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Financial planning for artists: An overview and guide

Portrait of Symposia author Colin Fisher
Colin Fisher

Mar 10, 2022

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 min read

A artist working as a financial planner for her art career
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If you're an artist, financial planning may not be the first thing on your mind. But it should be. As a working artist, it's essential to have a solid financial plan to focus on what you do best - creating art. This blog post will give you some tips on an artist's guide to financial planning. Stay tuned - the best is yet to come.

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Exponential thinking, budgeting, and saving.

We are built for survival, not prosperity. Our minds haven't adapted nearly enough to handle the volume and variety of money problems that arise in our lives - from constantly being on the go or having lunch plans every few hours (we think linearly), all way up through how much debt someone can get into without noticing until it's too late; if they do see at least then, there is hope with bankruptcy laws nowadays but no such thing as.

Folded in half, then folded again, and the height grew exponentially.

This thought experiment demonstrates how much something can change when it undergoes repeated reduction or expansion—in this case, 42 times consecutive folding sessions produce a body tall enough to see from one side of a city block all way through its other dimensions.

It turns out that the moon is just a little bit smaller than we thought. The Earth's surface to moon distance calculates at about 239,100 miles, but when you add in all those folds, it equals 250 million. That's why they say, "enclose yourself within these four walls of the earth."

What sounds like a small amount can turn into an enormous debt over time. For example, if your credit card interest rate is -20% and inflation gets 3%, everything will be priced at 20% more than before.

The power of compound growth in finance is genuinely incredible when you think about how quickly even small numbers grow (unless we're talking about 8%). One way around this problem? Investing into something secure like treasury bonds which compound annually too.

You may be thinking that the power of compounding is a little too far ahead, but it's essential to take advantage. If you don't compound your earnings and investments to grow at an accelerated rate, they could break or sink over time.

The power of a 50/30/20 budget

Financial planning is not simply a matter of managing how you spend money. It's also about the emotional and mental comfort that comes with having enough funds for those long-term goals you've been working on since high school graduation day.

The key to success? A monthly budget helps ensure every penny spent goes toward something valuable—like living happily ever after.

Financial planning is more than just managing your money. It's also about the emotional and mental comfort that comes with having enough funds for those long-term goals you've been working on since high school graduation day. The key to success? A monthly budget helps ensure every penny spent goes towards something valuable—like living happily ever after (or at least until next year).

A 50/30/20 budget is based on three specific categories:

Obligations: Your obligations are the amount you have to spend (50% of your income).

Discretionary: anything you pay for with your money, like buying food or entertainment, 30% of our income goes towards discretionary items.

Savings: The key to financial security is saving 20% of your monthly income.

To create a monthly budget, start by adding up all the costs for your recurring obligations. This includes anything that comes out of pocket each month, such as rent or utility bills, plus any other singular expense you have like metro transportation fees in addition to health insurance coverage - it's essential not to go over 50% on this list. While it sucks to know that you might be putting all of your money into obligations, this will relieve some guilt when checking the bank account. But if over 50% & cents, then start looking for ways to increase income and decrease expenses because it's time.

Here are the steps to take for becoming financially secure: -Save 20% of your monthly income. This should be going towards savings, I e building up an emergency fund, and ensuring you have some money if something happens that requires it down the road. No matter how small or large this sum may seem now, having at least one container full with cash can give flexibility when needed most.

Payer off high-interest debt to save yourself from financial destruction. With interest rates over 5%, any credit will cost you more money than necessary in the long run if it isn't paid quickly and efficiently.

Let's do an example of a 50/30/20 budget

Jeanette works two jobs and makes about $3,000 a month. Her rent is 1,100 dollars; the rest goes towards living expenses like utilities or cell phone bills, which average at 150 each per month.

So Jeanette’s budget is as follows:

  • Obligations = $1,500 ($1,100+$150+$210+$40=$1,500)
  • Savings = $600 (20% of $3,000)
  • Discretionary: $900 (30% of $3,000)

Jeanette knows that the first thing to do is move $600 into her savings account when she gets paid. If there is any credit card debt on top of this already, then maybe an extra 150 can go towards getting rid of them faster - or at least setting money aside for emergencies so it'll be available in case something happens soon enough.

The most important part here isn't just saving 20% from what you make each month; if possible, try adding more than that percentage because life events happen without warning (like being unexpectedly graduated).

To make it easier on yourself, set up automatic transfers (any online banking service should allow you to do this). Your bank automatically transfers money into a savings account and another dedicated for discretionary spending every month. Once that's done, the main thing left is making sure not too much goes towards debt repayment or emergency fund withdrawals when there isn't enough in either one.

Calculating income tax to focus on saving money

Investing: it isn't that hard.

To get the best of both worlds, it is essential to invest your money for its value to grow and continue growing over time. There are many different types of investment options out there, such as stocks and bonds, which can provide you with an excellent return on investments if handled correctly.

