All artists should have a numerical value that represents the cost of their time that they use as a benchmark to assess how much they should be paid and as a clear signal for when they are selling themselves short. Remember – you are a skilled professional who deserves to be paid well for your work.
On Thursday December 15, choreographer Andrew Simonet will be leading “Real World Budgeting,” a comprehensive, artist-led webinar that focuses on the practical skills and knowledge artists need to change their relationship with their finances.
First on the agenda – knowing how much your time is worth.
How to Calculate the Cost of Your Time
Write down how much money you need to live for a year without financial panic. (This is not your “crazy-rich” income, but rather, what it costs to comfortably live your life right now.)
It can be helpful to look at the previous year’s tax returns and start with whatever number is listed as your “gross income”
Add to that number by reflecting on if there were any points in the year where you were particularly strapped. It’s also a good idea to add money to cover health insurance, paying down debt, adding to savings, and time off (yes, artists should budget for time off).
Divide that number by 1500 to calculate your hourly rate.
Your hourly rate x 8 = day rate
Your day rate x 5 = week rate
- I discover that I need $45,000 a year to live without financial panic. (After taxes that is around $36,000 a year, or $3,000 a month.)
- 45,000/1500 = $30/hour
- $30/hour x 8 = $240/day
- $240/day x 5 = $1,200/week
Whatever number you calculate, keep in mind that it is an internal number – you can ask for more and you can work for less. For example, if you decide to donate your time or subsidize your costs for one project, that’s fine as long as your average earnings keep you around your target yearly salary. Ideally, if you can earn your target number in roughly 1500 hours your practice should start to feel sustainable, and any time you used to spend worrying about money can instead be focused on your work.
For more insights into achieving financial freedom as an artist, including learning how to leverage the cost of your time in negotiations, be sure to register today for “Real Life Budgeting” with Andrew Simonet on Thursday December 15, 2016.