It’s feast or famine for a lot of freelance writers, artists, seasonal workers, and those working on commission, but it doesn’t have to be. With a budget and some discipline, even workers with fluctuating incomes can experience some of the stability that their 9-to-5 friends and relatives enjoy. Consider Cary Shafer, a sculptor from Fort Wayne, Ind., who has worked for himself since the mid-1980s. He’s never had a regular 40-hour-a-week job that he hated, he’s worked in Europe, and he even has a second home in Colorado. Shafer has the freedom to pursue the work he loves and the flexibility to do it on his own schedule. It’s the kind of life that artists and writers only dream about, but Shafer is quick to say that he doesn’t go to Starbucks every day. “You can eat ramen for a while if that’s what it takes to do your work,” he says.
Shafer has made choices and sacrifices so that he could make a living off his craft. Having a base in Fort Wayne, for example, is affordable. He bought a studio there and rents out enough space to cover the total cost. He lives in a modest home and does not drive a flashy car. He works hard to avoid taking on debt, and he saves aggressively in case he doesn’t get another project for several months.
In addition to living fairly lean, Shafer does another smart thing. Whenever he gets a big paycheck, he puts that money into savings. Establishing a saving habit is one of the most important things self-employed workers can do. The amount to stash away depends on the person, but a good rainy day fund should cover between 3 to 8 months’ worth of living expenses. Try to save around 30% of your income to cover tax liabilities and to establish this emergency fund.
Taxes can be especially vexing for artists and writers, particularly early in their careers. Many artists fail to save enough to cover income and self-employment taxes. Some don’t know what they can and cannot deduct to minimize their tax liabilities.
Keep careful records of money coming in and money going out so you can capitalize on allowable deductions at tax time. An easy way to do this is to use programs like QuickBooks. Also, keep a separate business checking account and credit card from your personal ones. Not only will separate accounts and cards simplify tax preparation, they will also make it easier to track your earnings and expenses. The people at your credit union can help you establish these separate accounts.
It may be daunting to create a budget for the first time, but it’s essential. Consistency helps self-employed individuals minimize stress and avoid overspending when money is flush. And that will keep them in business not only when income is light but also for the long term. It takes work and discipline, but the longer you do it, the better you’ll get at it.
Sooper Credit Union empowers members to take charge of their lives and to achieve their goals. You'll find both innovative thinking and tried and true strategies in our Empowered Living toolkit.Open an Account
At Sooper Credit Union, we are committed to providing a website that is accessible to the widest possible audience in accordance with ADA guidelines. We are working to increase the accessibility and usability of our website for all users. If you are using a screen reader or other auxiliary aid and you encounter difficulties using the website, please contact us at (303) 427-5005 or (888) SOOPER1 for additional assistance. Products and services available on this website are available at our corporate office located at 5005 West 60th Ave Arvada, CO 80003.
You are now leaving Sooper Credit Union’s website. Although Sooper Credit Union has approved this as a reliable partner site, the linked site is not owned or controlled by the credit union. The credit union is not responsible for the availability, content, or security of the linked site. The credit union is not responsible for any claims related to any goods or services obtained from the linked site, and does not represent you or the third-party in transactions conducted via this linked website. The linked site’s privacy policies may differ from those of the credit union and the credit union is not responsible for compliance with those policies.OK Cancel