artist debt
Financing

A Guide to Eliminating Artist Debt and Sticking to a Budget

As a working artist or creative professional, you know you’re living exactly the life that was always meant for you. It’s one thing to feel the incredible outpouring of energy and creative impetus in the studio, but does that same positive energy translate to other areas of your life? What about when you’re sitting in front of a spreadsheet and balancing your monthly artist budget? In addition to staying on top of your income and bills and being prepared for new expenses, how do you feel about paying off lingering artist debt from student loans and credit cards?

Financial literacy is a tricky topic for any working artist or creative professional as, unlike professionals working a 9-5 gig, independent workers each have unique income streams and financial situations. So how can each working artist know what is the best route for them to develop a robust savings account and knock down years of student loan debt and credit card bills? Personal finance expert and artist Christina Empedocles notes in conversation with Alexis Fedor in “Artists in Business” that “so much is unspoken about how an art practice works.” This rings true across genres – artists, freelance creatives, writers – and indicates a need to outline significant ways that we can be more transparent as creatives share advice with one another frankly on what has and hasn’t worked in our practices financially.

Here we learn from financial experts who have experience working with creative professionals to learn their tricks of the trade in getting by and – even more importantly – living richly and free from artist debt!

Eliminate High-Interest Artist Debt

You have regular income and are just beginning to grow out your practice, so you know that the time is ripe to begin annihilating some lingering artist debt you have weighing you down. But where do you start? Whether you have a short list or long laundry list, the key factor in knowing where to start lies with your ability to pay off artist debt that will eventually save you money. How can you take the best approach to ensure that you move money in a meaningful way? Empedocles has the answer when she tackles how artists can live financially responsible lives.

artist budget
Eliminating student loan or high-interest debt should be top priority for working artists.

“Get out of high-interest artist debt first,” she notes. “This means credit cards.” She continues, “For some people, student loans could be so high [that they become] a priority, but for most [artists] it’s important to get rid of high-interest debt, which doesn’t allow you much room to tackle other things.” This key impact of eliminating high-interest artist debt – the ability to take the money you save through this maneuver and use this for other necessary payments (utilities, insurance, storage, etc) will eventually make a big impact on your ability to live a life free from worry about money. General advice on how to consolidate credit card debt constructively is tackled in this helpful article at the balance, which observes that even if complete credit consolidation is impossible that, “ moving just some of it will lighten the load.”

It’s important for the working artist not to be caught in a cycle that will repeatedly impede your progress and further deplete your resources for a long period of time into the future. Once you get rid of high-interest artist debt, don’t fall back into it. It’s better to pay off what you can on high-interest debt while balancing the rest of your artist budget reasonably so that you are not trapped back into the same cycle.

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Consistently Monitor Spending

Financial expert Miata Edoga points out the importance of respecting how your income can help resolve lingering artist debt. “For an artist who is just beginning to consistently make sales, [it’s crucial] to make sure you do NOT increase your expenses/lifestyle just because more money is coming in,” Edoga says.“Instead, this is the time to focus on building a robust planned/emergency savings, paying down debt and starting to contribute regularly to your future wealth.” By focusing on what’s important and curbing spending, you’ll be more aware of how your spending habits affect your income and better understand your spending “pain points.”

LIke brushing your teeth, it’s key for a working artist to make weekly budgeting a part of your regular habits. Take an hour or two to review a list of your expenses, tracking them as they arise, to move forward with classifying them in the best possible way to claim expenses for your creative business. The most important factor in making an artist budget, Empedocles notes, is awareness.

artist debt
Just because you’re earning more doesn’t mean you should be spending more.

“Become hyper-aware of where your money’s going,” she notes. This is the most painstaking yet rewarding factor in money management. By gauging how much you regularly spend in every category, you’ll have a stronger awareness of your spending habits and a better grasp on how much you can really afford to spend. Edoga remarks that “Financial planning is all about the creation and maintaining of systems… systems that allow you to track your expenses and earnings on a daily, weekly and monthly basis.”

“Instead of viewing the time spent working on your finances as time that is taking you away from the work you really want to be doing – consider that by committing to a strong financial relationship, you ARE building the foundation that supports your art,” she adds. By focusing on what’s important and curbing spending, you’ll be more aware of how your spending habits affect your income and overall artist budget, and better understand your spending weak points. This process also becomes a deterrent for further spending, as a greater awareness affords you the ability to remain cautious in your spending habits as you confront the items on your artist budget you don’t truly need.

Allocate Your Income Effectively

Financial planner and author Mark DiGiovanni notes that the working artist naturally creative. They can find ways to be creative with their finances, too.” A crucial aspect of monitoring your finances is to make sure that what you’re spending on is improving your chances to earn more in the future.

DiGiovanni, who consistently works with artists on financial literacy, notes the importance of knowing where your money should go. “The big problem for artists is the inconsistency of income,” DiGiovanni acknowledges. “It may help to devise a percentage allocation system. For example, 70% might go to living expenses, 15% to tools of your craft, and 15% for training to get better at your craft. Using a percentage system instead of dollar amounts enables the working artist to keep improving their skills, which is necessary to generate long-term consistent income.”

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When considering the 15% allocation toward “training”, this could be an opportunity to approach student loan or other artist debt. If you’re still stressing out about student loan debts, take this as a sign that you can take a few months to focus on paying down more toward these loans by spending around 15% until you are ready to pursue new professional development opportunities.

Empower Yourself

It’s important to ask yourself this question as a working artist: How many times have you thought you were bad at money? How often have you beaten yourself up about making poor financial decisions, or felt you were woefully uninformed? DiGiovanni’s advice is: Stop.

working artist
It’s a good idea to have a clear sense of how much you spend each month when developing a budget.

“Don’t allow the excuse that because you’re an artist, you can’t or don’t have to be responsible with or be successful when it comes to money,” DiGiovanni notes. There are several examples of artists and creative professionals who have worked out effective ways to capitalize on their creative talents. By following tips outlined here – paying off high-interest artist debt, allocating income effectively, and keeping ahead of spending habits – you can feel empowered and self-assured in your financial acumen.

DiGiovanni leaves a morsel of hope for those of us who are not financial management-inclined: “Realize what money is – a tool to build what’s important to you. Treat it like you would the tools of your craft,” he says. By taking a no-nonsense approach toward building a smart and savvy financial foundation, you can continue to empower yourself with mindful choices and be aware of how your money management is effectively building your career as a working artist.

How do you manage artist debt? Let us know in the comments!

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About the author

Audra Lambert

Audra Lambert is an independent curator and art critic based in New York, NY. The founder of Antecedent Projects (2014), a sustainable urban curatorial consultancy investigating site-specific heritage, and is Editor-in-Chief, ANTE. Mag. Lambert manages ART360 by Orangenius, an immersive, 3-D art viewing experience, and serves as Managing Editor, Artrepreneur.

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