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Question for Artists!

I realized, as my printer begged for an ink refill, that I really need to sit down and ensure that my artistic endeavors are paying for themselves. I made enough money in 2009 to cover the expenses I incurred in that year (more or less, I need to do better with that in 2010), but I haven't been keeping art money separate from personal and household monies, and I'm wondering if I should change that.

How do all of you that create as a significant part of your income do this? Do you have a separate account for your business, and just guestimate the operating costs each year, or do you mingle your proceeds with your personal monies and just keep track on paper?

I'm asking, because I feel uncomfortable going to roho (although he is incredibly supportive) with my hand out when I realize I need cash for art-related things, and I'm curious how the rest of you handle it.

Feedback is greatly appreciated! :)


( 7 comments — Leave a comment )
Feb. 24th, 2010 06:29 pm (UTC)
One easy way, if you use online banking, is to set up a second checking account and transfer proceeds from art into that one directly. Even if you get paid via paypal, just shuffle it over there once you receive payment. You can get a separate debit card connected to it for when you need to take money out, and unlike savings accounts, the low level checking accounts usually don't have a minimum balance or maximum number of transactions in a cycle.

If you're feeling really ballsy, you could use your paypal account for this... but since they're not FDIC insured and tend to be sorta questionable, I wouldn't recommend it. Still, you can use a paypal account like any other bank and I believe there are even debit cards for paypal accounts now. Paypal also has a pretty high interest rate, too.

When I wasn't sure if I'd have to escrow for my house or not, I was planning on doing the first one to make sure I had the money I need for taxes and insurance... but in the end, I got stuck escrowing anyway.
Feb. 24th, 2010 06:30 pm (UTC)
Most banks will allow multiple accounts access all under the same user-name, too, which makes managing them really easy...

Bank of America will even let you set up the account online. Or they used to, haven't done it in awhile.
Feb. 24th, 2010 06:36 pm (UTC)
Yeah, I really like our bank, but it is out of my way to get to (it's perfect for roho), and while it would be nice to be able to seamlessly transfer funds from ArtAccount to Personal/HouseholdAccounts, I'm not sure that's going to be the best solution.

Mostly I'm curious to see if other artists just stash their Art Income into a personal savings account, or if they use separate accounts.
Feb. 24th, 2010 06:38 pm (UTC)
I do end up mingling my monies, since I'm the sole proprietor and the only one any of the money belongs to (but I think technically you're supposed to keep all funds separate). I'm licensed and pay taxes as a small business (in addition to having a day job), so I HAVE to keep track of my income - and expenses if I want to have anything to write off at the end of the year.

I just keep an Excel spreadsheet of incoming and outgoing funds. Save all receipts and pay stubs for proof of income and expenses. I have two bank accounts, one with BofA for personal funds, and one with Chase for business - they offer free checking accounts for small businesses.
Feb. 24th, 2010 11:14 pm (UTC)
Chase is my first choice, I think. I am registered for a FEIN, and I pay sales taxes in two states, and my income tax in a third; since I do the convention circuit.

Thank you! I'm always intrigued and interested in the ways other people do business, as there's always something interesting to learn. :D
Feb. 24th, 2010 10:45 pm (UTC)
I have a separate checking out from which I manage my business stuff. I also buy personal stuff with it, but I keep track of which is which using a spreadsheet and my bank's online accounting tools. I also save receipts to help track the business vs. personal expenses.

I used to guesstimate operating costs a while back, but that's just asking for trouble. You almost never get a clear idea of how you're doing if you guess about it. Tracking it receipt-by-receipt is the only way to go.
Feb. 24th, 2010 11:15 pm (UTC)
Yeah, I know if I guestimate, I'm going to guess on the low side, no matter how high I try to put it. I think I am going to need to do just that, open a separate account.

Bleeergh. ;D
( 7 comments — Leave a comment )

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