Artist Annual Income

Dear Friend in Finance,

I'm an actor. I never know when I'm going to land my next gig, so I have no idea what my income is going to be or when it's even coming. People talk about their annual salary or annual income like it's a straightforward number they can rely on, but that doesn't have anything to do with me, right? How am I supposed to make a financial plan when my income is all over the place?

Sincerely,

Paid in Exposure

Dear Paid in Exposure,

That's a common frustration that many artists and gig workers have regarding their income. When you interact with financial institutions, they'll ask you what your annual income is—how are you supposed to answer them?

When we're living with the constant stress of wondering where our next paycheck is going to come from, it's easy to lose sight of the forest for the trees. Our minds focus on the stressful, on the areas of lack, as a survival mechanism. So when we have that uncertainty, we focus on that feeling.

But here's the thing: You have found and earned income in each of these situations before. And you will do so again.

The end result is that, on an annual basis, your income is actually a lot more steady than you would expect!

Not only is it possible to find a good estimate for your annual income, but it's also incredibly important for your financial health.

Why does estimating your income matter so much?

Because living under the belief that income is uncertain is incredibly stressful. Stress releases hormones that lead to poor decision-making, which then leads to poor financial decisions, perpetuating the cycle of stress. Finding any sense of certainty you can is essential to making better financial decisions.

Not only that, but once you can estimate your annual income, you can start to plan ("I need to save $X dollars now while I have a lot of income, because I won't have that income later"). And once you have a plan, you are empowered to direct your financial future.

How do you find that certainty?

Start by looking at your historical income. If you’ve filed taxes in previous years, those documents hold valuable clues. Your “Total Income” figure on your tax return is a fantastic starting point. You can even access previous tax years online via the IRS website if you need to check.

Most people find that their income, despite its ups and downs, tends to average out over time. From there, you can make adjustments based on what you know about the year ahead. Maybe you have more contracts lined up than usual, or maybe you’re experimenting with a new revenue stream like coaching or a side business.

Once you have that estimate, you can use it to plan your budget, manage savings, and even set realistic goals for retirement contributions or debt payments. It also gives you a number to provide to financial institutions when they ask for your annual income.

And remember, it's just an estimate. No one expects you to predict the future perfectly. The point is to get close enough to make informed decisions, not to achieve pinpoint accuracy.

One quote that helps me with this is Jeff Goldblum in Jurassic Park, saying, "Life, uh, finds a way." Life is clever, determined, and persistent—and artists are those things, too! Artists find a way. You, specifically, have found a way, and you will find a way again.

With a little planning, you can take the guesswork out of your finances and start building toward something even more resilient and powerful.

Sincerely,

Your Friend in Finance