Kathy Griffin has a wise view on finances and money management. If you listen to her advice, you may find yourself in a much better financial situation and if you don’t listen to her advice, she may make fun of you on her show one day!
During an episode of My Life on The-D List, Kathy Griffin’s reality show, she made wise jokes about the actors and actress and their finances. Kathy’s comment was that she hates when she hears actors and actresses say, “I don’t do ‘business’. I’m an actor.” Kathy’s sarcastic but true comment about why this bothers her is that “business” is PART OF HER JOB. You need to learn the business side of things. You, as an actor or actress, are your own business and you have to manage your professional life and personal finances like a business.
Do you think that does not matter to the average citizen? The reason this is such an important point is that it is relevant to all workers. You spend a great deal of time working to earn money, but most spend very little on how to make that money work for you.
How do you learn to manage your finances?
While we may not all have the A-list actor / actress income to manage, everyone should manage their money. The first step is Money 101: Create a budget!
Alarming statistics
Half of American households have accumulated less than $ 1,000 in “net financial assets,” the value of money in the bank, stocks, bonds, and other securities after subtracting loans, credit card debt, and other secured debt.
Most Americans in households with incomes of $ 35,000 or less believe that they are more likely to accumulate savings of $ 500,000 by winning a lottery or sweepstakes (40%) than by patiently saving and investing relatively modest sums (30%).
– CASH project
START MANAGING YOUR MONEY BY CREATING A BUDGET
1 – KNOW YOUR TRUE INCOME
Start with the basics. Identify how much money you make.
Start by calculating your take home pay and multiplying the number of checks you receive per year, then divide by 12 (months in a year) or by taking your net annual income and dividing by 12 (months in a year).
For example:
If you are paid $ 1200 weekly, then your monthly income is
$ 1200 x 52 (weeks in a year) = $ 62,400 / 12 months = $ 5200 per month
2 – MAKE A VERY, VERY DETAILED BUDGET
What are your actual expenses? Take a look at how you are currently spending your money. By looking at your current spending habits, you can identify the areas where you need to change spending. Some “necessities” are often luxuries that we like to consider as necessities (coffee in the morning, going out to dinner, new shoes for each new outfit, etc.).
It’s smart to evaluate your current expenses and set goals that take into account your financial goals. Once you’ve set your budget, SET IT UP and monitor your spending to make sure it stays within the guidelines you’ve set.
It is important to itemize all the standard monthly expenses that you have.
Be realistic about how much you actually spend. Look at how much you spent last month on these items and you will be amazed.
Here is a sample list of expenses:
EXPENDITURE # 1
Savings: 10% of income (remember to PAY YOURSELF FIRST!)
Home spends
Mortgage or rent
Homeowners association
Food
Groceries
Eat out
Coffee Tea
Lunches (children)
Electric
Gas
Cable
Garbage
Sewerage
DSL or high speed internet
telephone
Home office supplies
Personal expenses
Car payment
Car insurance
Gas
Health insurance
Medicines
Mobile phone
Club or membership dues / expiration
Clothing
Shoes and accessories
Toiletries
Subscriptions
Entertainment (movies, theater, amusement parks, etc.)
Debit payments
Credit card payments
Loan payments
Student loans
Second / third mortgage payment
Boat, RV, Timeshare Payment (s)
Medical bills
If you have children
Tuition / Nursery
Clothing
Sports, classes or club fees
School expenses (formal, photographs, uniforms, etc.)
Baby sister
Miscellaneous expenses
Special savings (see # 3 for more explanations)
Include all items omitted from the above list that you spend money on
*** NOTE: Now that you know how much you spend each month, SPEND SMARTER. Make changes to your budget and change your spending habits so you can save on a monthly basis. ***
3 – THINGS YOU NEED TO PLAN BUT IN GENERAL
There are items in your budget that pop up erratically but inevitably will. Things like new tires, holidays, Christmas, etc. If you haven’t created a separate savings budget to plan for these items, you’ll soon find yourself over-budget and in a bind.
Learn the number of “Special Savings” you really NEED to save each month.
This list will include the cost of the following:
Income tax
Car maintenance such as new tires, oil changes, brakes, etc.
Vacation (s)
Christmas expenses, gifts, etc.
Vehicle registration
If you own a home:
Homeowners Insurance
Property tax
Home repairs or maintenance costs (water heater, roof leaks, etc.)
4 – SAVE, SAVE AND SAVE MORE
Whichever savings method works best for you, DO IT. Even if it’s a jar on the dresser, you fill it with money, a savings account, whatever. Take 10% of your earnings and pay yourself first, that is, save. Not only will this money create a mattress for emergencies, but it will help you sleep better knowing that you have a little hidden in case the unexpected comes up.
It will also create the habit of saving and budgeting will lead to smarter spending, which in the next few years will turn into a strong future.
Even if you finish your spending and savings budget and it is more than you earn, it is a starting point. 40% of Americans live on 110% of their annual income! Do not be one of them. Reduce expenses or earn more income. It is better to have to deal with your finances than not even to know that you have a problem.
More sophisticated money management, such as investments, can be addressed later. Get started by getting familiar with the basics and getting to work!