Artists in Canada do not make a lot of money from their art. And dancers are among the lowest earning artists. It is therefore a truism that saving money is difficult for most dance artists. Yet, while saving (and getting out of debt) can seem like unachievable tasks, they are worth some serious consideration. What should dance artists know about saving money?
Have an emergency fund
Bernard Sauvé, now general manager of Dance Victoria, remembers the financial difficulties of being a dance artist. In the 1980s and early 1990s, Sauvé danced in Vancouver, mainly with Ballet British Columbia and Judith Marcuse Dance Company. To make ends meet, he got a roommate, worked jobs outside of dance and found some long-term positions housesitting. As for many, getting by financially was a challenge.
During this time, Sauvé put away twenty-five dollars a month in a Registered Retirement Savings Plan (RRSP). “It wasn’t a lot at the end of the year, but saving was ingrained in me by my father,” he says. “I wasn’t really thinking about the future. It was a cushion, in case I wasn’t able to find work for a period.”
Not creating such an emergency fund, and early in your career, is one of the biggest financial mistakes made by artists, says Brian Borts, a Toronto-based chartered professional accountant with a practice specializing in the arts and entertainment industry.
To establish an emergency fund, good options are an RRSP or a Tax-Free Savings Account (TFSA). The interest earned in both is not taxable. With an RRSP, you do not pay income tax on the amount deposited, a benefit in the current moment, but you will have to pay tax when the money is withdrawn. A TFSA provides no immediate tax-relief benefit, but there is no penalty for withdrawal.
The pay vagaries of self-employment in the arts mean saving should be prioritized along with other necessary expenses like rent and paying bills.
File taxes promptly and thoroughly
After his performance career, Sauvé and then-partner Jim Smith co-founded Eponymous, an arts and cultural management agency. They provided their clients with a range of services, including tax preparation. There Sauvé learned the importance of properly filing taxes and sufficiently claiming expenses.
Filing your taxes promptly and ensuring you claim all of your claimable expenses are important steps to financial health. Left too long, the penalties on late payments can eventually outweigh the tax amount owing. Get help from a professional knowledgeable in taxes for the arts to ensure you claim everything you can. “There are lots of expenses you can claim as a dancers,” says Borts,” like rehearsal wear. The average artist is not aware of these.”
Plan for the future
The Senior Artists’ Research Project, whose steering committee included Joysanne Sidimus, found that most artists do not retire. Only five per cent of artists, from a variety of disciplines, were no longer working in their field after the age of sixty-five. For many, this decision was the result of financial need, not choice.
“At the moment,” says fifty-something Sauvé, “I’m enjoying what I do; I am learning and inspired again since coming to Dance Victoria. I am not thinking about retirement but I do imagine a time when I will want to slow down to a pace that is more balanced.”
Both Sauvé and Borts recommend defining long-term financial goals and setting pathways to achieve them. A serious consideration of the finances required for retirement, whatever the balance of work, savings, government pensions or other income, is necessary and pressing.
To ballpark your future needs, consider the net income on which you would be able to live, the sources from which you will draw (savings, government pensions, work) and multiply by the number of years you anticipate living past retirement. “It’s not a hard mathematical calculation,” says Borts, “but it a sobering one. It is a very important exercise that is not done enough.”