefore you will know how much income you will either need to earn or save up to cover them.

I have two resources for you that you may fund useful:

  • An Excel income and expenditure tracker that will allow you to track your business transactions by month and by category
  • A Money Journal where you can draw up your budget month by month, and write your month-end round up and track your progress.
how to start a finance journal

2. Build an Emergency Fund

Unforeseen events and financial emergencies can happen to anyone. Establishing an emergency fund is a vital aspect of financial planning for artists. As an artist, aim to set aside three (ideally six!) months’ worth of living expenses in a separate savings account. This fund will act as a safety net during difficult times, allowing you to focus on your art without worrying about immediate financial obligations.

If you make it an interest earning savings account, that’s even better! I wholly recommend getting Plum if you want to get into the habit of saving regularly: Plum is a clever app that links to your bank account and automatically saves money for you, and it puts it in either interest-accruing savings accounts, or it invests it based on your investing preferences. I love it and have been using it for 5 years.

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3. Separate Personal and Business Finances

Maintaining a clear separation between your personal and business finances can be extremely helpful for artists. Open a dedicated bank account (or set up a separate pot within your existing bank account) to track your income and expenses related to your artistic endeavours. This separation will not only simplify tax filings and tracking your transactions, but also provide a clear picture of your business’s financial health and help you make informed decisions.

4. Save for Retirement

While retirement may seem distant, it’s crucial to start saving early. As an artist, you may not have access to employer-sponsored retirement plans, but you can explore personal pensions or SIPPs, or other retirement investment options. Start small if you must, but consistently contribute to your retirement savings. The power of compounding will help your savings grow over time, ensuring financial security during your golden years.

Again, Plum can help you set up a SIPP in no time, and will get the ball rolling if you want to open a pension fund, but aren’t quite sure where to start.

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5. Learn to Predict Your Cashflow

Predicting your cashflow as an artist is helpful if you know that your income will vary a lot over the next few months, and you want to make sure you will have enough in your bank account to cover at least your living expenses.

Cashflow projection can sometimes feel like fortune telling, as very often you don’t know when you will be paid your invoice. One can hope that an invoice will be paid within 30 days of its date, but unfortunately, it is never a given.

This is what I recommend doing to ensure you will never go into your overdraft:

  • For the next 6-12 months, plan out what expenses you foresee coming up: rent, bills, renewals, memberships, professional subscriptions, travel expenses, etc.
  • Based on your current projects and past income trends, estimate how much money you will receive over that time, and when. If you sell online, include the average sales figure for every month. If you know you are working on specific projects, estimate when you will raise your invoices for them, and consider 30 days before they are paid to you.
  • Use a cashflow template to track these movements and estimate how cash will behave over the next few months.

If you notice that your cash will dip under a level you are comfortable with, you should then feel empowered to adjust your behaviour to correct the situation. For example, you might delay buying those plane tickets for your holiday by a month, or you can push your online sales by creating a compelling offer so that hopefully you will earn a bit more during those dryer months. Or, you can pick up a couple of shifts at your local cafe to cover the cost of your insurance renewal.

The goal here is to try to peer into the future a little bit, so you can plan accordingly, and feel in control of your financial decisions, rather than feeling consistently anxious about your cash balance.

financial planning for creatives

6. Manage Taxes Effectively

Understanding your tax obligations and managing them efficiently is crucial for artists. Familiarise yourself with what allowable expenses you can claim that are specific to artists, such as deductions for materials, equipment, and studio space. 

If you are unsure about whether you are optimising your tax return, consider finding a tax professional experienced in working with artists to ensure you take advantage of all available tax benefits and deductions. Unbiased is a great place to do this, as you can be paired with an accountant who can guide you through the intricacies of taxation and give you bespoke professional advice that is tailored to your situation.

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7. Diversify Your Income Sources

Artists often rely on multiple income streams to support their careers. Explore various avenues to diversify your income, such as selling your artwork, commissions, teaching, licensing, or freelance opportunities within your artistic field. Diversifying your income sources not only provides stability but also allows you to tap into different artistic opportunities and connections.

You should also look at having a “day job” as something that is part of your plan to achieve artistic freedom, rather than seeing it as competition to your art. Picking up part-time jobs to work around your practice is actually extremely smart, and it has nothing to do with the quality of your art and your status as an artist. Working a shift at your local cafe or covering a temp job are very smart ways to keep that money coming while you are in between projects, and they provide a stable income you count on. I also believe that they actually feed into your art, creating opportunities for you to meet new people and learn skills you wouldn’t have developed otherwise.

Another fantastic way to create an income stream is to develop digital products you can sell online: for example, digital planners, templates, Procreate colour palettes and brushes, and downloadable designs. Once you do the initial work of creating the digital product, you can upload them on your own website or on online marketplaces such as Etsy and sell them indefinitely.

8. Invest in Professional Development

Investing in your professional development as an artist is a smart financial move. Allocate a portion of your income to workshops, courses, conferences, or mentorships that can enhance your artistic skills, expand your network, and help you set out a business plan that can make your practice sustainable. Continual growth and learning can lead to better career opportunities and increased income potential in the long run.

Final Thoughts on Financial Planning for Artists

Financial planning is a crucial aspect of every artist’s journey to ensure financial stability, support creativity, and pursue long-term success. 

As someone who has worked with artists my entire career, I know that it’s harder for creatives to make their artistic work and their business work get along with each other: money is seen as something dirty, and all the administrative work that goes into it makes you audibly groan. But I am encouraging and challenging you to still engage with it, as it’s only harder at the beginning, when you are still getting used to all of this work, and familiarising yourself with the ebbs and flows of income and expenditure. The more you exercise the financial planning muscle, the more you will be great at it, and feel empowered by it.

Financial planning for artists is just another way to show up for your art.

By implementing these tips in this article, you can take control of your finances, manage income irregularities, and plan for the future. Remember, financial planning is an ongoing process, so regularly review and adjust your strategies as your artistic career evolves. With a solid financial foundation, you can focus on your passion and thrive as an artist.

This post was all about actionable tips for financial planning for artists and creatives

About the author : Susie Italiano

financial planning for artists
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