Personal Finance for Artists & Freelancers

 

Personal Finance for Artists & Freelancers

 

Lesson Info

Creating Goals that Really Work

So what we're going to talk about in these to say in this next segment is we're going talk about really making your goals a reality so fine tuning and being specific about the goal that you have so what are your goals and again, a lot of you don't know them so hopefully in these next a few minutes few hours when you get a little clearing your goal, share your goal tell me what it is we'll figure out how to make that a reality over the next few days so as I mentioned before, where do you want to be in six months? We are now in december I feel like I could be a little more clear about where I want to be in june like I'm already planning my summer vacation it is cold it's cold in san francisco, it's cold in new york and connecticut where I'm living where I work is cold everywhere but I'm thinking, oh, in june, I'd like to go to the beach I'd like to go why, you know first, but how am I gonna afford that? How am I gonna pay for that? And then more importantly, if I have debt, how am I goin...

g to pay that off if I want to save for a down payment? I want to buy a home in june if I want to start saving for my retirement so the question is where do you see yourself in june? Where would you like to be in june so first stop and really think about that where would I like to be with my money that I would feel accomplished and you've heard me refer this a little bit before is comparing money teo eating habits, medical checkups working out the goals just is important so if you're thinking about running a marathon would you just get up and run that marathon tomorrow no or maybe thinking I'd never run it but if you were to run a marathon or if you were just to do a five k which is an accomplishment in itself you'd have to start training for it so money is exactly the same so if you want to start saving more you'll have to start saving in very very small bite size increments if you want to start eating healthier doing a cleanse or something crazy like that again you're not just going to run out there turn tor and do it maybe you'll start saying okay, I'm going to cut out dairy your I'm going toe just you know stop eating fast food or stop eating cookies every night or what not so think okay maybe you won't stop eating the cookies but think about your money in that same way is let me think about this and bite size pieces so where do I want to be in june so it's a bite size and then it's also a dollar specific amount. So what I hear when I start to really press my clients or press my seminar attendees on goals is what would you like do with your money here? I want to save and invest great how much? How much you want to say how much you want invest because if you just say I want to lose weight but you don't have a specific weight amount it's not gonna happen, so start thinking about your goals very dollar specifically, and while I want you to reach for the sky, I also want to think about it very attainable. So maybe you are on ly going to save one hundred dollars a month, maybe you're dead, you're only going to pay off a thousand dollars. Maybe you're only going to say five hundred dollars for the year into a roth ira. Maybe you're only going to save a thousand dollars for a down payment, but guess what? If you put a dollar specific amount to that goal, it is much more likely to happen. So do any of you have a just maybe a goal that you'd like to see yourself by june? No, just sheriff's sure, the goal first, I like to go to iceland for good ice one, okay, so how much do you think a trip tyson costs? Uh, probably about four thousand dollars, so if you need to say four thousand dollars by june so four thousand dollars divided by six is eight hundred about so can you save eight hundred dollars a month? I don't know, maybe you can maybe you can't, but now that's eight hundred dollars a month between now and june, so when we talk about the budget will say, ok, eight hundred dollars a month so that feels and maybe eight hundred dollars can't happen, hopefully can but the question is, can you save eight hundred dollars a month? If you feel like okay, if I make these changes in these steps, I can and then I can go to iceland knowing that I afforded the trip and I paid for it. See how it's just much more manageable right there. Great story of films says I have a recent cross country moved to pay off and a wedding to save for letting me have the move. Debt paid off for sure the wedding I know there's a lot of wedding photographers who are you know I don't want to get anybody into trouble, but what's interesting is I'll just share little stories I worked with this couple who are getting married, and they had saved so much further wedding, which is just amazing, but they couldn't afford it, they were saving for one day, so while I want you to have a wonderful wedding and pay the photographer because I know there's a lot of you that are watching this, but also think about, you know, am I sacrificing buying a home or my sacrificing setting up my future and security for one day? So when you think about this wedding, just be realistic, I mean, obviously, you sign some contracts and such, but but again, see the move, have you financed it with credit card of you borrowed the money like you say, you've already moved. So the question is, how did you pay for that? So if it's credit card, we're going to talk about paying off dead so that's, part of the dead, and again, we're really make that paying off debt goal a reality, and then the two the wedding again, as I just what with how the air so how much will the wedding cost you? Ten thousand dollars that you need to have by june, can you save ten thousand between now and the next six months, if you can't go backwards. What can I realistically say for the next few months? Maybe I can only say five hundred a month. Well, then I'm gonna have a wedding that costs no. What is by the three