The ongoing situation with COVID-19 is affecting a number of creative sectors. One area which is struggling at the moment is the film industry, with high-budget productions such as the upcoming James Bond film No Time To Die pushed back.
We spoke to some recent SAE Film grads and other freelancers about the way the coronavirus pandemic has affected their work, and also got some advice from them about covering yourself financially for unexpected scenarios like this.
Keep your business and personal expenses separate
We spoke to SAE Film grad Ben Eeley, who had been planning to move out to London but has put his move on hold for the time being. Ben said he has one more job on Saturday, and all the rest have been cancelled. He was saving for a new Steadicam, but now he is using these funds to cover his costs until his work resumes. Ben’s advice to creatives thinking about freelancing is to have a business account and a personal account, as this makes it easier to pay your taxes and keep a track of what money you have coming in. He pays himself from his business account each month, and always makes sure he has enough to cover his bills for a couple of months.
Live within your means
Fellow SAE Film alumnus, Jason Farries, has been similarly hit by the effect of coronavirus on the film and acting industries. But Jason and Ben both believe there are things that you can do to prepare yourself for a worst-case scenario like the one we are currently in. Many people will be aware that the life of a freelancer is often a case of feast/famine anyway - with some really busy months and some really slow months. Choosing to be freelance comes with a huge number of bonuses including getting to choose the projects you work on, and being your own boss - but you also need to be very good at managing your personal finances to stay afloat when things are quiet. Jason said: “As with any freelance career, there are slow months and there are busy months. From my experience I have always tried to spend money wisely and be mindful of my income, you never know where your next paycheck will come from so it’s important to always restrict your spending and buy essentials before luxuries. At the start of my career, I needed a lot more financial assistance, but slowly the income started to match, and then gradually overtake, my expenses.”
Set up an emergency fund - you’ll thank yourself later
One way that freelancers can float themselves during times of hardship is by having an emergency fund. It doesn’t matter if you can only put a little bit aside each month, it is a good practice to get into at the start of your career and may well help you out of a pinch. Jason said: “I have a very small amount of money put aside for emergencies, it’s only been in recent months that I've been able to consistently top up this account. It is only a savings ISA but a few months ago I set up a direct debit to put away a small amount each month. Putting away a percentage of each job is a very good suggestion, it’s a bit like you’re setting aside an agents fee which most actors/freelancers have to pay anyway, but instead of paying it to an agent you’re paying it back to yourself and can even reinvest it in your career (assuming no global pandemics!).”
Investigate other ways to bring in money
There are also other forms of income and financial support which freelancers can use if they are struggling. Jason said: “It took me far too long to look into alternative income sources and financial support. The one thing that will really make the difference when starting out is having a very basic consistent income to cover your essential expenses. You never want to miss out on work because you can’t afford a train ticket, or you haven’t paid your phone bill, something silly like that. Be money smart and look at your monthly expenses, is there anything you don’t need to pay for? Can you live without Spotify Premium? Can you do more home cooking rather than getting lots of takeaways? Once you’ve minimized your outgoings, figure out how much those essentials cost each month and then make sure you find a job or source of income that covers those expenses. Once you have that sorted, all your freelance work will be profitable income and you will find yourself less limited by your finances.”
Diversify your skill-set and work in different areas
Additionally, having multiple streams of income can help you if you find yourself in a quiet patch. If you are a filmmaker, perhaps you are also good at graphic design. Take one-off jobs, ask your friends on social media whether they want any work doing - perhaps you know an Audio student who would like some artwork designed for their next release? Jason said: “Do not rely on a single income source, look for multiple sources of income. That way if one fails you have a backup. Also, there are sometimes financial support schemes from the government to help self-employed people and support their income. Look into Universal Credit and talk to an advisor to see what you’re entitled to. And finally, make savings. Even small savings. Put £10 a month into a savings account, that way after a year you have £120. It isn’t much, but when you have nothing else you will be grateful for that £120. If you can put away more, put away more. A night out with your mates can cost anywhere between £20 and £100. Imagine if you skipped one night out a month and put what you would've spent into a savings account. It sounds simple enough, but most people just don't do it, and with the online banking resources we have today, it takes no time at all and there’s no excuse not to.”
Check your finances regularly
One habit that can help you to be more aware of your personal finances is to check your bank accounts daily - use your provider’s own banking apps, and consider using a tool such as MoneyDashboard where you can view all your accounts at once, set yourself budgets and see where you are overspending. Jason said: “I have all of my banking apps on my phone so that I can check my finances at the touch of a button. If you look at your accounts every day you will automatically be more money conscious and hesitate before you make a purchase and consider if it’s a necessary one.”
Content Marketer Emma Saldanha said: “Since I started freelancing three years ago, I’ve been setting aside 40% of income (30% for tax & 10% as savings) each month. I review my expenditure each quarter to see what I’m spending on and look to find cheaper alternatives. For example, I was having a monthly face-to-face meeting with a client in London, and considering travel costs and time lost getting to the meeting, it was adding up. So we switched to Zoom meetings instead, which works great for both of us.”
But you don’t have to manage your finances independently. For a lot of people, figuring out how to pay tax as a freelancer can induce a headache. Investing some money in getting an accountant may be worthwhile - not only does it save you time, but it can also save you the stress of being hit by a letter from HMRC saying that you owe lots of money you didn’t account for. Ben is lucky enough to have a friend who is an accountant who does this for him, whereas Jason does all of his own taxes. Jason said: “I think it is a good idea to get an accountant if you can find one. Their knowledge and experience means they can save you money, avoid over or underpaying taxes and help you write off expenses you might not have known about. However, you can save yourself some money doing it yourself, just make sure you do a bit of research on google and be prepared to swim through months of transactions to identify all of your income and outgoings. I usually have to set aside an entire day to do my taxes, but you should never neglect the business aspect of your occupation.”
Hopefully you’ve found this advice useful, and if you have any other freelance money tips please tweet us @SAEInstituteUK!