You’ve probably heard the saying, “We are the product of our friends.” This is so very true. It shouldn’t surprise you that nice people who are knee deep in debt often have friends who are also debt-ridden. Perhaps they share feel good lines like, “I don’t need money when I have love.” While love won’t bring you more money, the two don’t have to be mutually exclusive.

On the flip side, some of my most creative friends also hang around with very creative, motivated people. They help drive each other toward success. They visit each other’s productions and exhibits, deliver honest critiques and push one another to constantly better work. Consequently, everyone wins.

What Pack Do You Travel With?

I was reading about dolphins and wolves recently. Both of these creatures work together in teams to survive. While they may not be strong or fast enough to catch prey on their own, they outsmart their food to win. It’s the same for successful people.

In his classic book Think and Grow Rich, Napoleon Hill extolled the virtues of creating a group of like-minded people with which you could share notes and deliver success. Now, “who you travel with” is no longer an accident. You’re actively searching for people to be near who are going to inspire you, cajole you, antagonize you, and make you stretch mentally. They’re going to make you push for more. Like a wolf or a dolphin, they’re going to help you thrive.

From a financial perspective, this is incredibly important. There are so many nuances to good money management strategies. Certainly, we try to share as many as possible here at Abundance Bound. My friends often ask questions about areas of their financial lives that are important to them. I hope they feel comfortable asking me for help because they know and trust me. Likewise, I feel comfortable asking them for tips in other areas of my life because I implicitly trust them, too.

Some mastermind groups have formal meetings. Each member talks about their career, their lives, their goals and plans. At meetings, there might be a featured speaker each week, or a member who goes into depth about their challenges to receive feedback and advice. Other groups work like a book club, where they may read books about mentorship (such as Keith Farazzi’s excellent Never Eat Alone), business practices, art, or marketing. Others just meet over coffee and talk. You decide how formal you want your mastermind to be, but the key is this: you are what you think about and work towards. If you enlist a group of friends to help you keep good thoughts and to stay in forward moving action, your career and your pocketbook will both soon thank you.

Who Do You Ask For Help?

While a mastermind group is important, it isn’t the only key to success. I strongly believe that we each need mentors. A friend of mine is 84 years old and has taken up poetry. She was telling me that her mentor is a 24 year old poet in Seattle. Imagine an 84 year old taking advice from someone who is 24? Mentors don’t have to be old to be wise, and there’s no age limit on asking for mentorship. We can always use guidance and support.

Who Fails?

Many artists struggle because they’re afraid to ask for help. This is also true for people I meet with significant financial problems. They think to themselves, “I got myself into this, I’m going to get myself out.”

The frequent result is that we ask for help right after we’re done completely messing up the situation! Things work out SO much better if you ask before you wreck your credit, your budget and your personal relationships with your money problems.

Ask for help early. Don’t reinvent the wheel.

How do you ask for help?

That one is easy. Ask. The method doesn’t matter much, but there are a few phrases to stay away from.

Never ask, “Are you interested….” When it comes to asking for help or selling paper towels, this line is sure death.

Never say, “I don’t want to bother you, but….” Bother? This is your life! Of course you want to bother them AND it’ll be rewarding for them AND you. You’re worth it. Don’t use demeaning language.

Never assume, “I know you can help me because you helped….” For many individuals this will result in a fast no. It’s difficult to respond positively when it feels your time is being taken for granted.

Your top bet:

-       Always acknowledge that you need help.

-       Let your prospective mentor know how much you respect their work and success.

-       Outline specifically what you’re asking of them.

-       Thank them genuinely when you’re done so that you can keep open contact in the future.

Now, go find a pack to work with and a mentor!

Our bathroom faucet drips all day if you don’t turn the faucet hard enough. I learned that the hard way, noticing the dripping only after a whole weekend away. Sigh. My only thoughts as I twisted the handle as hard as I could, were about all the money I’d let drip down the drain.

I’ll bet I’m not alone, though. How many parts of your budget are you letting drip away, into places where the money disappears? While that’s bad news, we can look at this from a “glass half full” point of view: there are plenty of money leaks that we can plug to gain a quick shot of much-needed cash. Even if you feel like things are going well, wouldn’t it be fantastic to have some extra money to save for retirement, a new house, your art, or even to gift to your favorite charity?

