Money Management For Creatives

Lots of writers avoid thinking about money management. This can cause lots of stress, pain and suffering.

Enter Emily Chase Smith, former bankruptcy attorney and financial business coach. I met her at a conference and was impressed by her down-to-earth style.  She has worked with lots of self-employed clients who have faced bankruptcy and other financial messes.

Emily nerds out helping business owners make financially savvy decisions as they start and grow their businesses. Because most writers and creative people could use some help with money management, I asked her some questions.

Money Management Strategy

Q: Money is a topic that makes a lot of people uncomfortable. Can you talk about that and how to deal with feeling more comfortable handling money matters?

ECS: Boy do people get uncomfortable talking about money. A study shows that most people would rather talk about their sex life than money.

Money, especially as it relates to self-employment, is a scary topic for a few reasons:

  • It was something you probably weren’t taught in school. You had to learn polynomial equations and dissect a frog, but the most you were taught about money in school was how to balance a checkbook.
  • You don’t become a writer because you’re dying to spend quality time with spreadsheets. Businesses are started because the owner has a passion for the business. Writers want to write. But that means the money side can be an afterthought and trail behind like a piece of toilet paper your shoe picks up.

Q: How did you get interested in helping people become successful entrepreneurs?

ECS: I’m the quintessential ER doctor who warns you over dinner to be sure your kiddo wears her helmet while skateboarding. I’ve seen the fallout of leaving the money piece of your business to “take care of itself.”

It’s not just big business that needs to be financially savvy; it’s even more important for small businesses and freelancers. If Donald Trump wastes $10,000, it’s pocket change – not so for small businesses. Every decision and every transaction is magnified when you’re small.

Q: What are some things that self-employed people should keep in mind when making financial decisions?

ECS: The biggest frustration for most freelancers/business owners is cash flow. The money comes in and goes out in an unpredictable way. That uncertainty can sap your creativity. When you bring a strategy for money management to the table, all of the sudden you’re more relaxed, more certain, and you can do your best work.

The financial system should run in the background. You need a system that’s just like brushing your teeth, something you do regularly that is complex enough to matter and simple enough so you’ll actually do it.

There are a few important pieces:

  1. Having information. You need to have an accounting system that gives you the right information.
  2. Digging into the information. You need to spend time looking at the numbers and seeing what story they tell you. What direction is the income heading? What are you doing that’s working well, what’s not? It’s amazing what you see when you’re looking.
  3. Acting on what you learn. Make money management decisions to guide your business and career – a coach can help with this, especially in the beginning.

Q: What are the most common money management mistakes you see creative people making?

ECS: I speak to a lot of groups, and there’s a ratio between how creative the group is and their perception of how much aptitude they have financially. The more creative the group is, the less aptitude they think they have. With an especially creative group, it’s important for me to establish that financial savvy is important. Then, I need to convince the audience that money management skills are within their reach. It’s not the complex stuff of CPAs and bookkeepers – money management is a skill you can easily learn.

Q: Sometimes people have invested a lot in a project, and it doesn’t succeed. What are the criteria for filing for bankruptcy?

ECS: Bankruptcy is like a root canal. It’s painful, but when you need it nothing else will do. Its main function is to clear up debt to allow a fresh start. If you’re overwhelmed financially, it’s a good time to  get a consult with a bankruptcy attorney (consults are usually free) and see what it would look like in your case.

Especially important is to know what you would be able to keep. That varies in different states. For example, in California you can keep a significant amount of retirement funds. That means you don’t want to use retirement funds to continue paying on debt you can get rid of in bankruptcy. If you know the parameters of a bankruptcy in your case, you can make a wise decision on when and if it’s a good solution for you.

Q: Let’s talk about the good times. Suppose a writer sells a spec script for half a million dollars and this is the first time they’ve had this level of money. What are the first things they should they do?

ECS: First, celebrate!

Then, realize that you have just entered the land of lotto winners and that usually has a bad financial ending.

The great news is that the difference between the lotto winner and the writer is that the writer worked for their cash. That means they can develop the money management skills to handle it well and make this sale the best thing that happened to them financially (rather than the worst).

To the writer I say – get thee some financial education right away! Don’t talk to people who stand to benefit if you let them manage your money. Get advice from people you pay to educate you.

Q: What is your advice for how frequently people should be looking at their net worth, income, expenses, and other money management figures?

ECS: For a freelancer who has systems in place and is doing well, checking monthly is likely enough. For someone running a small business and developing those systems, you need to be on top of the financial piece on a weekly basis.

Q: If you had one piece of advice for someone who wanted to be more financially savvy, what would it be?

ECS: Believe in your ability to learn money management skills. You didn’t get to this position by luck, but by hard work and savvy in many other areas. Take that great brain of yours and learn financial principles that will help you drive your business and freelancing forward – those money management skills will serve you for many years no matter what path you take.

The Financially Savvy Entrepreneur by Emily Chase Smith

Emily Chase Smith’s first book The Financially Savvy Entrepreneur: Navigate the Money Maze of Running a Business was just published.  She also hosts Money Morsels: Small Bites of Wisdom for Entrepreneurs and can be found at

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Discussion About Money Management For Creatives

  1. David

    I’ve been working as a freelance Cam Op and Editor since graduating in 2011. I was talking to my roommate this morning and said, “You know, being freelance is great cause it gives me the opportunity to write almost everyday, but there comes a point when writing just isn’t possible because all I can think about is money.”

    Then you sent me this post, Stephanie. Thanks for the sound advice, ECS! You’re absolutely right. In college I was forced to take classes like “The History of the Russian Orthodox Church,” instead of learning to pay my taxes. Then they wonder why you’re not paying your student loans back on time. Ridiculous.

    Thanks for posting, Stephanie!

    • Stephanie Palmer

      Thanks, David!

    • Emily Chase Smith

      That may be one of my favorite lines – “there comes a point when writing just isn’t possible because all I can think about is money.” That is so true in any industry, but particularly in creative ones. You need that creative juice to create stuff, not have it sapped away by money worry.

  2. Dianne Greenlay

    What a well laid out interview! I am a Canadian writer so the financial laws are a bit different, but the universal truths behind money management and it’s effect on us is the same no matter where one lives. I am self-employed in my day job, so I am used to the unknown, inconsistent ebb and flow of cash that also happens with my writing, but being familiar with it doesn’t ease the tension that can arise. This posting has good solid advice. Thanks Emily, and Stephanie!

  3. Melanie McDonald

    What an interesting, practical post, and her new book sounds informative and useful as well – thank you, Stephanie!

  4. Julie

    This is why some of the most successful artists throughout history all had patrons.