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 By popular request, here are a few money-related tips I have for photographers. The information in this post should not be considered legal or financial advice, as I am not a licensed accountant, attorney, or financial advisor. Please consult your licensed accountant, financial advisor and attorney to determine what is best for you and your unique financial situation.

1. Know Your Numbers

The only way to price yourself profitably is to understand the amount of top-line revenue you need to generate in order to come away with your desired salary at the end of the year.

Need help? I just released a Pricing for Profit course that walks you through how to calculate your Cost of Goods Sold based on your past sessions and desired salary in order to know exactly how to price your photography services,  down to the dollar. Check it out!

2. Watch Every Dollar

I think it is important to do your own bookkeeping at least once per week. I log into my accounting software almost every single day to correctly label and categorize all of my income and all of my expenses. In doing this, I can keep an accurate look at my current profit to understand my cash flows and see if I have the capital available to make certain purchases, investments, or advertisements.

3. Always Cover Liabilities

I try to stay debt-free in both my business and personal life. I always want enough cash in my accounts to cover my credit card balance or any purchase I might need to make. At the beginning of my business, I  borrowed from my personal savings account for my business for gear that I paid back as soon as I was able. The most important thing is to avoid being late on your credit card payments because that carries a very high interest rate. If you don’t have sufficient funds for a purchase, and you can’t borrow from your personal savings account, consider taking out a small business loan before putting the expense on a credit card to pay off later.

Taxes are another liability you need to set aside funds for. You can create a separate checking account if you need to visually see the money for sales tax, federal tax, and state tax separated, or simply keep a spreadsheet with the number you need to set aside.

If your business (or personal life) has any type of debt outside of a mortgage, I would prioritize paying that off as soon as possible. Dave Ramsey has a great “snowball” method for eliminating debt.

4. Work on Your Savings

Start with your personal savings: make sure you have at least $1,000 as an emergency fund, and then build that account to 6 months worth of expenses. Then, do the same for your business. Start with $100 in an emergency fund and work up to $1,000, $10,000, and then an amount equal to 6 months worth of expenses.

As soon as your emergency funds (personal and business) are fully funded, you can start saving 15% or more into your retirement accounts. SEP IRAs are a great option for self-employed photographers. Invest as early and as often as you can. The power of compound interest cannot be overstated.

5. Make Your Money Work

Do your research on bank accounts! Open business checking accounts that are free and choose business savings accounts with the largest interest rate. Often times these will be different banks but the hassle can be worth the payouts.

Opt into a business credit card with the best rewards system for you. Personally, I love my Southwest credit card because I can earn the Companion Pass so that my assistant flies to all of my locations for free. Additionally, I earn miles on every purchase that saves a lot of money. I have one personal card and a second for my business. All of the miles go into one Rapid Rewards account. If you apply through this link, you get can get 40,000 bonus points by opening a personal card and 60,000 bonus points by opening a business card. However, the only way to reap the rewards from credit cards is to pay off your card completely every single month. Never carry a balance into the next month and try to stay under 30% of your limit at all times.

6. Diversify Income Streams

As a photographer, you can consider additional revenue sources, such as:

• license images you’ve already taken to commercial or editorial clients
• sell more prints to past clients
• sell your favorite images as ready-to-hang artwork
• educate other photographers and business owners
• sell images on stock photography sites
• assist (or second shoot for) other photographers
• become an affiliate for your favorite brands
• try expanding to additional niches

7. Invest in Education

You aren’t just a photographer: you are a CEO, CFO, accountant, salesman, marketer, HR, customer service, and ten million other hats. I think it is important to spend time developing your weakest skills and talents, unless you want to outsource.

A favorite book of mine is How to Win Friends and Influence People.

8. Have a Rock Solid Contract

What does this have to do with finance? While disagreement on terms might leave you with a small dent in your wallet (such as refunding a deposit), the implications of a full blown lawsuit could be huge.

Protect yourself with a great contract template. You can save 20% off The Contract Shop with promo code KMP20.

9. Make a Budget

At the beginning of the year, I forecast my revenue projections based on my goals, my past years’ performance, and scheduled shoots. They are loose estimates, but they give me a target to shoot for and a number to pray over. This forecast also gives me a base for how I want to spend throughout the year.

First, I start by setting aside funds for my needs. This could be a new camera body or lens, upgrading a computer, or an expenditure I feel is imperative for my business to continue operating going forward. As I earn profit, I stash this money aside to keep it safe for big investments.

Second, I pay into my retirement accounts. As the profits continue, my next priority is funding my IRA accounts.

If there is cash in my bank account left over, I assess if I want to put that back into my business or take an owner’s draw. If I reinvest in my business, I generally spend on marketing and advertising. I base my investments solely on available cashflow in an effort to never go into debt.

Miscellaneous Finance Tips

• Get insurance quotes regularly to make sure you have the best plan
• Cancel any subscriptions you don’t need
• Work with your CPA to change your tax status, if necessary. Filing as an s-corp can have huge tax advantages.
• Have both ROTH and traditional retirement accounts