Continuing the series of republishing the old Art Calendar articles with updated commentary here is the 5th one looking at the power of a wall chart and some things that flow from this. Though I didn’t specifically note it in the original article, leaving it as implied from previous articles, I feel like I should give credit again to the book “Your Money or Your Life” that introduced me to some of these concepts and which goes into further details about them.
As an unrelated side note to those reading this blog post shortly after it is published in late February of 2020 you may have noticed that links to my davidhuang.org site just take you to a holding page. The software platform this site was running on had gotten so old, unsupported, and out of date I had to finally let it go, along with all the info built up there over the years. It was a sad day. I’ve now transferred the hosting of the site and will be rebuilding it at some point soon in WordPress. Though it won’t be nearly as comprehensive with information to begin with. Hopefully it will get built up bigger and better over time. With that, let’s get into the article on wall charts!
(Please note some of the links in this blog post are affiliate links. What this means is that should you click through them and make a qualifying purchase I will receive a commission which I’d certainly appreciate since it helps support this blog project. However, this shouldn’t increase your cost any, and certainly don’t ever feel like I’m pressuring you to buy things through the links I offer here or anywhere else. I’m all about being frugal first!)
5 Wall Charts, Savings Buffers, and Knowing When to Quit the Day Job
Last time I wrote about the monthly practice of tracking and evaluating your income and expenses. This month I wanted to write about some things I do that follow from this information.
First is a really simple exercise to graphically give you a bigger picture. Using a piece of graph paper I maintain a wall chart depicting my income and expenses. It’s really easy to do and hardly takes any time. On the vertical column I mark off dollar amounts. I’ve been having one square of the graph paper represent $200. Then in the horizontal line I have the months.
You are probably thinking, “Graph paper?! Really? Why not just do it on the computer?” It could probably be done with a computer fairly easily today, perhaps with the benefit of added features. However, I do still like the idea of this being a physical object you can place prominently in your home where you will see it daily for the reasons I will write about below.
Every month after doing the exercise I spoke of last time I go to my wall chart and record my total figures for the month. For my total expenses I make a blue dot where it falls on the dollar scale. For the total income I make a black dot. I use the different colors so I can readily distinguish the two from each other. Then I draw lines connecting these new dots to the corresponding dots from the previous month. What I end up with are two different colored lines showing the long-term changes in my financial picture.
One final part of this exercise is to hang it up somewhere so you will see it everyday. For me it’s tacked to the wall at the end of my bed, thus it’s often the first thing I see in the morning. That’s it. That is the entire exercise, like I said very simple and quick.
Don’t let the simplicity of this fool you into thinking its of little value. When changes in your life affect your financial picture this becomes graphically visible. I can tell at a glance when I graduated from college, when I was working a day job, and when I became a full-time artist. However, the most valuable part of this chart is motivation. By keeping it visible in your life everyday it provides a constant reminder to pay attention to your finances. For me it has become a constant game each month to keep the income line above the expense line. When I have expenses that can wait I’ll try and hold them until a month I know I’m bring a lot in. Basically this chart quietly but insistently keeps my financial goals in the forefront of my mind. I don’t ever lapse into a mindless spending spree because of this daily reminder.
This quiet daily reminder aspect is the same reason I recommended tracking expenses on a slip of paper in the previous post. It really is a powerful thing!
Oh yeah, when you make the wall chart be sure that vertical column of dollar amounts goes WAY higher than you think you’ll ever need. An interesting feature of this exercise is that, along with your income and expenses, the top dollar figure stays in your sight too. As the chart shows it to you daily in relation to your income this top dollar amount ends up becoming a goal, or even an expectation. Once we believe it is possible to attain something we seem to attain it. When I began doing this I set my top dollar figure about 4 times higher than I expected to be at. My expectations changed, my income rose, and I ended up taping an extra sheet to the top of the chart! I’m on my second wall chart now and I believe I will blow off the top of that one too before it’s done. It’s truly an amazing thing.
For quite a while I kept thinking the lines on my wall chart would even out. I wanted to see the income line forming a steady upward slope, and have the expense line flatten out at some reasonable level. The closest I have ever been to achieving this was while I was working a regular job for my primary source of income. As a self-employed artist my chart has maintained peaks and valleys that put all the Earth’s mountain ranges to shame! I used to think I was doing something wrong, but I’ve since realized the chart is simply pointing out the truth to me. As an artist I will have to deal with huge month-to-month changes in income and to a lesser degree, expenses.
With years more data behind me now I can still say confidently that my income can fluctuate wildly down and (thankfully) up too. This is simply the reality of life as a studio artist from what I’ve seen.