Here are five areas that you can attack today to add more money to your pocket book:

1)    Cut wasted home entertainment options. A friend of mine just purchased a Roku box. Another switched to Apple TV. What are these things? Both of these products and their competitors attach to your television and let you watch “channels” from internet providers like Netflix, Hulu, YouTube, Crackle, and many others (Roku has over 200 channels to choose from!). By dropping the cable cord, she was able to save $75 per month and still choose from plenty of entertainment options.

How to start:

-       Make a list of entertainment you pay for (cable, HBO, XMSirius Radio, Netflix) and decide which are important and which you can live without.

-       Call each provider you’re cutting.

-       Don’t let them talk you into “free/cheaper for a few more months” options.

-       Call each provider you’ve decided to keep and ask for discounts. You’ll be surprised how many you receive.

-       Explore internet television options carefully before purchasing. Depending on whether you’re a Mac or Windows household, you might prefer one competitor over another.

2)    Purchase a smart thermostat, better insulation and other energy efficient tools. As artists, we’re comfortable living on the cutting edge. But sadly, when it comes to money issues, many creatives lag behind. Insulation isn’t novel, but if you lay more insulation in your crawlspaces, you could save hundred of dollars a year on your energy bill. You’ll be the coolest energy-saver around if you invest in The Nest thermostat. This thermostat tracks you and automatically manages the temperature of your house. No more leaving home and realizing that you’ve air conditioned your houseplants for eight hours while you were away. The Nest will detect your patterns and save you money and energy. Even better? You can control the Nest from your smartphone. These are only a couple examples. How many more ways could you save on your utility bills?

How to start:

-       Read about energy efficient homes at websites such as this Department of Energy page for good money-saving ideas.

-       Because energy-efficient thermostats such as The Nest don’t work in every house, read reviews detailing which homes work best with each product before buying.

-       Before adding insulation or other appliances, find a qualified whole-house energy auditor to perform an inspection. You’ll learn many effective ways to save money on your utility bills. Start with your local utility company to find auditors in your area.

3)    Create a weekly meal plan. In my family, we’re running 100 miles an hour, so there were too many nights we were tired and decided against cooking. Now I know how easy it is to plan ahead each week and create a meal plan. That helps me attack hectic days ahead of time using my slow cooker, premade meals, and by planning “leftover days.” For many families, this task alone saves them hundreds of dollars a month. Once you’ve purchased food and have a menu in writing you’ll avoid those late afternoon and evening “let’s just eat out” budget-buster moments.

How to start:

-       Start small if you’ve never prepped a meal plan. If you create elaborate meals, you’re less likely to cook at home.

-       Watch for specials at the store, but don’t go overboard. Buy staples like soups, mixes and cereals when they’re on sale.

-       While vegetables are healthier than prepared foods, don’t go crazy here either. You should only buy vegetables for meals that you’ll know you’ll eat in the next few days so you don’t end up throwing out lots of rotten food.

-       If you like technology, find a good meal planning app to help you save time planning.

-       Still pressed for time? Plan your meals with family or friends so that someone else prepares meals each day.

4)    Carpool or telecommute. That meeting of your mastermind group or writing club can be costly after you factor in gas, snacks and forgotten supplies. Instead, see how may of these you can reschedule into teleconferences. If you really need to meet face-to-face, find other participants who might be willing to share a ride.

How to start:

-       I’m often surprised when someone tells me they’ve never used Skype before. If both parties use computers, Skype is completely free and it’s still inexpensive if you have to call someone on their phone. Try it out a few times with friends or relatives to get the hang of it. You’ll be teaching others within days.

-       Ask participants in the group where they live. Not only will you seem open and friendly, but you’ll get a feeling whether someone else may want to share a ride or whether others would be open to a web conference.

5)    Create board game nights, movie nights, and social potluck dinners instead of entertainment on the town. Dinner and a movie can be costly no matter where you live. Taking two people to dinner can quickly run over $50 and when you add in a movie, you’re over $75. If one person brings a boardgame and everyone at the party chips in for dinner, you can cut this cost to less than $20.

How to start:

-       If you haven’t played board games recently, you’re in for a treat. Board games have changed a ton in the last 15 years, with Trivial Pursuit replaced by fun party games such as Wits and Wagers, Things!, Telestrations and Say Anything. Old “strategy” staples like Monopoly and Risk don’t hold a candle to newer options such as Ticket to Ride and Settlers of Catan. Check out BoardGameGeek.com (a huge database of board games) to see which games might be good for your next party.

-       Ask your friends if they’d like to come over for a potluck party. You’ll be surprised how open they’ll be to this low-cost suggestion.

