Alex Beauchamp on Money! Money! Money!
Alex Beauchamp will be available via live chat to give advice on how you can be a successful entrepreneur. Live chat: 7.29.07 at 7pm EST, here on Writers Revealed.
Money is a funny thing - so many people want it, few seem to have it and even fewer want to talk about it. I’m not sure why so many people are so tightly lipped about money but I think being quiet contributes so much to why people don’t understand it, are afraid of it or simply don’t have it. I think people should be taught fiscal management in schools instead of about the French revolution (and I’m half French) and I think people should really talk about money so they can learn whether or not they should be self-employed.
How I financially survive is probably the second most common question I’m asked. I do not have a sugar daddy (you wouldn’t believe how many people think this!), I do not have a trust fund, I do not have parents, and I don’t have lotto winnings. So how do I survive financially?
Here it goes:
In 1999 when I moved to America, I literally lived off $7,000 for the entire year - and that was with a boyfriend! So, I started off with very little. Then, I got a corporate gig and began to make really good money. This combined with a very, very simple lifestyle allowed me to save funds easily so that when I quit my corporate gig to write, I had savings to back me up for awhile. Which was good because the first year I made very little money. In fact I made such little money that about half-way into the first year, I spent a week interviewing at Helly Hansen for a top-level exec position which I ended up getting. On my first day of work, I walked into the lobby and stood there for a moment. Then I ran to the washroom where I threw up. Having that reaction I knew I couldn’t go back and without checking in, walked out and declined the job.
After that, I worked my ass off to make money.
Every year I made a little bit more money so that last year, I had an excellent financial year in which I made more as a creative entrepreneur than I did at my corporate job.
However.
Before I make it sound all easy and glamorous I feel I must disclose how I live because I think my lifestyle is a huge reason why I was able to develop savings and live off of it for awhile and I think it’s also crucial to how I survived the first two years especially as a self-employed soul.
I live very simply. I haven’t lived in anything larger than 800 square feet and currently live in 600 square feet. I’ve always paid a lot for rent (my current rent is $1725 a month) for a little space (I have no parking, no dishwasher, no washer/dryer) because this allows me to live in an area where I can walk/have safety and just enjoy. Because I walk so much, I very seldom use my car (which is a 2004 Toyota Corolla - nothing fancy but dependable and a great car). Not driving so much allows me to spend about $20 a week on gas. I don’t have air conditioning (which last week when it was 110 in my flat with 80% humidity I wish I did) and I don’t use a lot of energy so my electric bill is around $25 a month and I don’t pay for water.
My flat is simply furnished (I confess, too simply at the moment). I have a mattress with no bed frame, a small Ikea wardrobe, a couch I paid for with cash and got a major discount on, a TV stand I also paid for cash and got at a 70% discount from Pottery Barn (LOVE THEIR DISCOUNTS!), a desk and an ottoman - that’s it. They’re all things I adore and things that are high quality so I don’t have to worry about replacing them every year. Buying smart has allowed me to buy well. My TV is about 9 years old and cost about $100 and I don’t pay for cable but I do pay for Netflix, a $20 a month movie service because I do like movies. I don’t have a stereo system and I don’t really buy music or DVD’s. I also don’t smoke or buy alcohol which saves a tonne of money. I get to go to premieres and concerts for free thanks to working in Hollywood and having good connections.
True, I shop at Anthropologie but most of my things are marked down - I rarely pay full price and I don’t own very many clothes (they take up about 1/4 of space in my wardrobe). I have four pairs of shoes and I have four plates and four bowls. I have one credit card, no debt, I don’t consume very much and I own even less.
My money is spent mostly on food. I shop exclusively at Whole Foods because I really believe in that company and want my money to do more than just buy things. I also have an allergy to gluten (anything made with wheat, rye, barely, citric acid or vinegar) so I have to really read labels and watch what I eat or I’d be dead. So, shopping for food isn’t cheap - about $250 a week I spend. Although, I do go to my favourite cafe for brunch every Sunday and I do also adore the Beverly Hills Hotel and the chef at the Ritz understands my gluten-free needs so I love dinner there. So food is where a lot of funds go because it’s both a necessity and something I enjoy.
My money is also spent a lot on travel - sometimes for work and sometimes for pleasure. I’ve stayed in some of the world’s best hotels which are sometimes paid for and sometimes not. I’m OK with spending $350 a night for a room and I’m also OK with paying for a first class or business flight although because of the home buying thing, I’m taking less trips because I’d rather have an office with a desk than extra leg room. About 75% of my travel in the past two years has been work related so that’s when I get to travel the real high life without making a huge dent in my pocket book. I’m taking a trip next week for three weeks across Canada. My accommodation, transportation (except air fare) and gas are all paid for. I have to pay for my own food and activities which might be reimbursed by my editors down the road. Getting paid for this assignment won’t happen until the fall when published and that’s the only other incoming cheque I have waiting for me this year since I haven’t been working for two months. My money has also gone to healthcare since I have a genetic auto-immune disease which had me really ill for the past three years. Before proper diagnosis I had spent close to $9,000 on medical bills which was no fun (and I had good insurance).