I like to encourage people, especially those with limited income or resources in their country of residence - even if they are only earning enough money each month for basic needs. One way to help financially secure your future is by investing at least 10-20% of what you have available. There are many different types of investment vehicles out there on the market today; however, I typically advise individuals who don't know much about investments yet but want something safe and reliable go ahead plain old "target-date funds" offered through companies such as Vanguard, which will ask all necessary questions during setup process plus provide appropriate solution depending upon answers given by investor(s).

There are lots of exciting startups in this space, too. Fidelity and other popular providers offer quality investment products. The term "Robo advisor" is getting more common--these websites provide friendly interfaces for you to manage your investments easily online or through apps on our phone screens.

When it comes to choosing a Robo-advisor, you should consider the fees. Some are higher than others, and there's no one-size-fits-all when investing your money. That being said, if an app or service works for YOU, then go ahead with them because of compounding effects which can add up over time even though they seem small at first glance.

Investing in the market is a great way to get high returns on your money, with stocks for potential growth and bonds being reliable.


Stocks are a big part of any company. If you buy their stock, it's because of the hope that the firm will become more valuable, and your share price should go up as well. Stocks can increase in value - sometimes even by hundreds or thousands over time.

The worth of a stock can go up or down dramatically. It also matters whether you buy individual ones, as these risks are more significant than investing in mutual funds where their combined value is primarily insured against failure by the authorities who regulate them—and even then, there's no guarantee that your investment will be profitable.


There are two types of bonds, Government-issued debt and corporate. The difference between them is that with a government bond, you're lending your country money in exchange for interest payments from those who have purchased it; on the other hand, when companies issue their forms, there can be preferred shares that give investors more returns but reduce liquidity due to not being freely tradeable like equities do (the price changes every second).

A standard loan we all know very well has evolved into something new: The Bond, created so traders could capitalize better during economic downturns by taking advantage of both risk-sharing opportunities offered through fixed income products such as mortgages/loans, etc.

Index funds

Index funds collect a collection of stocks and bonds that provide what we call diversification. The idea is to protect you from anyone company going out due as the odds are good most won't - even though it might happen.

Target-date funds

A target-date fund is a mutual fund that automatically rebalances itself as the investor gets closer to the target date. The goal is to have the portfolio become more conservative as time goes on.

When you are young, your investing strategy needs to change depending on what year in the future that will be. For example, a 25-year old has 40 more years until they retire, whereas a 55-year-old only gets ten, so there's plenty of time for them to grow their wealth through stocks and bonds if necessary.

Target-date funds are a great way to invest in bonds when you're near or entering retirement. With these investments, the interest rates will always be higher than other investment options because they target your age and need for security, which means that no matter how old we get, our portfolio won't fall apart due to low yields on government securities.

Retirement account types

There are many different types of retirement fund investment accounts to choose from, depending on your financial needs. Some that may be worth looking into include The 401k plan (employer-sponsored), Individual Retirement Arrangement(IRA), and SEP-IRAs, which allow you some control over how much tax is deferred when investing money in them or avoiding taxes entirely thanks to their styles as well.

Taxable income for an art business

Pre-tax employer programs for retirement savings (401Ks, etc.)

You may have a choice of different account types depending on the employer. At private companies, 401(k) plans are available, which allow for contributions and retirement benefits matching your contribution amount up until a certain percentage point- whichever one best suits you. If working in local government or with military personnel, there's 457b/TSP, etc., so do some research before signing anything.

These accounts allow you to make "pre-tax" contributions, which means when the money is put in today, it won't be taxed as an income taxes source. But once retirement rolls around, and we start taking out payments from these funds - sorry, but there will always come taxes associated with what's been invested plus any growth rate achieved during investment time.

Your employer may offer you a match, but that means you have free money. You should at least put in the amount they provide to get this deal. If not for yourself, it can grow with investments over time and help fund retirement when Advisors recommend 10-20% monthly income as needed (depending on age).

We all know that taking money out of a 401(k) before retirement can have significant tax implications, but what you might not have considered is how this affects your ability to build personal wealth over time.

The sad reality is that unless it's an emergency and necessary for survival, waiting until later in life will mean much more opportunities and cost less interest than early withdrawal rates would otherwise dictate.

The last note: in 2018, the legal max you can personally contribute to a retirement account is $18,500 per year. Your employer may also offer more than this amount, so matching programs are often helpful.


You can contribute to an IRAs or investment retirement account. This has rules like a 401(k): you get to deduct the contribution today and not pay income tax on that money for this year- unlike traditional 401ks, which have postdoc restrictions regarding when they will accept new employees (after age 50).

You also have more than $5500 per year eligibility in terms of contributions; if over fifty signup amounts are applied at once, then it's adequate even though IRS guidelines say differently.