-       Want to make the night special? If you know a friend who’ll play guitar for free or less than your movie night cost, surprise your guests with entertainment an hour after everyone arrives. Your potluck dinner will go from a nice gathering to a night to remember in no time….and without breaking your limited budget!

You just have to tell yourself that you are ready, you deserve it, and all you need is a plan.

Now perhaps there truly are some things you may not be able to afford. Like this yacht…

However, more often than not, you could (and should) be breaking down life into two columns:

-       I don’t want it.

Or

-       I am creating a plan to have it.

Let’s explore these two options:

I Don’t Want It

While listening to an organizing expert on the radio last week, I had a revelation. The woman said, “If you have less stuff, you can spend less time trying to organize.” It sounds obvious, doesn’t it? Yet, this is a powerful statement. You only have two hands. When those are full, there isn’t any other instrument in your life that you can use.

Maybe this isn’t as “wow” for you as it was for me, but there are some powerful nuggets of wisdom for your pocketbook in this thought:

1)    Decide what you don’t want and sell it. Think you “can’t afford” that vacation this summer? Worried that you aren’t sure how to pay for those classes to improve your craft? Selling items reduces clutter and creates cash. Donate unsellable clutter to claim a tax break if you are able to use itemized deductions on your tax return.

2)    Avoid buying new stuff. Your budget will heal if you only buy those items that you are going to use. Another question to ask: if I’m buying this, what item will I no longer use? Sell or donate the obsolete item.

3)    Create lists of opportunities with your electronics and subscriptions. I have a stack of magazines waiting to be read. I’ve decided to read one a day until the stack is empty and then I’m going to discontinue the subscription. A good friend just disconnected cable and instead bought a Roku internet television box for each set.

Overall, here’s my point: is it that you “can’t afford it?”, which is disempowering, or is the truth that you “don’t need it,” which places you squarely in the driver’s seat in your life.

I’m Creating a Plan To Have It

Maybe that yacht is in your future. Sure, you can’t have it right now, but that doesn’t mean that you can’t afford it. As it says in Napoleon Hill’s book Think And Grow Rich, if you want something bad enough, trust your subconscious brain to find a way.

I’m frustrated when I hear people say, “I wish I could have….” If you are a wisher, stop it right now! Wishing for something is too risky. A financial planning friend of mine once said, “Risk is all that’s left when you’ve finished planning.” In short: plan more and there will be less risk that you’re not going to achieve your goal.

Here are some steps to have what you deserve:

1)    Determine the cost. Every goal has a price tag, and it isn’t always calculated in dollars. In many cases, you may have to trade time or services for your goal. At times, this may make you realize that “I don’t really want it,” which is great! If you don’t want it, you can then move on to the next goal.

2)    Plot the course to your goal. Set a reasonable timeframe and set milestones. You may not have all the answers right now, but if you know the cost and also the time, your brain will begin to create ways to attack the problem.

3)    Work your plan and throw off discouragement. Often, the goal gets lost in the frustration that accompanies going after what you want.  Really wanting something means sticking with your plan, even if it looks like you may need to modify the goal.

See how that works? When you tell yourself “I can’t afford it,” you’ve given up hope. If you set a plan in place, you’ll quickly learn if you really want the goal and if you’re willing to put in the effort. Maybe you don’t reach the yacht, but instead this nice boat:

As Michelangelo said, The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.

Have fun dreaming!

I’ll bet you didn’t follow the crowd. That’s rarely the artist’s way.

Why do I bring this up? I only mention it because it turns out that creative people – those who are willing to go against the grain – should be great investors. Consider this: a financial company (Blackrock) sent out an email recently discussing the fact that many investors chase “negative returns.” Apparently, people try to guess where the market is headed; and Blackrock detailed just how horrible people are at guessing. In fact, it appears, when most people decide to turn right, the best decision was to turn left.

There’s Value in Turning Left

Everyone’s heard the mantra “buy low/sell high.” This even applies to your art, doesn’t it? Often I meet struggling artists who wonder “How come I’m not a sensation yet?” then they proceed to take the same steps as the herd.

It didn’t work in high school and it isn’t going to work now.

To truly get ahead, in your art and with your money, you need to turn left when everyone turns right.

The things “the herd” respects…a strict calendar and adherence to a to-do list, completely kills our creative function. To be creative, we need to play. Everyone else buckles down on the to-do list. The creative person throws it away.

