“Unprecedented.” “In these uncertain times.” Can we all collectively agree we should stop using these terms as the tag lines for our present circumstances? I’m going to share what is perhaps an unpopular opinion – nothing about what we are experiencing right now is unprecedented.

Unsure where your next gig is coming from? No idea how long your current finances will last until you do find work again? Or if you can live off unemployment? Or if you have enough union hours for insurance?Not sure if you should spend every waking moment looking for work? Or use this free time to ‘finally get healthy’? Or instead learn a new skill to improve your craft?

As a freelance feature and TV editor who’s spent 15 years living as a digital nomad in the ‘gig economy’ jumping from one show to another, I don’t call any of these circumstances unprecedented – I call them ‘Wednesday.’ The only thing that is perhaps unique in our lifetimes is the fact that rather than some of us being busy and others being between gigs – we are all collectively experiencing unemployment on a global scale.

There’s no question that jobs in the entertainment industry are essentially non-existent right now. And this has forced us to confront how vulnerable we truly are as craftsmen to our level of financial dependence on other people’s projects – no footage, no money in the bank account. I’m a big believer in seeking the opportunity in every situation. And the opportunity I see that is rife for the taking is using this as a learning experience to better understand where we are financially vulnerable and what actions we can take to not only weather this storm but also prepare for the next one.

Of course in hindsight it would have been wonderful to have already set up emergency funds, multiple bank accounts to help better organize your finances, and better manage your budgets. After all, do you know when the best time is to plant a tree? Twenty years ago. Do you know when the next best time is to plant a tree? Today.

If you have some time to kill right now (and who doesn’t?) below are several practical steps you can take to better organize your finances to prepare for the next lean period (global pandemic or otherwise) and alleviate a tremendous amount of financial anxiety.

As editors and visual storytellers, it’s our job to tell the most succinct story we can with the material provided to us and ‘cut out all the bad parts.’ Now it’s time to use those skills to tell the story of how you spend your money.

I’m shocked at how many people don’t have a clear picture of their monthly budget for basic essential living expenses like utilities, rent, insurance, etc., not to mention all the other nonessential expenses like streaming subscriptions, clothes, software, hard drives, etc. The prevailing strategy that most people use to manage their finances is, “If my bank account still has money in it and there are no overdrafts, then I guess everything is ok.” If you plan to work for General Motors for the next 35 years and you’re confident income will be consistent, this is not the worst strategy (well, actually it still sucks). But if you intend to survive the gig economy as an independent contractor, it’s imperative you have a clear picture of what you spend.

First you need to calculate all of your ‘essential’ fixed monthly expenses that are required for basic survival at your current standard of living: mortgage/rent, car payments, auto & home insurance, health insurance, home security, essential debt payments, gas, water, and electric, internet and phones.

Second, add up all additional variable expenses like groceries, gas in your car (which probably isn’t much right now), streaming services, cable TV, clothing and miscellaneous entertainment. Then tack on what you spend for business expenses like software subscriptions, equipment upgrades, etc. that are ongoing (i.e. not one-time investments).

Now with all the story components laid out and a clear picture of your story structure, if income is minimal (or non-existent), it’s time to get out the hacksaw and ‘kill your babies’ (luckily this time you get to be in both the editor’s and the director’s chairs!).

*How important is it to have access to ALL of your various streaming subscriptions? (If you have kids to entertain,
a couple might belong in the ‘essential’ category … I get it.)

*Are there downgraded ‘freemium’ versions of certain apps or subscription services you can do without or develop workarounds for?

*How necessary is it to order takeout or maintain the gym memberships you’re not using? (Although if you have the means right now, please make an effort to support your local businesses.)

*How important is it to have Paleo-friendly mayo instead of Miracle Whip? Can you substitute that Heineken with a Pabst Blue Ribbon? (Sorry … couldn’t resist.)

Yes, these are all difficult conversations. But when times are lean and your financial story could easily be categorized in the ‘horror’ genre, this process is not about enjoying the pandemic from the comfort of your living room. This is all about survival.

Once you’ve trimmed down all non-essential expenses, the most painful part of this process (even worse than studio and network notes) is culling through all of your expenses and calling your various banks, auto lenders and utilities companies and negotiating discounts,payment extensions, etc. Yeah it’s painful, but dedicating just a few hours to this process (and spending a lot of time on hold) I was able to reduce my monthly budget by over 35%.