I’m in the process of looking to move to another state which won’t be cheap and I’m looking to buy my first home, also not cheap especially considering the area and type of house I wish to buy - my mortgage/taxes/insurance will be more than my current rent and insurance. So I do spend money but only on things I think are important to me and I can afford- and not on the things I just want. This is not always easy especially since there are always things I want. For example, getting a house is terrifying because of all the things I’ll need and don’t have. There’s all the appliances (which must be top notch, energy efficient) a mower, garden tools, a kitchen table, a bed frame, dishes! I’d love to have a shopping spree at Anthropologie and buy everything I adore. There’s books I want and gifts I’d love to give and so on.
The wanting never stops but I have to balance the wanting with the needs with the money. I use the program Quicken to manage my money so that I always have my bills paid first, then I have savings build and then what is left over I can use for the wants. This way I don’t have so much fear or guilt over money because I’m in control of it at all times - regardless if it’s a lot of money or very little. This way, if I choose not to work for two months - I can. I can’t live all glamorous and carefree for two months because I can see, using my money program, how much I have and what bills are coming up. This allows me not only to survive the dry spells but to continue to live well with all my needs met which is very important to me.
Even though I’ve made more money each year, this career is not financially stable. I don’t know when the next cheque will come in or who will hire me or pay for my work. It’s always a financial challenge no matter how much the pay cheques are. I think that’s really important to know. Money doesn’t solve money problems. If you spend on things you don’t need or you don’t know how to balance your cheque book, then being your own boss is not for you because you will have financial problems and you’ll have even more if you make money. I don’t know one creative person or entrepreneur who does not have financial challenges. And it doesn’t matter if they make $100 a year or $100,000! The uncertainty of being paid is always hard so we have to plan so much more than someone with a steady pay cheque.
I fear sometimes I might make everything sound too easy or as though I have unlimited funds in which money is not an issue and is falling at my feet. But the reality is I love where I am and how I get to live so I sometimes don’t see the “problems” as “problems”. There are challenges for sure but I think because I get to live the life I want, I’m OK with those challenges, especially the financial. You work through them. You decide what is important to you so that you can make your life work. Being my own boss and working on things I love is so much more important to me than a Cuisanart or new shoes (ok, this is true 99% of the time!).
I think sometimes when one is unhappy, especially in America, they look for a “quick fix” to feel better. For a lot of people, shopping is this quick fix. But if one keeps spending money on “quick fixes” then you don’t get a long term solution. So many people want to quit their jobs to be self-employed but say that they hold back because of finances. They think if they just read a book on how to be creative that should be enough or if they “just give to the universe” that will make everything alright. But becoming self-employed requires changes both emotionally and financially - especially at first. This is why I always ask people who want to be self-employed what are their finances like. Do they spend money they don’t need to? Could they live with one car or commute? Could you shop less? Could you travel less? Do you have Microsoft Money or Quicken to track what you make and spend? What are their values? Why do they want to make money? How confident are they in not only making money but keeping it?
Working on your own is financially tough, I’m not going to kid you. But it’s totally possible if you make the right choices and commit to being financially responsible. It takes work, it takes daily management and it often takes guts to go without. But would you rather have things you don’t love and a lifestyle you hate than put some effort into working with money?
It’d be a hell of a lot easier for me to go and get a job at Helly Hansen and make X amount of money for certain each year. I’d perhaps indulge myself more in basic things, I wouldn’t freak out over buying a house, and I could buy a book without thinking of how I’d rather have a bowl of organic strawberries instead. Sometimes I’m frustrated with having to manage money so much and wish I could just go on auto-pilot and enjoy spending more without having to save for three months down the road. But, like I said, there’s a price to pay for that and it’s much higher than I’m willing to go.
If you want to be self-employed you must make choices and perhaps in the beginning, sacrifices. I don’t think I bought one thing the first year I was in business which was hard and terrifying! I’m not longer in that position but still, money has to be managed so that I can take this time off and that I can still eat well and get a check up and buy a latte or three without worrying.
I make no bones about wanting wealth and working hard to achieve it. It’s why I don’t just work for a pay cheque but why I also spend a lot of time learning about investing, learning about real estate, learning about what to do with money once I get it. I want to build wealth so that I can afford a certain lifestyle of having a home in a nice area, of eating well, of having health, of being able to entertain friends and to travel. Those are the things that are important to me and are why I work hard and why I don’t buy so many things. Perhaps I’ll one day become that bazillionheiress and able to have my needs met plus unlimited Anthropologie shopping trips but until then, I live simply so I can live well financially, emotionally and professionally.
I don’t want to ever struggle financially, of not being able to pay bills, of not being able to buy at Whole foods, of not being able to live well and enjoy life. So I make sure that I work hard and make great money and then I follow that up with spending and saving wisely. It’s the only way for me.
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