Lately the news of VFX studio DNEG asking global staff to take as much as a 3 month pay cut has been much talked about. Before that, DNEG had laid off all their TV VFX crew in L.A. and MPC, Mill Film and Scanline were laying people off too.

I remembered during the 2008 recession, as a wide-eyed intern at one of Lucasfilm’s company meeting, I heard an executive say that the entertainment industry is recession proof. People still need to be entertained during a recession. Perhaps even more so. I was very proud that I had picked an excellent industry to be in.
Obviously since then, news of layoffs and studio shutdowns have riddled CG for a some time now, despite the global economy enjoying massive growth over the last 10 years. In many respects it is tied closely to the business model and the climate of globalisation.
Even at a company as well managed and deeply connected as Industrial Light & Magic, I was at risk of losing my job when Disney bought over Lucasfilm. Jobs were being “restructured” and no one knew what Disney felt about owning a VFX studio. While I was never laid off, eventually a number of my friends lost their jobs when Disney shutdown LucasArts.
I remembered telling myself that I needed to be better with my money. Things aren’t looking so rosey after all. It really left a bitter after taste to feel that my future was at the mercy of people and forces beyond me.
I felt trapped and helpless.
I wish I could say I took action immediately, but sadly, I did nothing. Things returned to normalcy and I got comfortable again — I took no action.
It wasn’t until years later after I got married that I finally took action to put myself into a position of financial resilience because I started thinking about what I wanted to give to my wife and my future family.
You may not find yourself in an industry with low margins or having to chase jobs where the global tax incentives go. But as the coronavirus pandemic shows, no one is completely exempt from financial volatility.
Even theatres and feature film entertainment that are “recession-proof”, did not count on a virus that would keep people from wondering out of their homes for months.
As artists, the work is seasonal and project-based. There’s no guarantee of rolling on to the next project all the time. And entertainment is hardly an essential service during a pandemic.
This can all be rather unnerving.
Life throws us curve balls all the time. No one anticipated a world where people had to be 6 feet apart adorning masks, yet it happened rapidly in a matter of weeks across the globe.
Over the years, life has surely thrown me a fair share of curveballs to navigate. I am happy to say I made it through!
But I also cannot overstate the importance of the opportunities life has thrown at me that I would not have been able to seize if I was not financially resilient.
Some of these have included:
An incredible job opportunity that was more in line with my goals and allowed me to earn more eventually, but I had to take a 20-25% pay cut.
Shoddy contractor work while restoring a home damaged by a hot water heater leak. That resulted in out-of-pocket expenses that ran upwards of $20,000(not including attorney fees when the unscrupulous contractor tried to sue me).
The pandemic causing my wife to lose a significant stream of income.
You may not relate to the same situations, but a common scenario people experience is having to navigate 1-2 months of no-pay between job transitions. Maybe the next gig doesn’t start up as soon as the current gig ends.
Or even the bee sting that resulted in a $400 urgent care medical bill that showed up 5 months later? (That actually happened to me.)
Have you ever wished you could just walk away from a job that had an unappreciative boss or toxic culture, knowing that you are already set for the next 6-12 months?
Financial resilience is not about being good with money, as I have learnt. It is about enabling you to walk out from bad situations in life. It’s about enabling you to pursue opportunities and interests that satisfy you as a creative and a creator. And finally, it’s about freedom to prioritise what is most important to you and your loved one.
Here’s one mindset and a four strategies I employ personally.
Be Proactive
Before tactics, everything begins with mindset.
Be proactive is the first habit in Dr. Stephen Covey’s famous book 7 Habits of Highly Effective People.
It’s about taking responsibility for your life. It means to carry your own weather about you.
All the bad news going on can often cause one to unconsciously fall prey to a victim mentality. We feel victimised by the greater powers that be or the circumstances that life has “dealt us”.
I have no control over where the jobs go so I’ll have to go to get the work wherever the film rebates go.
During these times, it becomes even more crucial that we focus on what we indeed can have control over.
And we do have much that we are in control over, contrary to popular belief.
But you have to believe that you can take action to make a significant difference.
These are some basic tactics I have used to build financial resilience as an artist. Anyone can do this and many in fact have.
