Living the creative life is one filled with riches but rarely of the financial kind. Making it work often requires a financial leap of faith and hoping for the best.
Circus Oz unicyclist and trapeze artist Kyle Raftery thinks that’s all part of the fun.
“Life is more exciting without assurance,” he says. The 32 year-old Melburnian has been embracing that heady feeling since graduating from the National Institute of Circus Arts in 2005. As an independent performer he’s done festival gigs, stints on cruise ships, and worked the corporate Christmas party circuit. He’s also developed his own shows through the Little Red Trapeze Company and Two Up Circus.
There’s been times when he’s had to dig deep. To buy a $8500 inflatable mat for the Little Red Trapeze Company, his agent got him a unicycling juggling gig “in the ‘burbs” where houses were being sold off the plan.
“I would go every weekend and just do the long slogs thinking: It’s OK, it’s another piece of that mat.”
Three years ago he and his partner, April Dawson, joined Circus Oz. “It’s a full-time job – salary, super – all that jazz,” he says. That financial safety net made a huge difference when Dawson needed a second knee reconstruction.
They were freelancing when she had her first one, says Raftery, adding: “I had to cancel a lot of our shows and go overseas for a couple of months to find some work and leave her at home to recover.”
Fortunately, he’s a firm believer in keeping multiple irons in the fire. “I think there’s a great security in having a fairly insecure job. If something happens to one job you’ve got other areas that you can turn to.”
Whether you’re a writer, artist, dancer, or musician, it’s a constant juggling act making a living out of your creative passion. Incomes are often low and sporadic while the cost of living is regular as clockwork.
In 2010 the Australia Council for the Arts released Artist Careers, two studies into the working lives of 44,000 professional artists. Their median annual income including both arts and non-arts income: $35,900.
Only 5 per cent of artists earned more than $100,000 and 16 per cent earned less than $10,000.
Despite the often precarious financial life lots of us are still opting for – as Grayson Perry puts it – the pretty little art career.
So how do you make it work?
Make a plan
When your income is unpredictable you have to flip the normal budgeting process. Instead of divvying up a pay packet, you work out how much you need to earn to cover your expenses, says Dominique Bergel-Grant, founder of Leapfrog Financial.
Having that income target is not only important when you’re living on the edge. It’s useful for the good years too. “[That extra money] should be put aside for the rainy day and for the years when there is a lot more uncertainty.”
Monica Davidson, founder of Creative Plus Business, says that approach shifts your focus towards the things you can control. “People try and exert an enormous amount of control over things that they will never have control over,” she says, such as government funding, grants and whether budget measures will pass the senate. “What we need to figure out is what we do have control over and then take responsibility for that.”
Bergel-Grant’s creative clients often micro-manage their budget, giving themselves a daily spending allowance. “So if they underspend for four days it means they can afford to go to that more expensive thing on Friday.”
They also keep accommodation costs affordable. Raftery and Dawson live in a share house with other circus performers; others desert the inner-city or capital cities altogether. The Artist Careers study shows 47 per cent of Australia’s writers were living in the regions in 2009, up from 26 per cent in 2002.
High chance of rain
Building a rainy day fund is one way to take control. Bergel-Grant says often creative people set aside money for a research trip or a residency. But it’s important to have an emergency fund and insurance to cover the unexpected in their personal life.
Raftery agrees, saying being paid in “chunks” as an independent performer made it easier to stash some “MC Hammer – Can’t Touch This” money into an online savings account.
The taxman can be your friend
Reducing your tax helps conserve your resources. Sydney accountant David Le Page offers this tip for creative people. “There’s a section in the Tax Act that allows them to run their practice – income from writing, art – at a loss and claim that loss against their salaried income as long as their salaried income is less than $40,000.”
Keep receipts and claim deductions where possible (see box). “Anything that you can normally claim against a business you can claim for an art business,” says Le Page.
However, the Tax Office wants to see that it is more than just a hobby, he warns, adding that might mean writing a business plan.
Longer-term tax effective ways of investing are also important. Consolidating multiple super accounts into one can save on fees and there are now tax deductions for anyone who contributes to super. On budget night, the government announced the Low Income Superannuation Tax Offset, a rebranded Labor-era scheme for people earning less than $37,000. This compensates low-income earners for the fact their average marginal tax rate is lower than the 15 per cent tax on super contributions.
Creative career enablers
While people might begrudge the “day job”, it means your creative pursuits are not burdened with paying your bills.
Others pay tribute to the spouse in full-time employment. The Artist Careers study showed just over half of the artists who live with a partner say their spouse’s income is important in supporting their artistic practice.
“As far as I’m concerned my husband is a hero,” says Pamela Freeman who is the author of 30 books including children’s books and speculative fiction. She is currently writing a historical novel. Publishing’s shrinking advances mean her most recent advance was on a par with the one she received for her first book 21 years ago.
“The saving grace is the PLR (public lending rights) and ELR (educational lending rights) payments – so typically you would get three or four payments a year but royalties only twice a year,” she says.
About 30 per cent of her income comes from writing, some from doing school visits for her children’s books, but the bulk of her income comes from her position as the director of creative writing at the Australian Writers’ Centre, a for-profit organisation.
