Are You Thinking About Your Future? with Vanessa Joy
I entered the wedding industry at 20 years old. I remember going to my very first photography meetup. It was in the backroom at Peterpank Diner in South Amboy, New Jersey. There were 25 men and me. The industry has changed since then, but one thing that struck me was that a couple of the more seasoned professionals feared not being able to “do weddings when I’m 60.”
Weddings take a toll on your body. I’ve even made it a point to work on the longevity of my body (more on that at yogaforphotographers.com). How many of us have disability insurance in case we’re injured and can’t work for a while? I don’t. It’s crazy expensive.
I was recently ridiculed for using the term minimum wage. A stupid troll thought I was saying that people should be paid less than a living wage. It wasn’t what I was saying at all, but it did get me to start thinking. How many full-time photographers aren’t paying themselves a living wage?
In the wedding world, especially, it’s easy to think we’re making a ton of money because we take in a lot of money. The problem is that we need to spend it elsewhere. When was the last time you looked at your cost of sales, cost of business and how much time you spend? We end up making a lot less than we think we do, and there’s no way we’ve set ourselves up for the future. It almost makes you wish you had that 9-to-5 and 401k. (To see how I break down my pricing and packaging, download my free pricing video at breatheyourpassion.com/money.)
You may run your numbers and think, “I’m doing pretty good.” But look at how much you make per year (after expenses) and divide it by how many hours you worked to get it. Are you making a living wage or minimum wage?
A living wage allows you to save for retirement, and a lot of us fall short there. Photography is a tough business. It’s stressful, long hours, lots of equipment expenses, physically strenuous. Are you prepared to retire one day? Or are you hoping to have a second career?
Saving for retirement is no easy task. It takes a serious amount of planning and diligence over a long period of time. Dave Ramsey (I’m a huge fan of this financial guy) suggests that we save 15% of our income for retirement every year. That seems like a huge number when you’re currently saving 0%. But an even bigger number is the amount of money you need to have in your retirement fund to retire.
Chris Hogan, a colleague of Dave Ramsey’s and the author of Everyday Millionniares, says: “Retirement isn’t an age, it’s a number.” Do you want to see what your number is? Take his Retirement IQ quiz at chrishogan360.com/riq.
Shocked? I sure was. Depressed? Yup. I didn’t want this article to be all doom and gloom, but I did want to light a fire under your ass. No one talks about this, maybe because we love what we do so much that we can’t picture ever not doing it. I’m with you there. But that doesn’t mean that one day you won’t want to travel more, work a little less and spend most of your time with the people you love rather than the people who pay you.
The best part of all of this is that you have control. You own your own business. You can immediately make adjustments to start cutting spending and increasing income so you can start down the retirement track, even if you’re just starting out. It’s never too late—or early—to start.
I’ve found a lot of answers to business and personal finances in two books by Dave Ramsey: Entreleadership: 20 Years of Practical Business Wisdom From the Trenches and The Total Money Makeover. I use tons of his advice in my business and in my home life. You may or may not like him, but the advice is solid. Another favorite is Jordan Page. She has a great YouTube channel full of advice on budgeting and getting out of debt and why you need seven bank accounts (well, not me, but she does have a point).
Most financial to-do’s are the same in business as in life. I follow Dave Ramsey’s principles because they work for me and for a lot of people. But they’re not for everyone, and some investors would even tell you they’re completely backwards. I know that finance has to do with math, but it has more to do with behavior than anything else. Here are the basic principles I live by in business and life.
- Know your numbers. There’s no excuse for not knowing how much money you have, will have and will have to pay out. If you don’t have the means to figure it out yourself in Quickbooks or 17Hats, hire a bookkeeper in addition to your accountant (sometimes they’re the same person).
- Never go into debt—for anything. I’ve made it a habit of thinking about my purchases in terms of whole numbers. If I want to buy a $1,000 lens, I want to pay $1,000. Not $1,235 after I’m done with interest when I forget to (or just don’t) pay it off in the six-months same-as-cash deal. Paying more than necessary for things is a quick way to lose in your financial life. I pay for equipment, staff and even cars based on what I can afford. If I want something bigger and better, I wait until I’ve saved up the money.
- Plan for the unknown. This may sound morbid, but plan for things like injury and death. I have three to six months of expenses saved up in case of an emergency. The last thing you want to do while your boat is sinking is to pour more water into it by going into debt (I think that’s a Dave Ramsey metaphor). If you have people who depend on you, get term life insurance that’s five to 10 times your salary. You never know, and it’s better to leave a blessing behind than a burden.
If you don’t feel like doing a ton of research to get your financial house in order, no worries. Check out the video for this article, in which I outline the first steps to take to financial freedom. You’ll be hitting your goals in no time and saying goodbye to financial stress and the thought of being forced to work until you die—unless you’re Sal or me, and look forward to that kind of thing.