These basic tactics will allow you to build a solid foundation for the next stage which is financial freedom.
Financial freedom is when you never have to worry about your job paying the bills anymore — you work only because you want to. But that is a next level topic for another day. Let me know in the comments if you want to hear about it.
So onto these basic financial resilience tactics.
Track & Budget Your Expenditure
What gets measured gets managed.
Peter Drucker – The Practice of Management.
Described as the “Founder of Modern Management”, Peter Drucker famously said, “What gets measured gets managed”.
If you don’t track where your money is going, you are never going to be financially resilient.
This is possibly the most important tactic. And if you make it away with only one tactic. Let it be this.
This was the reason why I did not start earlier. I hated to track where my money was going. It was “too tedious”. As a result, it took me a long time before I build up financial resilience.
Today, I still hate to track my money. But here’s my secret, my goal isn’t to track and budget money. It is to gain financial peace and freedom. The times it has helped me gain clarity as to where I am financially and where I want to be has given me so much peace that I don’t give up doing it even when I fall back.
There’s lots of ways to do track and budget expenses, including using a simple spreadsheet or a notebook and envelopes.
Or perhaps you could get a little bit of help with technology and use a tool like Personal Capital or You Need a Budget(YNAB) to track your expenses.
I personally use YNAB to track and budget all my expenses and Personal Capital to track my net worth.
Optimise Your Expenses
Once you had a chance to track your expenses for about a month, you will be ready to start optimising those expenses.
In fact, you probably found that you couldn’t resist optimising along the way already(just as the wisdom of Peter Drucker predicted).
Now I am not going to ask you to cut your kombuchas if that absolutely brings you joy. I’m asking you to decide to spend on what truly makes you happy.
Being Intentional about Your Happiness
Seat down and write the top 10 things that bring joy in your life on a weekly or monthly basis.
Here’s mine.
- An un-rushed time in the morning to spend in meditation, prayer and planning.
- A quiet afternoon tea with the Mrs.
- Hiking or walking in the park with the Mrs.
- Reading and snuggling with my kid.
- Reading or listening to a podcast on a comfy chair with a drink.
- Catching up with family in Singapore.
- A good steak, cheese and wine.
- A good movie.
- Time to learn something new. e.g. a new sport.
- Gardening and growing food.
Interestingly, I found none of these things that bring me joy really cost much. So the Mrs and I went on a hunt cutting down on all the expenses that weren’t bringing us joy.
We cut Netflix and instead rented a blu-ray movie every week for $2. Now some savvy readers will point out that I am not saving much when the lowest Netflix monthly subscription is $8.99. That’s true. But now I get to choose to watch the latest movies that become available for rent before they get onto Netflix. However, even that does not compare to how much more time I get to spend with the Mrs now that I am not binging on a Netflix TV series every night(Designated Survivor, anyone?).
We started learning to grill some awesome steaks at home instead of eating out at expensive restaurants. We got great wines and cheese from Trader Joes, Aldi and Costco instead. The wine, cheese and steak that we are having now is so much better than what we get at the restaurants, that we actually avoid them now because we don’t want to be disappointed. Our monthly food budget went from $1200 to $300.
We stopped chasing the latest iPhone. My last phone was a parting gift from George Lucas to all employees in the company that lasted me over 5 years and my current iPhone 7 Plus is probably 3-4 years old already.
I wore a smart watch for the longest time, when it broke, I was very tempted to look for another. But the moment I did my top 10 list, I realise what I was really after. The smart watch lost it’s attraction on me. I got a $15 casio watch instead! Believe it or not, I like it more than when I was wearing a smart watch.
We stopped ordering random things from Amazon and buying stuff that isn’t on the list when we shop at Target. I estimate we spent over $1500-2000 on Amazon every month when we weren’t tracking and budgeting.
We started growing our own food. We bought chicks that we have been having lots of fun raising as chickens for eggs. It isn’t cheaper. But my family has lots of fun doing it and it’s more important to us than spending on knick knacks down a Target aisle.
Now what you choose to cut and spend on will be different. But it will be intentional if you take the time to understand what gives you joy and mercilessly cut the rest.