I’m not saying you should be irresponsible. On the contrary. I’m saying that in some cases the most responsible advice I can give you is to turn off your “I should do this because everyone else is doing it” function. By looking down different roads, exploring new opportunities, you’re not necessarily wasting time. You’re creating magic.

“All who wander are not lost” – JRR Tolkien

The big ah-ha in this “negative returns” story for me today is that as a creative person, you stand a better chance of being a good investor and saver than the average person because you’ve already decided to change your life. We’ve already made the lifestyle decisions that allow us to play a little more and explore a wider boundary. We can teach this to others who don’t clearly understand how important this is in life.

How Can Being Creative Help Me Invest?

If your neighbor says, “I’m thinking about buying XXXX art, what do you think?” and they aren’t familiar with the art community, you may already know that the work they’re describing is overvalued. Think the same way with your investment decisions. If your neighbor tells you to buy gold because everyone’s doing it, there’s probably limited upside.

Here are some things creatives should know better than the “mass market” audience:

1)    It isn’t about today. If you wanted to make money right now, you would have become an accountant. Investors are patient with their money and don’t move quickly.

2)    Ignore the popular press. Magazines will always tout the 10 Stocks You Need Now. Creative people don’t really care what we “need now.”

3)    Everyone’s buying it! There is no gold rush in investing and there isn’t a quick buck to be made. The best approach is to get rich slowly through following the basics, like building an emergency reserve and diversifying your portfolio.

4)    Sometimes you have to be creative to find success. One client of mine really wanted to retire in northern California but couldn’t afford it. She found partners to help her open a bed and breakfast with wonderful views. Sure, she has to work every day, but the sunset over a beautiful wooded lake make her job much easier.

5)    You have to have vision to succeed. Many creative people I know enjoy imagining the “maybe” scenarios. By exploring all the paths available instead of focusing on just one, you’re able to reach solutions where others see only brick walls.

Too often, I find my creative clients are afraid of investing. Don’t be! Maybe you think “I won’t know what to do with my money!” It turns out, according to Blackrock, that the best moves with your money are generally found by ignoring the herd. Isn’t that refreshing?

You know the feeling. You have determination, drive, and the skills to achieve your dreams. You’ve worked long, hard hours to reach your goal and it still seems miles out of site. You’re not letting go, but it’s starting to feel like you’re just spinning your wheels.

I learned a not-so-obvious solution for this common struggle, when I began studying productivity experts. I found it hard to believe at first, but they stressed that you’ll accomplish more by doing less at a time. If you plan regular breaks, you’ll work faster than if you maintain long, stressed-out hours. Because life (and your art) is a marathon, it’s better to work ten hour days and keep moving than it is to work a single 12 hour grind that leaves you fried for the next three days. That last two hours can put you in an early grave!

I found it difficult

Taking breaks didn’t make sense to me at first. I didn’t feel like I deserved them. When you’re on the road to success, you need to be at the wheel, don’t you? …and every pit stop slows you down.

What I didn’t realize at the time is that you don’t take breaks because you “deserve” them. You take them because you must have them to continue moving.

Ultra long distance runners—those crazy people who run 50 or 100 miles (or more) at a time–break regularly for food, drinks, or to chat. They know that the body is a collection of organs that all need rest. Even the winners of these super long races will break for ten to twenty minutes at a time, even though that’s putting them further behind the clock at that particular moment.

They’ve learned that by slowing down, they actually speed up in the long run!

Almost there…just needed a tweak

So, I began taking breaks while working on a new monologue, or developing course materials for Abundance Bound. They were good for me. I’d walk in the neighborhood, visit with friends, surf online, and let my mind wander. Still, the residue of my business and art continued to seep into these times. After a few breaks, I discovered that I wasn’t really taking a full “break.” I was using the walk for creative time to think about the work I was doing! While that was helpful over the short run, I was missing out on the key component of the break that makes it successful: I wasn’t completely away.

Then I discovered how I could escape AND rejuvenate.

A friend asked me to volunteer helping a charity. The event doesn’t matter here. The fact is, I decided to “forgo” my break and join her. What did I discover?

Helping a charity was a true break.

I found so much goodness from helping out in an area of my community that had an immediate need:

1)    I was now part of a larger community working toward a goal that wasn’t mine.

2)    The need was big enough, that I didn’t have time to worry about my own problems.

3)    Watching how the charity operated gave me ideas on how to better use my skills without actually focusing on my craft or business.

