Sarah Jessica Parker used to get by on $40 for 3 days—it taught her there's 'security in being able to pay your bills'

CNBC

6 days ago

Before the fame, fashion or multi-million dollar deals, "Sex and the City" actress Sarah Jessica Parker used to make $40 stretch for three days, she told podcast host Alex Cooper on a recent episode of "Call Her Daddy."
When Parker moved out on her own at 18, she only had "a little money in the bank" from her role on the 1980s CBS sitcom "Square Pegs," she said. So, as she went out for auditions, uncertain of when the next big job would come, she would withdraw her money "very judiciously," she said — only allowing herself $40 around twice a week for her day-to-day expenses.
Adjusting for inflation, $40 in 1983, when Parker was 18, would be around $132 today, according to the U.S. Bureau of Labor Statistics' CPI inflation calculator.
Although Parker said she was more driven in her early career by her desire to perform than by fame or money, she also acknowledged that financial stability mattered: "There's security in financial gain" and "security in being able to pay your bills," she said.
While Parker's restrictive budgeting may have worked for her short-term, focusing on day-to-day spending isn't the most effective way to strategize and save as a freelancer, gig worker or artist today, says Christopher Haigh, CEO of Icono Capital, a financial advisory firm.
"Budgeting for freelancers and gig workers shouldn't be about rationing pennies or envelope systems, it should be about building a system that absorbs volatility," Haigh says. "If you're relying on extreme budgeting methods to stay afloat, that's a sign your financial foundation is cracked."
Even with unpredictable income, you can still develop sustainable budgeting strategies, Haigh says. Here's how to juggle those ups and downs and start shifting out of scarcity mode, according to a financial pro.
The first step to building a budget is understanding what you're actually spending, Haigh says. In order to evaluate that amount, he says, take a close look at your last three months of expenses.
Once you have a good idea of where your money is going on a consistent basis, you can stop guessing and start planning with real numbers, Haigh says. That's when you can start utilizing his "bucketing strategy," where you allocate percentages of your income into different "buckets" every time you earn money.
As opposed to tiered budgeting, where you assign fixed dollar amounts to spending categories for every month, a bucket strategy divvies up your expenses by percentage of your income. That can provide flexibility for the fluctuations in income that freelancers, gig workers and artists often need to navigate, Haigh says.
"Every time you make a dollar, it should be allocated to particular buckets no matter what," he says.
The buckets for a freelancer or gig worker with minimal income should start out fairly basic, he says:
Even if the amount you're putting into savings doesn't feel like much, developing good habits early can help you reach your goals later on, Haigh says. Using a budgeting app like Tiller, Monarch Money or Copilot can also help you automate those habits and take part of the load off your plate, he adds.
And although it can be difficult to put money aside with inconsistent income, maintaining an emergency fund is especially important if you're likely to encounter weeks or months without work, Haigh says. He recommends freelancers or gig workers put away at least six months of basic living expenses, if possible, which is more than the three months he typically recommends for W-2 workers, he says.
If putting away several months of savings isn't feasible for you, which is often the case for people with unstable income, the next step should be to open up options for growing your income, Haigh says. After all, he says, you can't budget your way out of scarcity.
To help reduce financial stress, Haigh often advises his clients to take up part-time jobs or diversify the gigs they're pursuing, he says.
While it's important to build muscle memory with directing income into your "savings bucket," your priority may need to be figuring out how to expand that income first, Haigh says.