thousand? So really ninety dollar size amounts to that not saving for one day. How about a couple of weeks we got kala gator wants to say for a trip to southeast asia this summer. That's a more doable amount. Absolutely. So that's very similar as to what I did with how the air. So how much will that trip cost you? Much of the flight. And this is great that we're saving for a goal. So I want you to think a little more big picture as well. Like I love that we're saving for a wedding. We're saving for trips, but also just saving in general for the rainy day the ira. So think about that, too, but in terms of this trip to southeast asia, so much with the flight cost, if you're going to go there for three weeks, how much do you need in hotels or guest rooms or whatnot? So come up with the dollar amount again, maybe it's three thousand was enough for that, so three thousand between now and june, six months is five hundred dollars a month I mean, you'd also I think if you're a creative person going on a holiday like that, more likely than not you're probably generates I mean, come on a my being too optimistic, could you could you say you're going to say for the southeast asian holiday, but also try and schedule into that some way of making part of that count by doing something absolutely wouldn't what we're going to do is we will definitely talk about this is a lot related to the budget is finding the money for those trips, so that'll just be a line item is your trip will be there in addition to your rainy day fund in addition to your ira. So the point is we're just making it more of a reality we're putting that trip rainy day ira, the lefties so I know this is a little bit backwards here, so the trip is here the trip cost three thousand four thousand. Whatever the dollar amount the rainy day, you need to save one hundred the ira, you need to say five hundred, just making up the numbers will make those numbers a little more realistic. Let's just put that is a line item that's okay, I love to travel like a europe I go skiing on love it, put it in there just don't forget about these other two categories latino creative is asking how do we anticipate how much we need to save for having a baby? We'll talk about that we will definitely talk about that in terms of saving for a baby that's a great great question you know again it's it's what you do when you get very clear on what your expenses are having a baby and I know I've got two kids and I've worked with a lot of people who have had kids so probably the biggest expenses child care because if you both have to work or choosing to work or needing toe work who are you going to pay two for child care so I know that's always been the biggest expense obviously the food and the clothing of the toys doesn't have to be that much money initially and even furniture I mean but it's really child care that could be the biggest expense I mean there's another one here that's a bit relevant to from brie on is it good to save a large amount when you still have it? Oh I love that question it's a very controversial question and how I answer there's a lot of people out there who will not agree with me so we're going to talk about that quite a bit I believe that you should still save even though you're paying off your dad and the reason why is I want you to build that habit of saving so there's, no question that if you have five hundred extra a month for hundred of it should go to pay off the debt and hundred of it should go towards savings. So more of the money that you have extra should go to paying off your dad, but start building that habit of paying yourself and saving the money flex that muscle, but it is a line item absolutely start saving on think about also sort of jumping the gun here when we get into debt, but why did you get into debt? A lot of it is because we live beyond our means. We couldn't necessarily for the lifestyle, but also a big expense came up that we weren't prepared for, especially as freelancers. Maybe you had an income or two without any you had a month or two excuse me without any income, and so having that cushion of that savings would prevent you from either getting further into debt orjust really protecting yourself. The next thing is your goal share with a friend says what I was talking about before communicating your money. So really making that calling somebody up and maybe you don't have to say, I want to go to iceland now that have your you've told me you want to go to iceland, so I'm going to use you. You know, not saying I want to go to isil that's going to cost four thousand dollars or that I want to go to southeast asia for three thousand that's not the part you have to share, you have to share. I really want to say for a trip, I'm really motivated to share that, so I don't have to put it on my credit card or I really want to build up my rainy day fund. I'm going to start contributing to that every month, or I want to learn about mutual funds from my ira or I need to find a good c p ay that's my goal. Share it with a friend. Talk about it. If nothing else, a few months later comes back too. And they say, how are you doing with that? Oh, I need to get on it or I'm doing great. So what if your husband or your partner, um, is your friend? But then you're also have your money together and you might have to separate goals like you know you want to go to iceland? I wantto you know, by pointe shoes. You know what is what is? How do you? I think that that is such a good point and it was such a good point, so it's funny he's a lot of times when people call me and say, oh, do you work with couples? I say I do, but I'm not a marriage therapist know our money therapist or a couples counselor because so much of why what happens in our relationships and money is communication. So I think what you brought up summary is just such an excellent point is just talking about what we want to do with our money, and I know personally, I know my husband probably washington, you know, when we