Freeman bought her first property before becoming a full-time writer, but these days it’s her husband’s salary that pays the mortgage. They have also invested in positively-geared property, meaning their rental income exceeds the property’s interest and maintenance costs.
“When we have any extra money we stick it into the mortgage and we use that as an emergency fund,” she says.
Alternative sources of money
The likes of Etsy, Redbubble, Kickstarter, Indiegogo, Pozible, Patreon and Spotify mean government grants don’t have to be the only way to fund a creative career.
Pozible statistics show performance and music crowd-funding campaigns are most likely to get up, with success rates of 75 per cent and 71 per cent respectively.
Singer-songwriter Helen Perris has run three Pozible crowd-funding campaigns. Two were successful. The third campaign – to fund making an album – didn’t fly, which on Pozible means she didn’t get any of the money pledged. It’s a model she prefers.
“There are other platforms where if you don’t hit your goal you still get the money and that means then you are obligated to fill the rewards … and you may not actually be able to afford to fulfil those rewards,” she says.
Her plan B? She and her husband have now built a “Patreon-style” subscription service, Perrennials.
It’s pay-what-you-want, with supporters asked to pledge a minimum of $5 per month. Some, though, are happy to pledge $50 per month so Perris can continue writing and recording her music.
Think investment too. About 10 years ago Raftery started investing in shares. His “grand plan” was to make a living wage from his investments and to have a pool of money he could draw on so he wasn’t reliant on grants if he wanted to set up a circus in a small community.
Davidson steers creative clients towards commercially sustainable funding methods.
She thinks the “trendiness” of crowd-funding is passing. Instead, she keeps an eye on opportunities emerging via equity crowd-funding (where supporters take a stake in the business) and the Australian Cultural Fund, which offers tax deductibility to donors via Creative Partnerships Australia.
A no-interest loan can keep cashflow coming when you need it most. QuickstART is a microfinance loan scheme for individual artists, groups and creative practitioners. Loans of $1000 to $5000 can be taken out for between three months and a year and applicants generally get an answer within a week.
It might work for someone who has a public art commission and needs to buy materials before they get paid. Or Peter Pamment, microfinance adviser at Foresters, says groups might use one if they are putting on a performance and the electronic ticketing service doesn’t pay until after the performance.
Creative business
A lot of people see opportunities in running a creative business. But they can struggle if prices are set too low; they don’t pay enough attention to profit or cashflow; or if they find it difficult to chase unpaid invoices.
When you are immersed in a world where low earnings are the norm, it can make it hard to value your time and skills. Often creative people do a lot of volunteering and unpaid internships, too.
Davidson says being poor can have a knock-on effect: “If you’ve been poor for a period of time and you’re always shopping for price; you’re always looking for the cheapest toilet paper and the cheapest dog food and the cheapest night out it’s amazing to think that there might be people out there who are looking for more than just the cheapest.”
Perris runs a music teaching studio in Blacktown. She says: “I think a lot of artists look at the business income as their income, but it’s not.” Before anything goes into her pocket the business has to cover running costs (electricity; mortgage); piano maintenance; professional development; insurance; and teaching tools such as puppets.
When she set her prices in 2009, she took into account the Music Teachers’ Association of NSW recommended rates, the business costs, her 20 years of teaching experience and her high-level qualifications.
“Then I looked at what others were charging in the area and what I thought the market could actually bear,” she says.
A few years ago she decided it was time to raise her rates. “I did and I didn’t lose any students because of the increase,” she says.
Tax deductions for artists
Transport
If you use a vehicle to travel between jobs or to travel from one job to rehearsals you may be able to claim some motor vehicle expenses. A claim can also be made for carrying bulky equipment from your home to a place of work. Travelling from home to a fixed place of work or to auditions is not claimable.
Public transport fares can also be claimed.
If an allowance is not paid, the cost of travelling from place to place on a tour is claimable as is staying overnight on casual engagements.
Travel and meal allowances
If you are paid an allowance for travelling for work for fares, accommodation and meals they are usually deductible.
Clothing
Clothing and dry cleaning are deductible if they are used exclusively for a specific role. Specialist costumes such as a clown suit are deductible as are dancer’s tights and dancing pumps.
Self education/training
Specialised self-education courses such as NIDA are deductible as are coaching classes for acting, singing, dancing.
Hairdressing
Deductions are only allowed for the cost of a particular hairstyle for a specific role, if related to the earning of income.
Phone
The cost of work-related calls are deductible.
Professional journals and magazines
These are deductible if they are specifically related to performing artists.
Photographs
Maintaining a photographic portfolio is deductible but the initial cost of creating a portfolio is not.
Fitness expenses
Only if a high level of physical fitness is required to do your job. For example, a trapeze artist.
Makeup
Only deductible if used exclusively for a stage performance.
Attendance at theatre and film performances
Only if directly relevant to the income-earning activities of the performing artist. Attendance at social functions/first night events are not deductible.
Depreciation
Will be allowed on computers, televisions, video recorders and CD players where used in connection with work. But you have to keep a log over one month to establish the percentage of business and private use.
Union fees
Fully deductible, as are professional associations/memberships.
Agent’s commission
Fully deductible.
Source: David Le Page
Circus Oz’s new show TWENTYSIXTEEN will have a Big Top premiere in Melbourne from 15 June-10 July 2016 and then continue with a national tour.