Money Management for Artists: How to Do Well Without Selling Out

Elaine Grogan Luttrull has spent a lot of time with artists during her stints at The Julliard School and the Columbus College of Art and Design.

She herself is an artist. She's also a Certified Public Accountant. As such, she does not accept the prevailing attitude among artists that commercial success equals "selling out."

In fact, by brushing off the financial side of a career in the arts, she says, artists are practically ensuring that they will be unfulfilled personally, professionally, and financially.

Luttrull now helps creative people incorporate financial smarts into their pursuit of the arts. She is the founding owner of Minerva Financial Arts, where she works at increasing financial literacy among artists and arts organizations through tax services, budgeting support, business planning, and education. And she is the author of the just-released "Arts & Numbers: A Financial Guide for Artists, Writers, Performers, and Other Members of the Creative Class."

Pipe Dreams and No Plans

Artists can be resistant to the idea of setting financial goals in their artistic careers. In fact, they practically celebrate their financial ignorance, Luttrull says.

"It has become socially acceptable to be numerically illiterate, even while actual illiteracy appalls. What's worse is that numerical illiteracy seems almost to boost the esteem of artists. They can't be bothered with numbers because they are too creative," she writes in her book.

As an example, she tells of working as a financial advisor to a musician who hid behind a common complaint of artistic types: Commercial success means you're selling out.

The musician wanted to spend his time playing his own cutting-edge music in smoky clubs, but instead spent every Saturday night playing Pachelbel's "Canon in D" and "Celebrate" at weddings.

The money was good, but he was miserable. He had to take the wedding gigs in order to pay the bills, and assumed it would always be that way because he'd never be able to support himself with just his own music.

The smoky-club lifestyle would have remained a pipe dream if Luttrull hadn't convinced the musician to formulate a formal financial plan.

She helped him develop a budget and build up a cash reserve. Eventually he was financially stable enough to stop playing weddings and to pursue a more creative music career. And now that he's a successful musician, when he's asked to play a wedding, he quotes an astronomical fee -- the kind of money that will really make it worth his while to abandon the pursuit of his own music for that weekend. And oftentimes he gets it, but not at the expense of his creative fulfillment.

Opening Creative Minds to Money

Artists need to stop seeing managing their finances as a bothersome chore and instead view it as a tool to help them more quickly and efficiently achieve their creative dreams, Luttrull says.

While everyone needs money management skills, the approach to achieving financial security can be different for creative types. Since they're not working at a typical 9-to-5 job with benefits, people who work in the arts should be particularly mindful of the necessity to stay on top of the money side of their creative ledger.

3 Ways to Paint a Prettier Financial Picture

Luttrull's book includes worksheets and concrete suggestions for goal-setting, budgets, and business plans. We asked her to share some tips to help creative types overcome their aversion to commonsense financial advice. Here are her tips:

1. Think of your emergency fund as a "freedom fund." Like everyone, you need an emergency fund to cover the lean times and to free you from the stress of worrying about how you'll handle a crisis.
For you, though, an emergency fund represents a different kind of freedom: the freedom not to take jobs that sap your creativity.

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"It's important to realize that taking care of your finances isn't just doing homework, it's connected to meeting your goals," says Luttrull. "You have to realize that having cash reserves isn't just a good thing financially; it also means you don't have to accept some job that you don't want to do. You're serving your ultimate goal by developing a budget."

Keep in mind that you may need a larger emergency fund than someone with a more traditional career path, because your path is likely to be winding.

2. Develop a three-tiered career portfolio. Luttrull recommends creating a diversified career portfolio, especially when you are unable to support yourself with your art.

Your career portfolio consists of focusing part of your time on your main creative pursuit and supplementing that pursuit with related paid or volunteer work. The third part of this portfolio should be flexible, part-time, or temporary work to help pay the bills.

Luttrull calls these three types of work:

• Starring role: the one passion you have, such as to become a playwright, an actress, a choreographer or sculptor

• Supporting cast: a job or volunteer pursuit that relates to your passion such as teaching music, reviewing plays, or working at a gallery or theater

• Production assistance: a paying job that helps you pay your bills, preferably one that's flexible. It is not necessarily related to your passion, such as bartending or temp work in an office.

The combination of these three types of work can support you financially as well as spiritually and give you the opportunity to grow your chosen career.

3. Kick-start your endeavors with a clear project plan. "When I was teaching a financial planning class for people pursuing creative professions, one of my students was completely skeptical about the value of the class," says Luttrull. "About six weeks into the semester, he came up to me and said 'I get it.' It was a turning point for him when he realized that I was giving him tools that he could personalize and use to create the life he wanted."

That student opened a business account and developed a business plan to use on Kickstarter, a crowdfunding site. His project was eventually fully funded.

"Another client was working at a 9-to-5 job but was also an artist," says Luttrull. "She needed a business plan to get funding to work full-time on her projects, but she was using some text from her personal website instead of a real plan with numbers. I worked with her to develop a budget, to keep good financial records, and to articulate a business plan. Now she's left her full-time job, launched her business, and has three sources of funding."

Money Doesn't Hinder Authenticity

Achieving financial stability doesn't make anyone less of an artist or performer, says Luttrull. Ultimately, financial freedom makes it easier for artists to choose the projects that interest them most, which in turn fulfills them creatively.

Rather than sticking to their aversion to money, creative entrepreneurs can learn to control their money so it works for them. After all, "Money and creative success are not mutually exclusive."