4)    I networked with people that I needed to know. Guess who volunteers for charitable organizations? People you wouldn’t expect there. Powerful people with very little free time. They understand what I was just learning: volunteering is plain good business.

5)    I came back the next day incredibly refreshed and ready to attack my next project.

Want a financial bonus? If you itemize your tax deductions, you may be able to write off your participation and mileage to/from the charity (check with your tax advisor for details).

So, if you want to move faster in your art or business, lend a helping hand during your break. You’ll be surprised by how much you “get” when you take time out to give.

Miata,

I just have to write and tell you how excited I am to have found you! I’ve been an actor for five years, struggling along with everyone else, and I finally decided that enough is enough: I need to put together a plan so I can really focus.

All of this time, I thought I had already been focusing on my art, when in reality, I was part-timing everything: my job, my family and my craft. Now, you’ve put me on a path that I don’t think I could have accomplished myself. I have an emergency fund, a separate checking account for my business, and for the first time, real hope for the future. While I have yet to score that elusive “great part,” my auditions are much better. I believe this is because I come in focused and without worrying about “how broke I am.” Sure, I still worry about money, but not in the “OMG, I need this role” desperate way that I have in the past.

Thank you again for what you do. I just wanted to let you know there are people out there who appreciate you very much.

Jessica

It is rewarding when we hear from folks who have started to take control of their financial futures, because the unfortunate truth is that many people simply never will.

I was just reading some statistics from a group called the Employee Benefit Research Institute. While most Abundance Bound readers are self-employed (and not employees of others), we frequently fall into these same traps and the results of their recent retirement survey weren’t encouraging:

Did you know…

• 46% of workers have less than $10,000 saved for retirement;
• Of those age 55 and older, 36% have less than $10,000 saved;
• Only 12% of surveyed workers have saved over $250,000;

It’s so frustrating to read those numbers, isn’t it? But the thing is that we can make sure we aren’t among those groups. As Jessica did, start putting together your emergency fund. Balance your budget. Begin saving money.

More statistics:

• 53% of workers have never done a calculation to determine how much they need for retirement;
• 45% of people “guess” at how much money they’ll need

I don’t know if it’s more alarming that 53% haven’t tried to calculate a retirement number, or that 45% of people have guessed, when there are SO MANY tools available.

Believe me, I get how the 53% of people feel. There was a time when I didn’t want to look at any projections because I knew these numbers would only affirm that I was grossly behind. But, as is true with your art, the only way to improve is to understand both your strengths and your weaknesses. By ignoring the numbers, you never give your subconscious mind a chance to improve your own statistics.

Do yourself a favor: figure out NOW how much you’ll need to reach your goals. Then your brain will automatically begin working through ways to meet the goal!

Back to the statistics…

• 30% of all workers think a retirement balance of $250,000 is adequate for a lifestyle-sustaining income in retirement;
• Only 14% of 55 and older workers think that number is over $1 million;

Here’s a scary number: $250,000 is the amount the average retiree will spend…on healthcare costs during retirement.  That means you’ll need much, much more than that amount.

Sometimes people don’t think about retirement (especially when we’re young) because it’s a long, long time from now. However, these big numbers mean that we have to do some work now to reach any decent goal in the future.

You probably can’t do everything about retirement that you’d like. You may have other priorities….such as building a business, getting out of debt, buying a house, feeding children….but if you can work to put a little away every month you’ll make that monster task much less “monster-y” J when you reach the time that you WILL be able to meet the entire challenge.

Savers that I know always agree that the key to putting money away is to remove it from your eyesight. If you can successfully find a way to hide your retirement money, you’ll find other methods to meet the demands of today.

We can’t just bury our heads in the sand and assume things will work out.

Make the commitment to yourself to be more like Jessica and start working toward your financial goals right now!

For more information on this report by the EBRI, please visit their website.  They have all sorts of data and research available, but in my opinion, this is their most amazing survey.

Well believe it or not, if you expect to receive a tax refund check, you’re coming up on one of your “big moments.”

Every year, many people blow this chance to get ahead. They spend their refund on a big, frivolous purchase or take a vacation. While these might feel like fine short term uses of a refund check, there are several that could change your life, remove your debt, or help you build your business or security.

Here are my five favorite uses for a refund check:

1)    Wallop some debt. Here’s your big opportunity to focus on your art more. If you’re drowning in debt, you may find that your attention is focused more on side-jobs and instant income opportunities than the big picture. Clear your mind by getting rid of some debt payments.