If ordering and reading art books brings you happiness, you should do it. But stop being peer-pressured into ordering a drink during those afternoon latte trips to Starbucks with co-workers.
You’ll soon realise how much less money you actually need to be happy.
Here’s a quick tip. The largest expense categories that most people spend on are rent/mortgage, food and transportation. Optimise these areas and you’ll find that you can save a lot. I could talk in depth about each category, but I won’t bore you. Let me know in the comments if you want more of this, while this isn’t a personal finance blog, I am always glad to talk about things that help us as artists and creators.
Necessary Expenses
As you go through this exercise, you will find that there are some expenses that are necessary for your survival. e.g. rent/mortgage, utilities, food, etc.
And there are some that aren’t as necessary such as vacations and dining out.
You’ll want to gather a list of the necessary expenses and sum them up for the next tactic.
Create an Emergency Fund
78% of US worker live paycheck to paycheck according to a Forbe’s article based on information from a survey by CareerBuilder.
That makes it impossible to deal with life’s emergencies.
This isn’t limited to the low-income wage worker. Plenty of high earning wage employees live pay-check to pay-check, because they spend most(if not all) of what they make.
Most CG professionals are not your low-wage worker, but probably half of us are living pay-check to pay-check.
When emergencies do happen, like an unexpected medical bill, people living pay-check to pay-check find themselves reaching for the credit card to “fix” their cashflow problems to pay for these emergencies.
In fact, if you currently have credit card debt and you aren’t paying off your credit cards in full every statement period, you have been living pay-check to pay-check.
How bad is it?
Around 40% of Americans struggle to come up with even $400 to pay for an unexpected bill.
These statistics are not better in other countries like Canada, where half of the population lives pay-check to pay-check.
Arguably artists in the CG industry need an Emergency Fund more than the average Joe.
Why? CG jobs are inherently volatile.
Short-term contract jobs that involve moving around the world are inherently going to be riskier than staff positions.
But even staff positions are risky if the business model that the studio engages involves a ton of low-margin plays.
Animation and game studios developing their own intellectual properties invest heavily in their films and games knowing very little if their I.P.s would flop. Don’t believe me? Ask Dreamworks Animation in 2015 when a slew of flops put them in dire financial straits.
So how much emergency fund do I need?
If you don’t have an emergency fund at all. Start by saving $1,000.
Even if you have debt, find a way to save $1,000.
This $1,000 is going to save you from having to dipping further into your credit card debt for small incidents that life throws at you. Remember that bee sting?
It depends on how volatile your particular CG industry and job is.
A good way to think about it is:
If I were to lose my job today, how many months would it take for me to get another job?
If you still are not sure, start with 3 months and then expand it to 6 months.
The rest of this article assumes you don’t have high interest consumer debt, like credit cards. If you do, you will want to pay them down as quickly as you can. So consider only a maximum of 1 month emergency fund until you pay down those debts.
Remember the total sum of necessary expenses you made earlier? Multiply that by the number of months and that is your emergency fund target.
So if you need $2000 each month to pay your necessary expenses, then you will need $6,000 for a 3 month emergency fund.
Keep in mind that this what you need to survive in an emergency for X number of months. Not for you to maintain your current lifestyle for X number of months. You will need to make lifestyle changes if you find yourself out of an income and needing to tap into the emergency fund. But it is something you can do if you choose to.
Diversify Your Income
So far we have played defence. Diversifying your income is playing offence.
A professional artist friend of mine who would exhibit his art and sell them at auctions and art galleries once told me that the key to being an artist is to be flexible and have multiple streams of revenue.
His words continue to ring true in my ears after all of these years.
As an artist you need to be flexible. Besides your nine to five, can you freelance? Can you teach at a local institute of learning? Can you sell the assets or textures you make?
With social media these days, could you start a patreon or use twitch and youtube membership subscriptions? Frankly, I don’t currently use any of these platforms, but I would be keen to explore them and maybe talk more about them in time to come.
Personally, I have my day job where I teach. I also freelance, coach individual clients and consult with studios. The Mrs and I run an AirBnB which has allowed her to stay home. Besides that, I invest in real estate, equities and bonds.
