Dancers, Are You Making Any of These 8 Common Money Mistakes?
There’s an image that the Institute of Financial Wellness for the Arts likes to use during group presentations: a picture of someone with their head in the sand. The financial services company—launched by TheaterMania and OvationTix co-founder Darren Sussman and his brother Erik, a veteran of the financial services industry—finds that too many artists simply ignore their finances.
The Sussmans started IFWA to try to change that. Today, they offer free online resources and give group workshops catered specifically to artists—including one held tomorrow at The Washington Ballet that’s open to any and all professional dancers.
The Sussmans told Dance Magazine that when they meet with dancers throughout the country, they often encounter the same eight financial mistakes: Are you guilty of any of these?
Troy Powell, Courtesy IFWA
Mistake: Not starting to save early on.
Dancers make a lot of sacrifices at a very young age, sometimes skipping the final years of their education to jump-start their careers. But all too often, they don’t take capitalize on their early entry into the workforce.
“One of great advantages many dancers have is that they’re earning money at a young age,” says Erik. “One of the key components to financial planning is the earlier you start saving, the earlier the magic of compound interest starts.”
Mistake: Not knowing your budget.
Too many of us don’t take the time to write down our expenses, and compare the total number to our actual income. “If you see that you’re $200 short, it’s a fact that you’re going to go into debt,” says Darren. This simple exercise is something you should repeat whenever your financial circumstances change.
Mistake: Not knowing what you want your future to look like.
Many dancers live in the moment—but they also might eventually want things like houses and kids. Erik suggests writing down when you want to buy your first house, when you might want to have kids, when you think you will retire from dance and when you want to retire from working altogether. “If you don’t know where you want to be, how can you plan for that?” he asks.
Mistake: Not saving for that “rainy day.”
Working in the dance field is rarely a stable profession. IFWA suggests all artists have at least three to six months’ worth of personal expenses saved in an emergency account.
Mistake: Spending whatever’s in your checking account.
The biggest challenge for freelancers or artists with seasonal gigs can be figuring out how to pay the same expenses every month when their paycheck constantly seesaws. To prepare for both the highs and the lows, IFWA suggests funneling your income into what it calls a “wealth orchestration account,” which feeds your checking account with the same amount each month. You’re effectively paying yourself a regular salary that you can depend on. “It provides consistency in an inconsistent world,” says Darren.
Mistake: Following your colleagues’ lead.
Even if two choreographers receive the same unrestricted grant, the best possible way to use that money might look completely different for each person. “Financial planning is unique to everyone’s situation,” says Darren. Maybe paying off loans might need to be your priority, or maybe it’s better to invest the money for the future. Don’t base your decisions off of what someone else does with their money.
Mistake: Assuming that art and money are incompatible.
When you’re in the throes of the creative process, spending too much time considering how much something might earn versus how much it will cost could affect your work in ways you might not want. But that doesn’t mean you should never think about finances.
“There’s this false belief that if you’re thinking about money, you won’t be as creative,” says Darren. “We dismantle that by sharing stories of highly creative geniuses who were able to compartmentalize and do both.” While rehearsal may not be the time to itemize your expenses, don’t let your identity as an artist hold you back from planning prudently.
Mistake: Not reaching out for help.
Many artists have never been taught about finances, so they figure it’s just not part of who they are. Or they fear what they might find if they dig too deeply.
“Traditional financial service companies don’t target arts organizations because they don’t understand what we do, and they don’t realize that there are so many people who make their livings as career artists,” says Darren. It’s up to you to get the advice you need. If you don’t know where to begin, check out IFWA’s free one-on-one coaching online.