After mercilessly trimming every unnecessary bit of your financial story, what you are left with is the heart of your story – your ‘Sleep Easy’ number – which basically means as long as you can generate this amount of income on a monthly basis, your standard of living is safe.

Yes, I know you probably chose to become an editor because you hate math. But inevitably as a storyteller we need to do the math to determine how long we can maintain our financial story without it jumping the shark. (In this case jumping the shark means going broke.)

With a clear picture of your ‘Sleep Easy’ number (the minimum monthly income you must generate to maintain your lifestyle), you need to determine how long your story will last. Are you a five-minute Sundance short? Or an eight-season run? In the startup world this number is called either your ‘burndown rate’ or your ‘runway’ (everything I know about running a business I learned from HBO’s Silicon Valley, FYI).

Here’s how to do that math:

1. Take your ‘Sleep Easy’ number from Step 1…
2. Add up all liquid cash-on-hand in all bank accounts, savings ac- counts, emergency funds, etc. that you are willing to tap into…
3. Divide your total cash-on-hand by your ‘Sleep Easy’ number to determine how many months you can continue telling your story before things go bad.

If you are receiving unemployment or some form of monthly government stimulus (like the EIDL or PPP programs),
or residual payments, or social security, or any other source of income, include those in the equation to extend your runway that much further.

At this point in the editorial process you’re either feeling good about your financial story and pretty close to locking picture … or you’re freaking out. You may have learned that your monthly income both pre- and post-pandemic is in alignment with your expenses and your money is allocated accordingly. Beyond that, you’ve done a good job of saving excess income during the ‘feast’ months to allow yourself to cover shortfalls for the ‘famine’ months. In short, you have plenty of runway for months to come.

The more likely scenario, however, is that you’ve discovered multiple plot holes, extraneous characters, unfinished VFX shots, missing music, and story points you thought made sense that have thrown your audience completely off track. If this sounds like you and you’re running on financial fumes with no income in sight, it’s time to talk about better organizing your bank accounts so you never have to experience this kind of anxiety again.

Most people have one, two, or at the most three bank accounts. Perhaps a personal checking, a business checking, and maybe
an extra savings account or two. I have 19 bank accounts. And all of them are automated so that when income hits my primary account it is funneled to the appropriate accounts to pay all of my expenses, save for big expenses (i.e. college funds, vacations), extract any surplus income that goes into a separate account to cover income payment for leaner months, and more. You don’t need to set up 19 bank accounts, but you do need more than one if you want your money to tell a clear and succinct story.

First, at a bare minimum, have two personal checking accounts to separate all of your fixed monthly expenses (required expenses that don’t change – mortgage, car payments, TV, phone, etc.) from your variable expenses (groceries, gas, misc., etc). This will help you better understand what is the ‘Sleep Easy’ number required for each account (and make it that much harder to spend money you shouldn’t really be spending).

Second, once you’ve separated fixed from monthly expenses, create a third checking account (if necessary this can also be savings, just be careful of minimum balances and fees). Its sole purpose is to harbor surplus cash during the good months. This is the account that will cover your salary during the bad months.

For example, if you have $5000 per month in fixed expenses and $1500 per month in variable expenses, your ‘Sleep Easy’ number is $6500 per month.

If you make $10,000 in a good month, $3500 should go to your cash surplus account and stay there. If your bank offers the ability to hide your accounts, hide it. Find the digital equivalent of shoving this money under your mattress and forgetting about it. That way if you have a month where you only make $3000 in income, you’ll have that $3500 to cover the shortfall and you can maintain your living expenses stress free.

Beyond these three basic accounts there are a multitude of options for even more accounts: tax savings (if you manage tax payments yourself), savings accounts for big upcoming expenses, etc. How many accounts you choose to manage and automate is up to you. In short, just do whatever is necessary so you don’t fall into the trap of thinking that if there’s cash in your checking account, it’s meant for spending.

This pandemic hit a lot of people incredibly hard. The vulnerability you might feel right now, whether on a financial level or even a human level, is nothing to be ashamed of. We are all in this together. As much as life feels completely out of control, there are still areas you can take back control, and one of them is how you manage your money from today forward. That way, no matter the circumstances in the future that lead to leaner months, you are better prepared to weather the storm.

After all, this isn’t the final release print, we’ve only hit our first test screening. There’s still a lot of time to tighten, polish and rewrite our financial stories.

(If you’d like help organizing all of your financial information step-by-step, I’ve created a handy Google Sheet Budgeting Template that you can download for free at my website: optimizeyourself.me/budgeting)