For best results, tackle smaller debts first. Wiping these payments out creates  breathing room for your budget. If possible, use the money you save on these payments to tackle bigger debts next. Soon you’ll be on your way to being “debt-free” and focused on your income opportunities instead of the mountain of bills on the counter.

2)    Build your emergency fund. This one is especially important if you’re earning money from your craft. It’s more important for entrepreneurs to have an emergency fund than anyone else because (in my experience) people with uneven income find they have to dip in to reserves between opportunities. You may read that emergency funds should have three to six months worth of expenses. While that’s a great goal, if you’re starting from zero, try to secure at least $1,000 quickly. Most emergency bills are less than this amount.

Long term, your emergency fund should be at least six months worth of expenses. Why? By building a big reserve you can wait for the right opportunity to showcase your craft instead of focusing on the “quick buck” that might not be an ideal option.

3)    Invest in yourself. Are you an actor? Sign up for classes or coaching. An artist? Find a retreat. Whatever your craft, use your tax refund to gain new skills, build new artistic “muscles” and improve your work.

People often feel guilty about spending money on a craft that doesn’t yet return any (or much) money. Don’t. The only way you’re going to gain skills is to invest in yourself. Without the valuable knowledge it takes to excel, how are you supposed to reach excellence? While we’ve all heard of the prodigy who just one day “got it” when it came to their craft, more often the road to success is through hard work and experience. Buying more time with your craft is a great investment that you should be proud about, not ashamed of.

4)    Invest in your business. Let’s be frank: most of us could use better business skills or marketing work. Improve your website (or create one), buy business cards, hire a bookkeeper, or purchase that expensive tool that’ll take your craft to the next level. If you can increase your ability to earn an income, you’ll turn 2013 into the year your art really took off.

There’s a fine line here. I’ve met people who blew their entire tax refund on items they said they really “needed,” when deep down they knew that more cool toys wasn’t going to create a brighter future. Think closely. Would it be better to work on your business and marketing skills or invest in new tools? Don’t buy the item that’s a crutch. Expand your comfort zone.

5)    Invest in your future. Finally, if none of these work for you, put the money into an IRA, Roth IRA, or investment account for later. You’ve heard the parable about the animals using the summer to build reserves for the winter. At some point you’ll need funds, and an investment account will work for you to build these dollars.

While you’re at it, maybe it’s time to rethink the tax refund, especially if you’re currently struggling between paychecks. If finances are tight for you, ask your tax preparer what adjustments are possible to your withholding. By making some changes, you might be able to loosen the budget today to get out of debt and build your work more quickly, rather than wait for next year’s tax refund check.

I was recently drawn to a new book by Austin Kleon called Steal Like an Artist. As an artist, who also works with many artists, I thought it was an important book to read…especially since I don’t feel like I (or any of my clients, for that matter) are thieves.

Kleon says that in order to maximize creativity, you must realize that everything has already been done before. Creativity is seldom about finding a new subject; it’s more about placing your own spin on existing work. I think this is true. Shakespeare’s plays are all stories that had already been told. He told them better. Monet wasn’t the first person to paint people, landscapes, or buildings. He just improved on the existing process.

What does this have to do with money?

So many people want to be great at money, but they don’t realize that to be good at something (ANYTHING), you should emulate the best work of the masters in that field. Only then will you begin to practice good money management techniques.

Artists often tell me that financial books are boring. My friends in the financial industry tell me that much in the art community puts them to sleep, too! The person who achieves greatness is the one who can dive into an area and keep practicing until they become great. The funny thing about becoming great? Those areas that used to be boring are suddenly some of the most exciting parts of the task, once you understand the nuances of the trade.

If you’re a painter, what would you say to a person who stated, “Painting like Jackson Pollack is simple!”? How does it feel if you’re an actor and someone remarks how easy it is to just pretend all day? You know the truth, don’t you? It takes years of practice.

It’s the same with money management.

No matter where you are now, take the time to begin “stealing” some of the work of the masters:

1)   Open accounts and automate your financial picture so you don’t have to remember to pay bills, save money, and transfer investments.

2)   Write down your goals and create a simple timeline of how you’ll achieve them.

3)   Start simple investments that are well diversified, such as mutual funds or exchange traded funds. Not sure what these are? Begin learning how they work and invest a small sum. You’ll never know how to invest until you actually do it.

4)   Don’t be afraid to mess it up. How much will you pay for education? When it costs you a few dollars (and it will) consider it education. Learn from your mistakes and move on. Learn to protect against mistakes by the careful application of the right insurances.

