Nobody can go back and start a new beginning, but anyone can start today and have a new ending. So even if you have never saved money in the past, it’s never too late to start.  Do it the other way, after you pay all your bills, buy some clothes, a new car, take a trip, and so on, it is less likely you’ll have any left. Take it out and put it away first, then live on the rest. Come on, stop laughing. I’m serious.

Let’s just pretend for a minute that you are concerned about your financial future and how you’ll support yourself down the road. Start by adding a zero to what you currently earn to get a good idea of how much money you’ll need by the time you stop working so that you’ll have enough cash flow to keep your current lifestyle.

Lifestyles of the Rich and Frugal

Creative people can make money from their ideas.  Now I know that you can become wealthy with your talent and skills. Then you have to make that money make more money. Although inheriting money is still an option. But even if you did inherit great wealth, if you didn’t save some you’d probably end up right back where you started. For some clues, let’s look at what the wealthy do.

The rich (who save and invest) actually do get richer. Money begets money. They make prudent choices. Because they have money they can take advantage of opportunities. They can get loans. During downturns in the economy they can buy up bargains and afford to hold on to them. Then there is the mind-set that once you’ve made money you know you can do it again. There is also a sense of security that makes them less anxious and desperate. They have an air of confidence, and confidence sells. They feel they are predetermined to be wealthy.

Who wants to be a millionaire?  Okay, you can put your hand down now.  Answer the following question. The best and most certain way to become wealthy is to:  A) Ask for and get a raise at your work.  B) Write a book about finances  C.) Start a business.  D) Save and invest wisely.  Answer “A” will not make you wealthy.  You’ll make more, but likely also spend more.  “B” unfortunately for me, is a long shot.  Okay, so it’s either “C”, “start a business” or  “D” “save and invest wisely”.

Luxuries are not as important as your dreams.  Don’t try to keep up with others spending. Isn’t more important to pursue your passion and not possessions? What is your idea of wealth? To lie on the beach all day, every day? To have happiness, contentment, focus, direction, passion, freedom, fame, purpose, or critical acclaim? This doesn’t require money. Even so, how much money would make you feel wealthy? Why do you want wealth? Being a creative professional isn’t easy. You may never have the security and riches of someone with a regular job, but if you play your cards right, you can be better off.

Your Net Worth

Let me begin by saying you are wonderful the way you are. Your value is your talent, skill, and ability. Your gift of being able to create things is invaluable. If only someone else would recognize that and drop large bushels of cash at your door just for being you!! But the definition of your net worth is more mathematical and material than putting a price on your talent. Your net worth is what you own minuse what you owe. You take your assets (your assets include cash, of course, plus any investments you own, your personal property, art, clothes, and the equity you have in real estate) minus liabilities (debt) and that gives you your net worth (yes, it can be a negative number).  It is a snapshot of your life at this time. The health of your finances can change. That means the diagnosis of your condition is reversible and not terminal.

QUICK QUIZ

What is stopping us from inccreasing our worth? Take this quiz and see if any of these apply to you.

1.  I spend more than I make, and I often spend money without thinking.
2.  I owe a lot in credit card debt
3.  I could die tomorrow, so why save?  I like to live for today, the hell with the future.
4.  I don’t know how to invest, so I don’t
5. I work for someone else
6. I rent instead of own a home
7. When I do get a big payday I tend to blow it on things that decrease in value.

ACTION ITEM

Run your personal life like a business. Think profits and bottom line. What’s the minimum you need to live on to cover your basic expenses? How much more money do you need for the ‘this’ and ‘that’ stuff? Add those two numbers together to figure out how much money you need/want to spend each month. Keep in mind that expenses include fixed things you can’t get rid of easily (like loans, alimony, taxes, child support, rent, car payments, and insurance). Variable costs include phone, utilities, gas, clothes, vacations, supplies, food, ads, travel and so on). Then multiply by twelve. Calculate your work (forty hours a week x fifty weeks is 2.000 hours a year, divide that by your yearly expenses). Two thoused divied by yearly expenses equals the hourly rate you need to earn just to break even. Is it a negative number? Are you just breaking even? Start to look for things you can live without. What do you feel you can cut back on? You can probably trim expenses without even noticing it. The word ‘budget’ doesn’t conjure up images of wealth, but believe me it is the key. If you can associate living on less as a positive thing, you’ll be better off for it and may even embrace it. Remember, your options are to make more money or spend less – or both. Try this affirmation on for size.  “I handle money well. I am debt free. I save money.”