say okay, we just, you know, we get we had a look great month or we got a bonus, like, what should we do if it and we sometimes have different goals? I mean, we do have some of our goals is paying down the mortgage faster, putting extra into the right you are roth, ira or self ira, but you know, he might say, you know, I really want teo redo the roof. I'm like really I don't want to read to the room that sounds really boring can't win, you know, say, for hawaii for next summer and or wei have different goals, absolutely, but just talking about it because we're not spending the money tomorrow and so just right away sitting, you know, I had a client who said she had no idea that her husband really wanted a lake house or rent a lake house or do a lake house she's, like, I have no desire to do a lake house, I want to, you know, I'd rather get an apartment in the city or culturally, so I think it's just really bore about communication and finding a place for both those goals. Absolutely so again, just finding the total dollar amount in there breaking it out, saying let's, put five hundred towards your shoes and five hundred towards redoing the roof, whatever is exciting, okay, so let's eso, but sharing with a friend so that's part of the communication uh, the next part is using a financial calculator. We'll talk more about that. I'll give you some examples. So here's, just some examples about goals, so just saving three hundred dollars a month, but that is your goal. If you're already doing it great, bump it to five hundred. You know, you don't think I was just gonna let you get away with just three hundred, right? So if you have debt coming up with the dollar amount saying, how much can I pay off this debt between now and june? So if I have ten thousand dollars with a debt, I probably can't pay that off until now between now and yur, maybe you can but don't set yourself up for failure, so say I'm going only pay off a thousand dollars guess what I'd rather see you succeed with one of these goals feel accomplished and then move on rather than set yourself up and say I want to be debt free when it's not a reality it's like I want to lose twenty pounds by next week that's probably not gonna happen and then you're gonna feel really bad about yourself you want to save for a down payment? This is a big one and especially that I've worked in new york city one of the most expensive cities in the in the world is definitely not the u s and most of my kinds don't have necessarily they're not high net worth and you know they don't work on wall street, most of them they don't work in finance, they want to own something and they're like, but I can never afford to buy something in new york how my ever going to do it? So first of all I say you have two choices you can number one say, I'm never going to afford anything in new york forget about even like a good new york city suburb with a good school district so I'm just not going to save anything why bother right a year from now where will you be same place zero saved for the down payment nowhere closer to owning an apartment or home or b second scenario you can start saving for the down payment maybe you save one hundred dollars a month for it maybe save a thousand a month maybe you start saving something ah year from now you now have a down payment fund is it enough to buy that apartment you want in the west village or the upper east side or west chester long island no probably not yet but maybe it will be in five years but guess what your ten thousand dollars closer where your thousand dollars closer you started saving for it maybe your goals were changing and you're ready to buy something upstate or you ready to move to north carolina and buy something there in a cheaper community but the point is you've started saving for something and you're seeing it happen and I see on the other side my freelancers my freelance clients I feel like our my you know my little children who have saved and yet I have one client it took her six years to say for an apartment guess what she just did she bought an apartment in new york city never thought she could afford an apartment but a beautiful one bedroom I'm going to her housewarming party next month I cannot wait she never would've gotten started and she's in her mid forties definitely she's doing it ten twenty years later than she would have liked but she just started saving so put that is your goal that you'd like to save a few thousand dollars if that's really important to you we'll talk a lot about home finance I think in day three contribute five hundred to roth ira yes put that in your goal special if you're not saving for retirement find that money to start saving for retirement maybe you have an old for one care I r a a lot of you have worked to corporate america we've had ira is open for you whether it's at a local bank clean it up that's definitely a really big old simplifying your finances, consolidating financial statements, increasing credit score we're going to talk a lot about that today learn about mutual funds that you own draft a well I just had lunch with someone who's got two small children and she said do I need a will and I'm like run go get a will doesn't have to be some fancy estate planning attorney you need a well absolutely so we'll talk about that setting up automatic savings this is such a big issue for freelancers who don't want to set up money on an automatic savings and I'm telling you you can do it and you have to do it because a great story is a client of mine who came to one of my first seminars and said didn't say much actually she showed up another seminar, another someone or another seminar seven years later she dropped a statement in front of me she said eighteen thousand dollars it's like whoa that's great shoes that's because I set up that automatic savings that first seminar that you told me about didn't miss it make an extra payment for your mortgage sze will definitely show you those numbers, maybe that's your goal? Maybe