Seasoned tips on Handling Finance As A Creative

The contents of this article are better accompanied by the consultation of a professional. This article can not totally replace expert financial advice. However, the recommendations are tested and trusted. 

Read More 21st Century Creative Entrepreneurs Avoid These Two Unfavorable Business Practices

You are creative if you are allergic to norms. Once or umpteenth times, you have been called a rebel because you (probably) disagree on operating in a traditional white collar “secured employment” setting. You are a writer, architect, artist, entertainer, fashion designer, web developer… 

As long as you are always thinking fresh thoughts and taking responsibility for yourself; living life on your own terms and conditions- you are a creative person. It is difficult to talk about money with a creative person. Since they do not bound to any specific doctrine. 

For example, not all creatives conform to exploring or exploiting their talents as a source of livelihood. An artist might be focused on documenting narratives about happenings in the world without concentrating on the revenue generation his/her talent offers. But there is another creative who is constantly exploring how he/she can exploit the money-making opportunities his/her skills offers.

Irrespective, the artist solely focused on documenting narratives still needs to understand the principles of handling (personal) finance like/more than the other creative concentrated on making more money from their natural talent. Since we all have personal finance and objectives. Besides, creative projects require, money to be executed successfully.

Read More Professional Creatives do these FOUR things to keep up their creative energy while working

Therefore, whether you are in the creative universe for impact without exploiting the financial opportunities or primarily focused on making money; how to handle finance is still a paramount discussion all creatives should be interested in having. 

Diving in, the following are ways you can handle finance as a creative: 

Create a powerful vision and mission for your creative brand: 

First of all, your vision and mission as a creative direct you on the right path of how to manage your finance.

Knowing what you have to achieve now (mission) and what you hope to achieve in the future (vision) helps you to save without being told and invest without being forced to do so. 

Therefore, the first step to control how you spend the money you make is to have a compelling vision and mission for yourself as a creative. 

Have at least weekly and monthly goals and objectives for fulfilling your vision and mission: 

To fulfill your mission and vision, you have to start by taking action daily. 

Your daily objective might be to save a penny while one of your weekly goals might be to invest in yourself from whatever gains you make. Monthly goals might be to invest part of your profits. 

You need to create goals and objectives that can help your creative brand expand. Then you stick to achieving them. And no favorable goals and objectives would include spending your income on vacations you can’t afford. 

In the case that you need to relax from creating art or designing, having a keen understanding of your vision, mission, goals, and objectives help to fine-tune a way to chill without spending too much. 

Read More A NEW VISION FOR ART&COLLECTION

Hiring a lawyer: 

Lawyers help you anticipate potential legal problems and tax issues as you expand as a creative. For example, it could be informing you about the loopholes in a new contract or updated shipping laws of states you often send your products to for delivery. 

Lawyers provide guides in investing, forecasting, lending, and borrowing. A lawyer is never too expensive.

It’s hard to manage finance to achieve your aims, goals, and objectives when you have debts to pay and a lot more that people owe you. Your lawyer can be helpful in drawing up documents for collecting debts which can be used in settling what you owe. An experienced lawyer could also protect you from lending money to someone who probably is not going to pay it back. 

Creatives fall into potholes of financial hardships because they are very easily carried away with the terms: investment. Especially when you are a remote creative living in your parents’ house; you tend to have so much money to invest. However, it is important to have pros look into the investment you plan to make and scrutinize or guide you through the contracts so you don’t lose your hard-earned money. Hence, the need for a lawyer. 

Lawyers are also useful in checking your compliance with laws; which is something most creatives don’t take note of. Your lawyer can be useful in negotiating loans when you intend to borrow. Also, they can guide you on tax and its planning.

It is more expensive to get a lawyer during an emergency. Such as when a client sues you for the service rendered or product delivered. 

Moreover, it is even more difficult to get one that is seasoned if there is a deadline attached to getting a lawyer. So, having a lawyer as a part of your creative team is highly advisable. 

Hire an accountant or bookkeeper:

Understandably, most creatives just want to create. So, it is somewhat normal for creatives (initially) to perceive recording and deciphering financial documents as a waste of time. They are less worried about managing money which usually comes to hunt them eventually. 

The influence of an accountant on a creative person’s success is limitless. But simply, an accountant’s work would be to keep a professional eye on your incomes and major expenditures while you do what you love doing best as a creative. 