Roth IRAs

With a Roth IRA, you can avoid paying taxes when your income is low. And since we don't know what tax rates will be in the future - there's an advantage to doing both pre-tax 401(k)s and post-tax run the following years so that if anything changes (for example, higher taxes), they still have options for retirement savings accounts.


The expense ratio is the fee that investment firms charge for managing your money. You'll never see a bill because they take it right out of their accounts.

This could be 1% or more, which may not sound like much until you consider how quickly these small changes add up over time—and if an account has too high a rarity ratio (meaning there are many more significant transactions compared to smaller ones), then even 0-5% can seem expensive when just looking at one year's worth of data.

Always make sure someone shows total fees before trusting them with any portfolio management responsibilities.


When it comes to investing, you should think long-term and be diversified. This way, your investment will grow over time with the power of compounding effect in play.

If speculation is what gets you excited, then go ahead but don't do anything that could jeopardize saving money for future goals like retirement or education expenses by taking risks on individual stocks/cryptocurrencies, which are not part of a well-diversified portfolio-based around personal finances.

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If you have a dedicated space in your home that you use to make your artwork, you can deduct that space from your taxes along with most art supplies.

Moving from a part-time hobby to full-time artist

Since you'll need to treat your art career as an art business, before making this major life decision and committing fully to being self-employed, it is essential.

You should start selling pieces now, so when the time comes where everything's set in stone with regards to whether or not becoming an artist was really for YOU--you already have some experience under your belt.

You may be thinking of all the benefits and drawbacks of being self-employed. Well, before you make your final decision on whether or not this is really what you want to do, you should start selling pieces now so when everything's set in stone for good (and bad), there is already some experience under your belt.

It may seem impossible at first but don't worry; there's always room to grow and improve your skills in both industries. We all know that running a small business is hard. And, of course, being an artist can be just as challenging--if not more so.

So take this number with you on your journey: it will help motivate and inspire when things get low-key frustrating or overwhelming because remember what matters most? Over time, the power compounding returns make working towards achieving goals worth investing energy into payoff huge if done correctly.

Talking about health insurance and disability insurance

Some tips on business management

We all know that running a business can be difficult. The key to success is knowing what you are doing and following some simple guidelines, as these good practices for successful entrepreneurs:


It's essential to get a "DBA" (doing business as) so that you can operate your new company under the name of whatever it is they're selling. It's easy and cheap; do an online search for DBD registration in any city near where people might want what YOU have.


You can also get an EIN (employer-identification number), like social security, but for businesses. There's no cost, and it takes less than five minutes. It will come up at some point in the future, so why not prepare now?

Business accounts & LLCs

When you have your EIN, DBA, and business checking account set up, it's time to start keeping track of how much money goes where. Keep some in for fun or use this as a way to make a profit when applicable- anything from selling goods on-site.

Fret not, entrepreneurs. There are many different legal entities one can choose from when starting a small business. For example, sole proprietorships give full ownership and responsibility to the owner; partnerships share liability with other partners but have more protection than LLPs (limited-liability corporations) because both parties must agree on any decisions made by them—a lawyer would probably be best suited for this type of establishment.

Business expenses for art sales


The accounting section is a no-brainer. If you're self-employed, then get QuickBooks Self Employed and track your mileage for those sweet tax deductions.

The bookkeeper Key Figures Co-Op is an excellent, affordable and cooperative organization that can help you with your financials. If working on the back end of things makes sense for where you are in life right now, then I recommend trying them out.

Income tax

The IRS wants to make sure you pay your quarterly taxes, so they can use that money for other things like filling in the gaps when people don't file. If we all do this one thing together, it will help keep costs down and ensure there isn't any financial stress during these times.


Self-employed people might not know that they can take advantage of the tax code to save money. The good news for entrepreneurs, then? Yes. As an individual who owns their own business (or works part-time), you get access and benefits beyond what typical workers receive from employers--including deductions for driving cars or meeting with coworkers outside work hours at coffee shops/ restaurants; etcetera.

Hiring a CPA to help you file your taxes could save more than they cost. It may be expensive at first, though—you'll need about $300-$500 to hire one (depending on where there live). A certified public accountant has the necessary knowledge and experience for this job, so I recommend working with them.

Concluding thoughts

If you want to be successful with money, it's essential to get organized and do a little arithmetic. Keep your expenses near 50% of your income, save 10-20% of every paycheck, and figure out what your discretionary budget should be.

If you're ever feeling lost, don't be afraid to ask for help from a financial advisor or accountant. They can offer invaluable insight and save you money in the long run. By following these simple guidelines, entrepreneurs can make sure they are on the right track for financial success.

  1. Get an EIN to claim your income
  2. Keep track of your business expenses
  3. Don't forget to keep some money set aside for fun
  4. Consider legal entities for your small business
  5. Consider hiring a CPA to take advantage of tax deductions available to you
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