5)   Build on your plan. You are what you think about. Continue feeding yourself financial information. At first, it might be tough. Choke down the healthy reading that you don’t like enough and you’ll soon realize that the boring information about stocks, real estate and tax planning isn’t boring anymore. Well…I’ll admit that SOME of it may still continue to be boring… J But there is some good news: you’ll now know how to tell the good stuff from the bad. Like the chef who knows exactly what to remove or to add to the stew, you’ll be pointing out holes in financial plans with the best.

Once you’ve followed these five steps used by the “masters” in financial acumen, you’ll begin to appreciate how each portion of your plan works for you individually. You’ll start to place your own spin on these steps to create a personalized plan that attacks your goals in the way you deserve!

You need to think of yourself and your art, as a business. When people come to me for help they often don’t see themselves in this light. They’re frustrated because they can’t get traction with their financial picture or with their craft.

I have good news. Solving both of these problems requires many of the same skills.

1. Determine how much money it takes to operate your financial life.

The most important part of your craft and your financial life is to make sure that you’re able to turn the lights on tomorrow. Sit down with a sheet of paper and list each item you must have to live another day. How much money is it?

Your first goal as a business owner is to meet and exceed that number. Is this short term thinking? Yes it is. But in any business book, you’ll find that the most important part of a sustainable business is to keep costs in check and to be able to operate even when times are lean.

Often when my students look at themselves as a business, expenses that seemed uncuttable suddenly are on the table. That cable television? My business doesn’t need that! The weekly Starbucks stop? I can’t afford it! Look for opportunities to lower your overhead.

Is this all the money you’ll need? No, but step one to any successful operation is keeping the lights on, right?

2. Determine your income streams.

Now that you know the company’s expenses, it’s time to find out how you’re going to meet those numbers. Just like you did with your expenses, write out all possible income sources. The act of putting data on paper is a powerful tool to activate your brain. You’ll begin analyzing the data the moment it’s in front of you. It’s amazing to watch people suddenly realize ways of making money they’d never imagine.

Once numbers are in front of you, it’s easy to start asking, “Am I charging the right amount?” or “Am I billing correctly?” It’s always empowering to watch people realize opportunities that had passed them by. One client owned a dance studio and suddenly decided that with her acting background, she could offer acting classes when lessons weren’t in session. It might cost her a few more dollars to keep the lights on, but there were two nights she didn’t have anything happening at the studio. Why not? That was two years ago. Now she has a former student who’s a successful actor teaching lessons. She has those two nights off and her business is still operating and earning money while she’s at home. She’s also creating a home study guide that she plans to sell on her website. Write down all income stream ideas and you’ll begin to see cracks where opportunities might exist.

3.  Keep your business books separate.

I’ve covered this territory enough that if you’re a frequent reader here, you’ve heard it before (but it’s so, so important I’ll write it again). Keep your business expenses and income separate from your personal information. At the very least open up a separate checking account. If you find that the business is beginning to bring in consistent revenue, find a capable CPA or business attorney to help you organize your business as an official separate entity.

While having an official “business” is good for liability and tax purposes, it’s also wonderful psychologically. A separate business checkbook and financial statement tells you and everyone around you that you take your brand seriously. Now it isn’t something you “hope to do in the future.” You’re no longer an “aspiring” anything. You’re now the real deal.

4. Automate everything.

You should automate every piece of your financial life that can be automatically handled. You don’t have time to worry about every tiny step. Your brain as the business owner should be squarely on two topics:

• How do you keep the lights on tomorrow?
• Where is additional revenue going to come from?

Does this sound mercenary? It might seem like it at first….I’m sure this quest for money probably isn’t what attracted you into your art in the first place. The sad truth about any serious artist is that there is an economic component of success. The more quickly you’re able to automate inconsequential activities and focus on the big picture, the faster you’ll grow.

This doesn’t mean that you no longer donate your artistic talents to organizations that deserve them. On the contrary, you should donate regularly. Not only is it spiritually fulfilling, but it’s good business. Dig inside any profitable company and you’ll find they’re donating time, services and products as much as possible. Why? It’s the easiest way to advertise. Just remember…your goal in “giving away the product” is to find additional ways to increase revenue. Make sure as you’re gifting your product that everyone knows that you’re also looking for business opportunities.

