Have you blown through your New Years Resolutions yet? Have you set one? As we see the signs of life in the film industry, and hear the news tell us how wonderfully busy this year is going to be, we should take the time to make a plan. As a Self-Contracted Employee, you need to be thinking of your future.
This may seem redundant to many, and most will say they know all about this, but how many actually put into practice a plan for their finances?
Finances for the near future and distant. As the paycheques become constant, and the bank accounts fill a bit, many will begin to go on a spending spree. Either sushi, movie marathons of back to back Star Wars: The Force Awakens at the nearest theatre or take that lavish trip to Las Vegas you always wanted.
Let’s start by getting into those higher paid jobs. Join the DGC logbook program to make it easier to get those higher paid KPA positions. Then get your membership as quickly as possible to access the TAD and TAL categories. Or when you are on set, talk to the departments and see if they will bring you on for a day or two (this is easier in non-union). Start getting days. By increasing what you make in a day, you can increase the amount of money you have by the end of each week, and year.
Before you start to spend that well earned money on the remote controlled BB-8, you should build yourself a budget. The budget should reflect the money you spend that you currently live off of. Not the budget you want to live off of in that new BMW.
Take one month and add all the money you owe; Rent, Car/car insurance, gas (rough estimate, keep receipts for when you file your taxes, you can claim them), Student Loans, credit cards, gym membership, Netflix cell phone bills, Union Dues (Joining fees) etc and add up how much you spend. These are all your Fixed Expenditures. From this you will have a rough calculation of how much a month you need.... Say $2000.00/month = A.
Then take the times you eat out, ($15 Sushi (Saturday), $5 Latte morning noon and night (total $15)) the movies you go to, the skiing you want to do, or the night at the club etc. These are your Variable Expenditures. Say $500.00 = B. A+B = C
Your plan should be simple, save C amount of money for 3 months Fixed Expenses.... Or C x 3 = 3C. 3C = $7500.00. That is the money you need in order to live for 3 months if or when the industry slows down.
The rest of what you make a month should go into savings.
Maybe not all of what you make has to go into savings, but enough of it to secure yourself while the industry is in high gear. For those in severe debt, do what you can... coffee on set only can save you $10-25/week. (it's free). Debt is a killer on what you can do. Now is the time to knock that Debt down. Stop using credit cards and live off cash. 19% interest on a credit card is a rip off, sort of like using Money Mart. If you do use a credit card, you should be able to pay it off before you get dinged for the interest. As well, those reward mile cards have some of the highest interest rates. That is how they allow you to get those “Free” flights. You’ve probably already paid for the flight 8x. The only way that works is if you never pay interest.
Now what do you do with your money you are saving? Try a High Interest Savings Account (HISA) or a Tax Free Savings Account (TFSA). These give you interest on your savings. In the TFSA the money you make isn’t taxed. A much better Vehicle than Registered Retirement Savings Plans (RRSPs). However, in all cases there is a fee to take money out of those accounts. RRSPs are the highest, and you are taxed immediately as it is income. As for TFSA, you could be charged $5 per withdrawal. That can add up quickly if you aren’t aware and buy coffee every morning. That $5 latte just cost you $10. Buy one every day of the month. Goodbye $150. Is your latte worth $150/month?
*If you belong to a union, the producers contribute money on your behalf to RRSPs. This is a great benefit as it is money you aren’t initially taxed on. Just remember taking out $100,000/year might put you in a higher tax bracket.
Investing in RRSPs can be safe depending on how aggressive you are. They can increase your tax return – as can TFSAs. If you are looking for other ways to save and make money read some of the investing books out there. "Stop working" By Derek Foster might inspire you. http://www.stopworking.ca/html/books.html. The choice is yours entirely... We will make another post on this kind of thing another time as this deals with safe investing techniques.
The Advice here is this: Live how you are “Right Now”. Then ask yourself what do you need and what don’t you need? Can you make coffee at home rather than spend $2 every day? Pay off debts and then save with the rest of what you make. Set yourself up first, then party. A PA that can be financially secure can do better than a teamster spending on all those toys.
The reason for this is simple. Our industry fluctuates all the time. Work is not guaranteed. Shows go down, people get fired when someone else screws up. There will always be something that we should save for. Now that work is abundant is the time to set oneself up for the longevity of working in this industry.
If you are prepared, you can begin to choose your schedule, or the shows you want to work on. You can take that 4 weeks off to shoot your short. You just don't have the freedom when your next PA paycheque to pay rent doesn't come on time.