One of the biggest challenges for us is learning to deal with the ups and downs of our bank account balances. Early in our marriage we learned that our cash flow is going to be feast or famine (including times when production paychecks bounced!). Periodically, this has been a source of conflict between us, but we have made peace with this reality of filmmaking. We have had our share of mistakes, but have found a good budgeting rhythm.
A few years ago we sat down and calculated the bare bones of what we need to survive–and by survive, I mean . . .
- have a roof over our heads
- have enough food to keep us healthy
- have enough cash to put gas in the cars
- put aside a $1000 in a savings account for emergencies
By the grace of God, we have been able to this (and more) even in our leanest times. We decided that no matter what, the first 10% of our increase (all funds entering our bank account, whether earned or given to us) would be tithed to the Lord and given to our church. This has been a huge blessing to us, and has encouraged us even when income was scarce and job prospects were not on the horizon. I will explore this topic more at a later date.
Now for the nuts and bolts:
We have determined that we are going to live a very modest lifestyle, which often means making sacrifices that are socially unpopular. We live in a small, one-bedroom apartment. We do not have cable. In tight times, we do not dine at restaurants. We buy clothes/shoes when what we own has fallen apart or can’t be repaired. We buy our groceries at Aldi. We troll Craigslist. We use Redbox instead of seeing films in theaters (ironic, eh?); the silver screen is a rare treat. We use the public library for books, music, etc. We drive cars that are paid in full and are 10+ years old. I cut my husband’s hair with Wahl clippers. I use a salon, keep a longer hairstyle, and only get highlights 1x a year as a treat; I could live without this and have done so when needed. We go for walks at our local state parks. We have second-hand furniture. Most importantly, we have learned to be content with what we have. We have learned to turn thrift and savings into an enjoyable adventure, and we celebrate bargains and the feeling of saying “no” to consumerism. When we do make an important purchase, we save steadily until we can buy a quality product that will last the duration.
My husband and I have made a committment to pay down ALL our debt. When we married we had a combined mess of eight credit cards, three student loans and a car loan. Through debt snowballing and perseverance we have whittled that list to four credit cards and one student loan. It has not been easy, but each time we see a $ 0.00 balance, we celebrate and find new energy to tackle the next balance. Using free accounting software such as Mint has been very helpful, and our credit union has been a valuable resource as well.
Admittedly, we have relied upon my income as our “base” and my job has supplied us with good healthcare insurance and a few other handy benefits such as a pre-tax health savings plan and retirement benefits. However, recently we have added a Roth IRA for my husband to start saving toward our retirement in addition to the money we set aside for my 401K. We recognize that at some point we may not have the safety net of my income to rely upon, as we are planning to start a family at some point. Our goal is for me to stay at home full-time with our young child(ren). There are lots of private insurance options out there right now; the new healthcare legislation has helped in some respects. We know that in the future we will be paying for coverage out of pocket from a company like Blue Cross / Blue Shield, Aetna, etc. No matter how financially strapped you may feel, there are insurance options available–even just to cover emergency hospitalization. The Independent Magazine has a thought-provoking and practical article worth reviewing. Though the article is from 2008, the information remains useful. Additionally, do not neglect to contact your state’s Health and Human Services office to see what low-cost plans may be available to you; you put your taxes toward these services, so do not be hesitant to use the services if you need them! Most importantly, maintain some type of medical insurance. It is a necessity in these times.
Cash savings has been our salvation time and time again. We set aside 10-20% of our income to liquid savings, some in our local savings bank and some in a money market fund through Ally. We have a goal to save enough to cover a full year’s worth of living expenses; at present we can cover about three months, but we are making progress.
So how can YOU survive on the unpredictable, often measly filmmaker’s salary?
- SAVE a portion of what you make; no exceptions.
- Get rid of debt, particularly credit card debt.
- Be diligent. Small steps over time add up.
- Do not take unnecessary risks. Stay insured (car/medical/home).
- Sit down and figure out what your minimum financial needs are. Live on that budget and learn to be content with what you have been given.