you and that's a big goal, especially if you're a little bit older and if you have a mortgage it's great! You want to be mortgage free by the time you're retired, so even if you still have to work because you don't have enough money saved, you at least wanna have that big debt paid off. So maybe that's your goal in just even doing one extra payment a year can shorten your mortgage term by ten years. Figure out how much do you need to retire? This is a big one and I worked with a lot of smart people that don't know this number and then signed up for more classes so you love this class and now you're already on this you're filling the chat room with questions, you're getting a lot out of it keep going because just like I could not learn photography or being an actor or running a production company in three days, nor can you necessarily learn everything about your finances in three days, so continue signing up for classes and that's what's great about this course is that if you do buy it, you can just watch it over and over, so sign up for more classes, and a lot of my clients who have worked with and seen a lot of great success come to my same seminar every year, and they learn something new it's kind of like my daughter is obsessed with the harry potter books, and she reads him over and over, and she says every time she reads when she gets a new character, even though she's read that one over and over and I I can see that it's like you pick up something new with your money. So maybe this time you're really going to focus on the goals and mutual funds, and the next time you'll focus on buying a home, and next time you'll focus on doing a different budget. Next time you'll focus on drafting a will, so you're going to pick up something different. So this is an example, and I know it's a little bit fuzzy, but this is example of using calculators, so this is something that, um I started doing when I started working with personal finance about eleven years ago is is using these online financial calculators and again there really geared for people that are not in finance and they're geared for people that are really looking to use a tool that makes it a z z is possible for them. So here's one from bankrate dot com, but also kiplinger dot com. And I believe if you correct me on one of the resource is which is a handout, they list all the websites that we talk about from during the course. So, you know, if you didn't write this down, you can get that, as one of the handouts is an extra resource. But bankrate dot com kip linger, dot com these air great calculator these air great sites that have financial calculators. So I've just put one here savings. So how much do you want to save? How many years do you have to save it? What interest rate do you expect to save? How much money can you spare? How long will it take? How much do you need to save? So, according to this, I want to save six thousand dollars. I want to do it in two years, that means I need to save two hundred fifty dollars a month. So six thousand seems like whoa that's a big number but does to fifty seem like a big number? No so if I could just find two fifty a month which don't worry we'll find it so now that six thousand dollar goal whether it's paying off dead or saving for something specific is boil two, two, fifty a month and we'll find that two fifty so now the school has become manageable it has become accountable because you've shared a friend and you find whom the dollar specific amount of it on a calculator so go online used the calculators play around with them they're geared for you, they argued. I say for the layman or nowhere that word came from but they're not geared for financial professionals they're geared for people who want to play around with them. So if you have death that you want to pay off goto a calculator if you want to figure out should you buy a car lease a car goto calculator you want to save for a down payment? Goto a calculator so have fun with that I think cnn dot com cnn money dot com has calculators I mean you could just even google calculator financial calculator my favorite as I mentioned on bank rate kip linger money dot com and they're really they're they're done for the layperson I think kip linger has about fifty different calculators so in terms of making your goal a reality over the break call don't text don't I am don't you can chat with us but call a friend and john murray you had mentioned that your husband is your friend business partner okay, so well I love that and I think that's can be really wonderful what I would suggest is call someone who's not your husband I know I've got as I mentioned my my uh my big family but collar friend and say this is a gold mine can we see? You don't even have to say can we support each other to say this is something that I'm working on I'd like to save two hundred dollars a month I'd like to save for this I'd like to really say for my like one of my personal goals saving myself my sep ira which I'll talk a lot about mean, I am trying to fund my retirement as much as possible I love working I love what I do but I want to create choices that's why I say for retirement maybe when I hit sixty five seventy I don't want to work I want to have that choice not to or maybe I do want to work and I have saved a pot of money and then aiken start a foundation or I can support my children or aiken by three homes whatever but I'm creating choices so my goal is to fund my sep ira, which I'll talk about it's, a great, great great retirement plan for self employed people. So my goals to fund that ten, twenty, fifteen thousand dollars a year and I find the money to do it because I know that these are my high earning years. This is when I'm making my money, I'm working my butt off. I know how much I've run this year and again, maybe that's your goal, by the way, is just filling out those four numbers on the thirty second snapshot, but make a dollar specific, make it accountable by sharing it with somebody and go on a