How many ways can you monetize your skills or create additional sources of income?
Diversifying your income is going to ensure that you are not reliant on solely one source of income.
Think of yourself as a business. Businesses that rely on a single client for 80% of their revenue are such high risk, that most banks will probably not extend them a loan even if they are profitable.
How about most individuals who rely 100% on wage income from a single employer?
By diversifying your income, you are going to increase your income too.
At the very least, invest in a low-cost broad-based index fund available either through your company or as an individual. If you are North America, you have a lot of options here. But I am almost certain you can find similar options wherever you are.
Conclusion and Actionable Take-Aways
Talking about money can be seen as taboo at times. But as CG creators and artists, we need and want to talk about these subjects.
It is such an important subject matter especially in such volatile times. While I never lost any sleep over it, I have experienced how fearful I was, when I was not financially resilient. I feared losing my job, I didn’t dare speak up when I knew it was right, I was too afraid to pursue my passion and a whole host of fears.
Being financially resilient is the first step to gaining margin to pursue the things that we truly care about and unleashing our freedom to be creative.
I’ve seen how these financial resilience tactics has helped me to spend intentionally in areas that bring me joy and opportunities and on what matters deeply to me.
I hope this leaves you feeling empowered to start to take control of your financial future as a CG artist/technologist and create margin for yourself to be pursuing your creative goals.
Actionable Take Aways:
- Get started this week with tracking your expenses. This beginner tutorial for YNAB is excellent to get set up if you choose to use YNAB.
- What are the top 10 things that bring joy in your life on a weekly or monthly basis? Write them down.
- Save at least $1,000 for an Emergency Fund. I recommend you get it up to 3 months at least if you don’t have consumer debt.
Let me know on the comments below why you want to be financially resilient CG artist/creator and what are you doing this week to start? I love reading all your comments.
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Great advice Nelson! Unfortunately financial literacy is not something that was taught and taken seriously when we are growing up in Singapore. It took many years of working life to realize I have not been very good at tracking my own expenses. Now that I have a family, I have to be careful with my spending. I took out several insurance and investment plans so that I won’t fritter away my expenses unnecessarily. I also keep a regular deposit every month so that my son’s future education expenses are taken cared off. It is also a good time when you are in your mid-life to work out your will in case anything happen to you. I guess when we are young and just starting out, financial literacy is not on our list of priorities, this becomes more glaring and important as we get older, and even more so at times like these.
Hi Weelian, I agree. Financial literacy is not anywhere. We share so much in common. I have found the best ways to save is to automate, so you don’t have too many decision points about it. I prefer to keep my insurance purely for protection and so I favour term policies. I keep my investments in separate investment focus vehicles that I manage. I have come to the other end of the spectrum where I am very hands on in my finances, although I hardly do much. Just a little bit of adjustments once a year and monthly basic accounting.
i’m trying to figure out how i can monetise my skills as a junior cg artist when there are no gigs in sight. Your advanced insights could possibly help me out financially.
I’m sorry to hear about there being no gigs in sight. Whereabouts are you?
I’m thankful for parents that taught me the importance of saving. Now, as a freelancer in the film industry going on month 6 without work, I’ve been able to survive without fear of how to keep paying the bills thanks to savings from a previous job. Plus this time has allowed me to explore creative passions that I wouldn’t be able to explore otherwise. Thank you Nelson for sharing your insights so that others might find richer creatives lives!
Hi Jacob, your parents are truly a rare breed and they have given you such a gift. Thanks for sharing. Sometimes we just need to hear that other people are doing this and getting financially resilient to help us all get on track. Great job on your blender VFX youtube videos by the way, I like the care and attention you put into your tutorials.
Hi Nelson,
Thanks for covering so much ground in this post. I have brushed off “7 Habits of Highly Effective People” for its click-baitey title, but have added it to my reading list after your post. I think you would like, if you haven’t already, Harvard Business Review’s “On Managing Oneself”, a collection of essays which includes Peter Drucker’s essay by the same title.
Your generosity and insight is much appreciated,
Kathy
You welcome Kathy and thanks for the recommendation. I do like Peter Drucker’s ideas on leadership and management.