For creatives, you can only know how you’ve done financially in a year until December when you check and balance your account books. However, this is not a good financial practice. The best financial practice is monitoring your finances at least monthly. Of course, you might not have that time when you have deadlines to meet. Hence, the need for an accountant. 

Therefore, the work of your accountant would be to offer professional financial advice, account for every dime you spend, and give you regular financial reports, and auditing. 

Proper financial reports help you measure your profit and adjust your prices appropriately. Financial reports bring your attention to expenses costing much more than you need. 

Your accountant ensures you get adequate financial presentations that would guide you on reducing expenses, expanding revenue, and making the best use of your profit. 

Being your own accountant is also recommended in handling your finance but how consistent and effective would that be? Because creating something unique consumes a lot of time and energy in itself. 

Although, your accountant is a professional responsible for helping you manage your finance and save enough for tomorrow. Still, ensure that you are constantly monitoring your accountant whether they are a family member, relative, friend, or employed professional. Accountants are meant to be honest but not all are. 

Additionally, it is required sometimes to have a second or even a third eye look at a financial document to discover a minute error that can cost your brand so much money which the accountant might have intentionally left out or hidden. You might be that eye that identifies areas overlooked by your (negligent) accountant which would have cost you almost everything. 

Therefore, employing an accountant is not enough. You also have to make time out to thoroughly go through the financial reports they submit. 

Manage your finance yourself: 

Depending on the scale of your brand as a creative, you might not be able to afford the fee of an accountant. Neither would there be any need to expose what you make to a family, friend, or relative if you can manage your finances and account books yourself. 

There is accounting software available online that would be useful when it comes to managing your account yourself. Excel sheets can also be used to categorize and record your income and expenses. 

Nonetheless, there are three things you can do to make managing your account yourself less complicated. 

1. calculate your net-worth
2. have a budget
3. define your lifestyle

1. Calculate your net-worth: 

One major reason everyone falls into financial complications is spending beyond their income. Or securing loans beyond their assets and gains. 

Therefore, the first way to avoid such is knowing what you own(assets) from what you don’t own(liabilities). 

Obviously, when your assets are more than your liabilities, you could say that you handle finance well. But when your expenses are more than your generated revenue, then you know the origin of your money issues. 

It is advisable to calculate your net worth at the end of every year so you know how much you have to spend in the coming year on expenses, personal, or business projects. 

It can never be too late to calculate your networth. 

Then, the net-worth guides you to create a budget. Your budget is then used to define your lifestyle. 

2. have a budget:

It is a common saying that budgets are for stingy people. Well, for creatives whose ideas are huge and goals are numerous, having a budget is strongly advised. 

Budgets help you to set priorities that define your lifestyle. 

Budgets help you take time to ruminate over what you need and what you don’t. In the process, you are realizing a lot of unnecessary spending habits that have to stop. 

Your budget should not be prepared based on your income expectations for the week, month, or year. As that might change based on unpredicted circumstances like covid-19. It is a wrong financial practice to budget on the money you don’t already have.  

Draw up your budget based on the money you have at hand. That way you know how to order your numerous needs and the kinds of wants that really deserve to make the list. 

3. Define your lifestyle: 

Knowing your net worth and making genuine efforts to draw a budget helps you define your lifestyle. 

Read

From your net worth and preparing budgets, you already know what kind of lifestyle you will have to sustain and maintain in the time being. Until your income and profits Increase to accommodate more elaborate and flashy lifestyles. For example, you might have to reduce or stop eat-outs at your favorite restaurants and do more of the sit-in meals. You might have to stop taking Uber to trekkable distances or consider boarding public transports for very far distances. 

Understanding how to manage financial affairs (personal or business) matters because money matters in everything. 

Money is essential to every creative with the determination to leave an evergreen legacy behind. 

Who can leave a long-lasting impact without money to cover the resources needed?. 

And while many think originating from a wealthy family is enough, if you don’t know how to handle the (abundant) wealth you have been born into- you also can’t achieve much. 

So it is less about how much you have or what you intend to do with your creative superpower. But more about how you can manage the less you have in doing more for yourself, your brand, and the people around you. 

Read More Arteasy Nigeria’s C.E.O Open Letter