calculator to really find out more about the numbers. So don't just say I want to see more money, I want to find my retirement. I want to save twenty thousand dollars by to the end of two thousand fourteen into myself, ira. So maybe I want to save ten by june. I want to pay off a thousand dollars of dead. I want to save two hundred dollars a month. I want to save a thousand towards a down payment. So you see how that's dollar specific does not see much more of a reality, any goals, any questions there? I'm interested they're they're they're a couple of chats people up online at the moment who I think find this very overwhelming because perhaps you're in a situation where I have been laid off or where they have when you do like those figures out in the four sections one is just massive no and you know it can it can be draining I think so we're getting a little of that there's also a lot of support in the chat room, which is just awesome but I j now all if I could share this one with you my student learned it has reached sixty seven thousand dollars I haven't found steady work my only option has been too free life and I made five thousand dollars issue I have no idea where to start do I consolidate? Do I make the minimum payment based on income and let the interest accumulate? I've considered waiting until the bubble birds but parts because the interest rates absurd my stanley monthly payment will be outrageous I'm still trying to get back on my feet after a devastating layoff like that is a story yeah no no that's a tough situation and unfortunately and I I can definitely feel what this person's going through there is it a j is that the person a j j yeah yeah j u s o I mean a clearly the issues agent has got to find more income there's no question about it I mean there's a lot of things that a j can do with the student loan absolutely so he can put it on gradual payment a deferred payment he could actually stop it he's right? The interest will accrue so it'll build his loan but it could take some of the pressure off today so he can help with that but his priority has to be to find the income so whether he's fined again in his field or finding it elsewhere is definitely his priority because he's got to find the income to help pay for the student loan payment and to pay for other things so he should do something with the loan in the sense that he should either do put it on gradual or deferred consolidating it if he's doing it six, seven or eight percent that might not be the best idea I think from his case though interest rates are only going to rise it might not be right now it'll probably be for another year or two, but interest rates are only going to go higher so that could be his goal is saying I fight earn five thousand dollars this year I've gotta earn ten thousand dollars next year I have to find a way to find two thousand dollars of income a month that's tough it's definitely not easy so hopefully he is finding support in doing that there's a kind of a related question says I'm a music educator and musician and know that my spin to earn ratio is in the negative each month working towards increasing monthly income and negative amount is decreasing but should I be putting money into savings at this point when I'm in the red each month well the question is is he or is this person are they earning less than their spending because they're spending too much so probably this person's goal is to really find money to cut from their spending so I still think that they should save twenty five dollars a month fifty dollars a month even if it's a token and at least you start putting that into your habit and paying yourself in valuing yourself that's really how I look at savings is I value myself enough to take care of myself and I know if the numbers aren't there they're not there so he really really needs to hear him saying it's here I don't visit here she this person really needs to focus on cutting their spending and I get it that red might be high then you've got to move and maybe you have to get reno we'll talk a lot about budgets but maybe he's really gotta trim a thousand dollars from their expenses I'd like to say earn more money I can't help you that much with that but I can help you with the expenses part jenna poles wondering when finding your number, how do you account for expenses you pay for once you like car insurance, we'll talk about that. I, too, like to look at things, everything on a monthly basis. So there are a lot of expenses that you might pay quarterly, or just a few times a year, like vacation insurance is a big one, so I definitely look at that on a monthly paces. So if car insurance is twelve hundred a year, then boil it down to one hundred dollars a month and that's a fixed expense that's, one hundred dollars a month. So while you might only pay once a year, you know, you need to budget for that. And now your monthly spend number, which you thought was three thousand, is actually four thousand because of those annual expenses.

Class Description

Surviving and thriving as a freelancer or working artist requires strong financial management skills, but getting there can seem stressful and overwhelming. Join financial expert and Fordham University MBA holder Galia Gichon for an introduction to a painless, seven-step plan for taking control of your personal finances.

In this course, you’ll set financial goals, create a budget that works for you, and establish the habits that lead to financial health. You’ll learn how to make financial planning less time-consuming by spending 30 minutes a week directly focused on your budget, spending, savings, and investments. You’ll also learn how to create immediate growth in your savings and investment accounts. Galia will also share key techniques for taking the stress and uncertainty out of planning for retirement.

By the end of this course, you’ll be able to confidently and successfully manage your personal finances, and have more time (and money!) to do the work you love.