5. Get help.

Most of us aren’t skilled in this area (that’s why I’m glad you’re here reading!). Seek some advice from a business resource, such as (among others) the Small Business Administration, Fast Company, or Entrepreneur Magazine.  All of these sites have excellent resources and tools to help steer you in the right direction when it comes to asking the right business related questions.

Don’t let fear of the unknown get in the way of treating your craft as a business.  This is an exciting, challenging, yet rewarding opportunity!

You may know the feeling: You’re at the bookstore and spy a wonderful new reference book that’ll help with your art….or you’re at the clothing store to pick out an outfit for an audition, and the perfect fit is just outside of your price range.

What’s a little credit card debt, right? You’ll be able to pay it off later. Hopefully.

Whether you took on debt by overspending on your craft, or your job doesn’t pay enough, debt is a weight that’s hard to relieve. That said, getting rid of debt is the first step when creating the Abundance Bound mentality. According to financial site NerdWallet, the average household in the U.S. carries $15,422 in debt. Ouch. More meaningful is the fact that once people have debt, they’re likely to use credit more and more often. The flip side? 53.3% of the American population carries no debt at all.

We can’t solve the American debt problem, but we certainly can help add you to the 53% without debt, can’t we? How should you pay it down?

Much has been made in the financial press lately about how you should attack your debt. Researchers recently concluded that often what people think of as the smartest option hasn’t been the most effective way to pay down debt. Let’s look at two popular methods and review why you might want to choose the sub-optimal method to pay down your debt.

The Mathematically Sound Method To Pay Debt

If you want to take the fastest path to debt relief, and can stay on it, here’s the obvious solution:

-       List all of your debt in order of interest rate.

-       Eliminate the debt with the highest interest rate first and work down.

-       As you pay off a debt, add the payment amount to the sum you’re using to pay down the next-highest interest rate loan.

That’s it. Interest, when it works for you, is a wonderful component of financial abundance. But when it’s applied against you, debt is a friction that you won’t soon be able to alleviate.

The Sub-Optimal But More Often Effective Method

-       List all of your debts according to balance.

-       Begin with the smallest balance and work up toward larger balances.

-       As soon as you pay off a loan, apply the amount of the paid debt’s payment to the sum you’re putting toward the next-smallest loan.

This method, popularized by financial guru Dave Ramsey, is often referred to as the “Snowball Method.” Every time you pay off a debt, you add that payment amount to the sum you’re applying toward the next card, so like a snowball, you’re picking up steam as you handle bigger and bigger debts.

Why Does It Work?

However, recent research has shown that the reason you’re more likely to pay down debt using this method isn’t because of the actual snowball. It’s because people perform better when they experience small wins along the way. People will stay on track if they have some wins.

This isn’t only true for debt. Video game manufacturers in recent years have added “achievements” to games, which are small awards players win as they tackle milestones during the game. This helps players continue to stick with the game over time. It seems that small wins help us along the path.

Do We Need to Follow a Sub-Optimal Path To Debt Relief?

If you need wins along the route, the debt snowball is a fine method. Sure, you’ll pay more in interest, but you’re more likely to pay down the debt.

Here are a couple other ways to pay down debt more optimally:

-       Use free online resources such as Payoff.com or ReadyForZero. These sites turn debt relief into a visual experience and add milestones along your path to debt relief.  (downside: if you don’t log into the site or pay attention to the alerts, you won’t pay down your debt quickly.)

-       Reward yourself at milestones along the path. Instead of relying on the “wins” associated with paying off little credit cards, how about treating yourself to something nice when you reach 20%, 40%, 60% and 80% paid? Keep a log of your progress to make sure you keep your reward. (downside: you’ll spend extra money on these treats, which will slow down your debt repayment.)

-       Use habit forming tools such as Lift (iPhone and Android app) to check in every day that you’ve stuck to your debt repayment strategy. After 30 days you should have a new habit: getting out of debt.

-       Read voraciously about ways to save money. Frugal blogs on the internet, books, your favorite websites (like AbundanceBound!) will help you. Remember: you are what you think about!

The Takeaway

No matter which method you use to tackle debt, here are the important points:

-       Adopt a cash lifestyle today. Put away the credit cards and stop using someone else’s money to fund your goals. This creates nightmares, not dreams.

-       Begin your debt repayment strategy now and stick to it.

-       If you fall off the wagon, jump back on. Beating yourself up won’t help as much as continuing to build good habits each day.

Go pay down some debt! Once you’re over that hurdle, the freedom you’ll feel will allow you to travel much faster along the road to all your dreams.