This leads me to the next issue arising from the information gleaned by monthly tracking of finances, keeping a 6-month buffer. After you’ve been tracking your money for a while you can get a pretty good idea of your average cost of living for a month. Multiply that figure by 6 and keep this much in savings at all times. My first long-range financial goal was to build this cushion against hard times and the simple reality of my sporadic art income.
Though I have rarely had to dip into this buffer it has provided me great peace of mind. I once had a month where the sum total of my income was 100 bucks! If I didn’t have that savings I would have had to frantically look for another job. However, because I did have the money I just grumbled and moaned as I continued to make art in my studio. Also while I never know exactly where the money is going to come from each month, the long-term chart reassures me that it does keep coming in and the occasional poor month is normal. Having this substantial sum of money on hand allows artists to ride out the times when sales are down with little discomfort.
My worst month has since dropped down to a mere $11. Ouch! Still the cash buffer made it easy and painless to ride this month out. Thankfully there aren’t too many months like this anymore. In fact since I’ve gotten into investing with the money saved by minding the gap the interest I reliably bring in each month keeps my income from ever getting so low. In fact, I’ve found ways to generate reasonable interest income from the semi liquid emergency fund I now keep on hand which I wrote about in this past blog post.
It’s also a secure feeling to know you can easily deal with most major, unexpected expenses. If my car were to give it up tomorrow I wouldn’t be happy, but I could go out and buy another with cash (and I will only buy cars with cash, never with a loan). A few years ago I had a furnace installed in my studio, finally making it comfortable to work in during the winter. Then two weeks later the furnace in my home broke down for good. Before I had a 6-month buffer this situation would have been a major crises. I might have been living in my tiny studio for a while, as it would be my only heated space. Instead I utilized my savings, had the furnace replaced, and worked to rebuild the account. There was no need to do without, borrow money from a bank, or worse yet purchase the new furnace with a credit card. For me, this buffer is an enormous reducer of stress, and less stress gives me a more fulfilling life as an artist.
Pointless side note, I have long since moved from that studio I had put a furnace in to my “hobbit” hole earth sheltered studio. I actually don’t heat the new studio and just use a space heater when I really need some extra heat. Though I have also shifted the fine finger work to another work space set up inside my heated home where I can work comfortably in the winter months without needing to heat an additional space. This just seems like a more efficient arrangement with regard to the 3E’s.
There’s one final thing I gained from knowing concrete figures for my income and expenses that I want to share here. It was no longer a mystery of when I could quit the day job and begin making art full-time. It was also not a terribly risky move. I had the numbers all laid out for me. I knew how much I was making from the sale of my art. I knew how much it cost me to live each month. I simply had to see my art sales equaling my expenses, then with a six-month buffer in the bank I could confidently put in my notice of resignation.
This is just part of the power of tracking your finances!
Ok, I admit I wasn’t really all that confident. Making art for my living was a dream come true and I kept expecting some unforeseen, harsh reality to wake me up from that dream. I comforted myself with the knowledge that I left my former employer happy enough that I would be readily hired back if needed. However, month after month I was able to pay all expenses and my savings account wasn’t dropping. Eventually it sunk in that this was really working!
You can make it work for you too!
For the final update comments on this article I must note that I did stop doing the wall chart several years back. I had reached the end of the paper chart I had made and just decided to not tack on yet another sheet and continue further. At the time it seemed like I had gotten all the useful power from the exercise I was going to get.
Even prior to rereading this article in order to do this updated post though I have been thinking about reviving the practice of the wall chart. In the “Your Money or Your Life” book the section about this had discussed adding a 3rd line to the chart that tracked ones monthly income from investments. I’m thinking now that I am seriously pursuing this investment piece of the program I should have a chart to visually track this. It would then clearly reveal to me when I’m getting to where investment income is exceeding my expenses, thus providing the data and confidence to know when I am financially independent and could retire if I so chose. I suspect the daily viewing of the chart would work it’s magic helping to inspire me to increase my investment income just as it previously helped me to believe in greater possible monthly income levels.
Studio Snippet
I’ve been delinquent in getting this blog post published because I’ve been working hard in the studio lately to both finish up the sets of chasing tools I wrote about in the last studio snippet and also getting a new batch of vessels finished up. So for today’s snippet I thought I’d just share a few of the new vessels.
Most of the vessels in this new batch of 17 pieces were simpler ones in the Luminosity series. These pieces are like canvases for me to play with patinas. Part of what I love about copper is the wide range of colors I can develop on it through the patina process.
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