5 Financial Realities for the Independent Artist

My latest exhibition, COAST, finished a couple of weeks ago. On many levels it has been the most successful exhibition of my professional career. Both artistically and financially. And it feels great! I look on it as validation of all the hard work I’ve put in, of all the decisions I’ve taken in relation to marketing, promotion, pricing and most importantly it’s been a huge boost to my self esteem and confidence. And over the years I’ve learned to take great pleasure in that feeling, in that moment and just soak it up. So that’s what I’ve been doing for the past couple of week,s soaking it all up!

Because unfortunately it doesn’t last, and for most self employed artists the pendulum swings both ways and for every week you spend basking in your own success (deserved of course!) you might spend the other fifty one weeks of the year worrying about what every other self employed person worries about – what happens if the money stops coming in? And if there’s no money then how can I pay the rent? Or get a mortgage or a car loan? Or take out health insurance? Or fund a pension? Or simply buy the materials needed to make more work? This week I’m on top of the world. Four weeks ago I was at the bottom of a giant hole trying to convince myself that not all of the new work I had created for the exhibition should be consigned to a bonfire and torched! Welcome to the world, and the worries, of the self-employed artist!

So what exactly are the realities of being a self-employed artist? Just how different is it to being securely employed with a regular salary coming in? It’s a question I had considered but never fully understood until I had made the leap myself, and in particular the consequences of giving up full time employment. So here is a short reality checklist, 5 financial realities to be aware of if you are considering going out on your own. It’s intention is not to put you off but to make sure you jump with your eyes wide open!

Financial Reality #1: Perhaps the biggest reality check for most people is adjusting to not having a weekly/monthly regular salary coming into their bank account. If you are used to the security of a regular income then it can take some time to get used to the fact that even though you may be successful there will be some (many?) months when you will be generating no income whatever.

As an artist you will hopefully earn income at different times of the year, at different levels, depending on what you have been working on – an exhibition, a commission, some workshops, a bursary maybe etc. The simplest approach I’ve found is to put all of that income into a separate “business” account as it comes in and to pay yourself a monthly salary or allowance from that account. Your goal each year should then be to make sure you have enough “income generating events” (exhibitions, workshops etc) planned throughout the year to ensure you have enough money coming into the pot to pay yourself a regular monthly allowance. Not as easy as it sounds but it forces you to think ahead and plan your year and try to estimate your yearly cashflows.

Financial Reality #2: In the current economic climate your chances of getting a loan or a mortgage once you become self-employed will be severely restricted, if not non-existent. Becoming a self employed artist probably guarantees you won’t!

Quite simply, if you have no guaranteed regular income then banks will be very slow to provide you with credit of any sort.

But there are ways around it. In Ireland we have the local, friendly credit unions that may be much more open to providing a loan than a bank, providing you can show a fairly regular habit of saving with them.

If you are good at managing a credit card then it’s a great way of keeping track of your spending and most importantly it gives you the working capital you need to pay for frames, materials, art fair fees etc. It’s an expensive form of finance but if you are good at managing your credit limit and paying off your balance in a reasonable time frame then it can be worth the high interest rate – in return for the flexibility and freedom it gives you.

Financial Reality #3: As an artist living in Ireland you may believe that you have the same opportunity as every other artist to apply for and receive some level of funding or bursary from the many areas of public arts administered funding. The reality is very different depending on the type of work you are making. If you are creating work that is considered overly commercial – ie your aim is to sell it – then you will probably not be very successful with any funding application. A bold statement but I’ve a feeling I will have more people agree with it than disagree. I’d be interested to hear if this was the case outside of Ireland?

My advice? Put all of your energies into creating opportunities to market and sell your work, and generate your own income. Artists in Ireland have a huge incentive to generate income from their work – it’s tax exempt. We don’t pay income tax on any income generated from our art up to €125,000. Per year. That’s a pretty ridiculous figure given that 90% of Irish artists earn less than $50k a year, and close to 70% earn less than $10k. But the artist’s tax exemption is an incredible support for any aspiring professional artist and it is the one area of state support that we can take full advantage of ourselves and not have to jump over hoops to get.

And keeping on the theme of public funding and support for the self employed artist….if things don’t work out and you are not generating any income from your art you cannot go on social welfare, you do not qualify for job seeker’s allowance or most benefits. Being self employed in Ireland really does mean you have to look after yourself.

Financial Reality #4: If you are leaving permanent employment then the chances are that you have a pension and private health insurance which your company pays into. Once you are out on your own these become just another two outgoings on your list of monthly expenditure. And you have to decide how important they are to you and if you can continue to fund them.

If you already have a mortgage then you will also have life insurance – so that the bank get’s paid in the event of your death. If you have a family then the chances are you will want to increase your life insurance so that they will get something in the event of your death!

Suddenly there are a lot of monthly outgoings….and you will need to prioritise what’s most important for you: Life Insurance? Health Insurance? Private Pension? The reality for a lot of self employed people is that they don’t have any of these. And that’s a stark reality that needs to be considered carefully.

Financial Reality #5: I’m afraid insurance doesn’t stop there. There’s more! Last year I had a solo exhibition in Dublin. About two weeks before the show opened I got all the work back from the framers and left it in my studio – a quaint, cold, old farm building. As I was turning off the lights and about to leave I had a sudden realisation that if the studio went on fire or was broken into then I would lose 30 paintings with the potential value of $30,000. Six months work. It was like someone had hit me with a brick. I worried about it every night until I was able to deliver them to the gallery (where they were then covered by the gallery insurance). Insuring my studio, or my work hadn’t occurred to me before, but now I realised that this was my livelihood, my business. So I took out a specialist Artist’s insurance policy.

The policy covers work in the studio, in transit and work in progress, as well as public liability which covers my painting workshops both in the studio and out on location. And really it’s essential.

So, have I put you off yet? I hope not. Because if you really are passionate about making a living for yourself from your art then you’ll take all of the above in your stride and prioritise what’s important for you. Because being self-employed means taking risks and believing in yourself. It means cutting yourself free, setting yourself apart from the safety and security of being a paid “employee”, of having a controlled, relatively predictable life. In it’s place you are choosing to live your own life, to live off your own abilities. There is a feeling of self worth that comes with that which is impossible to convey to anyone who has never experienced it. It’s something you can’t put a price on and it’s what keeps you going when things are looking a bit rough. A self belief that you can look after yourself.

So consider carefully the financial realities set out above but remember they are only one aspect of what it is to be a self employed artist. And as your career develops and the more successful you become you will hopefully find yourself in a stronger position to deal with them.

In my next post I’ll be looking at some of the realities of the day to day working life of an independent artist.