Tori Spelling money problems

Here's a confession that makes me blush even when disclosing it to my closest friends (only two of whom I've told up until now): I'm a Tori Spelling fan.

Seriously…did I just say that out loud? Let me do a little shameless damage control.

I'm not into 90210 or any of her B-rated television movies. And Mystery Girls — a series she co-created and acted in before it was dumped in season one — really didn't hit the mark for me. What I'm interested in is Tori Spelling, the person.

I'm kind of fascinated with her.

Fortunately I get to satisfy my curiosity on a semi-regular basis with both her marriage and family life being paraded on reality television shows, one of this breadwinner mama's main revenue streams.

So how does my {shameful} interest in Tori Spelling Reality Television relate to my {shameless} passion for personal finance?

Tori Spelling Says She's ‘Living Paycheck to Paycheck', and I'm Calling Her On It

While watching an episode of TrueTori the other day, Tori made a startling confession: she revealed that she's tired of living ‘paycheck to paycheck'.

Cue the awkward crickets in our household after she dropped that bomb. I mean…how can Tori Spelling, Ms. 90210, Ms. Daughter of 80's and 90's television-mogul Aaron Spelling, be living paycheck to paycheck (and if she is, then what hope do the rest of us have)?

The answer is — and this is true of many Americans who say they're in this category — she's living paycheck to paycheck because she chooses to.

Tori's Action Plan to Stop Living Paycheck to Paycheck

Maybe Tori doesn't know another way to live. I'd like to think this was intentional and she's put herself into the Automatic Poorhouse to save gobs of money just like we do from time to time. But I think that's an overly optimistic sentiment (call me crazy, but I think Ms. Spelling might have a bit of a shopping addiction).

Today I'm going to show Tori Spelling how she –and really anyone living a feast-or-famine lifestyle — can find a little meat-and-potatoes financial consistency in her stressful life.

Note: I don't pretend to know what goes on behind-the-scenes in Tori's household. She may very well be doing some of these things below, and her statement might even have been a publicity stunt. But I'm offering up my expertise anyway in the hopes that she'll take it to heart. After all, I feel invested in her. Seven+ years of watching her reality television shows will do that to you.

Action Step #1: Analyze Your Income and Average it Out

Actors, people who are self-employed, artists, and the like can have highly inconsistent income. This makes managing cash flow an unwieldy task at times.

Sure, it's not difficult to do when the  money is rolling in. But trying to figure out a budget to work during the plush and lean times is quite difficult to do.

You need to look at your last several years' worth of income, and do a calculation. For each year, divide your gross income by 12 and figure out how much you averaged in income per month for that year. This is an important number you'll need for Action Step #2, as it should be what you base your monthly spending budget on.

Action Step #2: Set Up a Money System that Feeds You Consistent Paychecks

Next, you need to set up a money system that will feed you and your family consistent paychecks. That's right, it's entirely possible to enjoy consistent pay with an inconsistent income (ask me how I know).

Open a business checking account to catch all of your business earnings. Associate this account to your personal checking account. Use the information you gleaned from Action Step #1 to set up an amount of money each month that will be automatically withdrawn from your business checking into your personal checking. Finally, decide if you would like to be paid weekly, bi-weekly, or monthly. Adjust your automatic withdrawal schedule accordingly.

Live off of this set amount. If you earn more, let it buffer your business checking or put the buffer aside into a business savings account for income droughts as well as to fund some of the options below.

Action Step #3: Pay Ahead on Bills During Plush Times

Use some of your extra income during times when you're bursting at the seams to take the pressure off of low-income months. Pay semi-annual or annual bills like insurance policies ahead of time in one lump sum. Your insurance agent won't mind what time of year you do this. Stock up on household products so that during the low times there's less household spending to do. You might even score a bulk deal or two. Pay for your entire year's worth of child care (this is specifically for Tori, who probably experiences turbo- shots of income coming in that can equal six months' salary for the rest of us).

Action Step #4: Invest in Income-Producing Assets

Instead of using the extra income during the plush times to splurge on you and your family, use it to invest in income-producing assets that you can draw on to supplement your cash flow in slow times (if need be).

Action Step #5: Stop Handcuffing Yourself to Money Obligations Based On Your Best Paychecks

Your current paycheck does not necessarily reflect next month's paycheck. It could…but gambling on “could” is no good. So your best bet is to never have your financial obligations come close to your higher monthly income levels.

Let's say over the last year, you've done well for yourself. You've pulled in $10,000 a month for January through April because you scored an awesome QVC network deal. In April, you have a reality television deal on top of that awesome QVC deal, so you pull in a sweet $20,000. You're feeling so great about this new income level that you decide to put a down payment on a really expensive summer beach house.

It's not a stretch if you base it on the $20,000/month temporary income level.

By May, the QVC deal has wrapped up, but your reality television paycheck is going strong for another month, so you still have $10,000. Then you are in the summer doldrums, and you go down to $7,000/month.

If you based your ability to pay for that summer beach house on the $20,000 month, or even on the $10,000 month, then you would be feeling the pinch instead of basking in the sun for June, July, and August.

What you need to do is base your ability to pay for huge purchases (especially ones with ongoing costs) on your lowest month of income for the year. This gives you an excellent chance of feeling flush and comfortable, even when the checks thin out.

A little less feast now means a little less famine later.

Action Step #6: During Bad Times, Button Up

One of the best ways to deal with financial fear in low income-producing periods is to audit your household spending (specifically the subscription-like bills that get charged each month). This will immediately put more cash flow into your hands. Not only that, but it gives you a better sense of control, something a person with inconsistent income can be lacking.

Tori has begun doing this by consolidating her storage units after admitting that her current storage unit costs equal a mortgage payment (I'll bet not the kind of mortgage payment you or I are used to seeing). She has multiple other opportunities, no doubt, to cut back.

Tori, I could go on. The fact is, you are choosing to live paycheck to paycheck. Choose instead to get on solid financial ground so that during the next doldrums — and business is cyclical in nature, so you will experience the downs as well as the ups again and again — you won't be as fearful or stressed out. And especially so that you won't have to say silly things like “I'm tired of living paycheck to paycheck” on reality tv. Because let's face it, your declaration of living “paycheck to paycheck” is laughable to the rest of us, even if you were being completely true to yourself.

5 replies
  1. Jill
    Jill says:

    I don’t feel sorry for her….personally, I think she’s a brat. I feel sorry for people who go to work 40+ hours a week and still barely get by. She had her life handed to her on a silver platter….you make your bed, lie in it.

  2. Money Beagle
    Money Beagle says:

    My wife watches that show so sometimes I’ll keep an eye on it for a few minutes here and there. While I didn’t catch any of this discussion, it’s pretty apparent that she definitely enjoys the good life. I couldn’t imagine living that way with that kind of income, especially when in her case she has to know that the flow will eventually slow down, having watched many of her colleagues experience the same thing. Step one should actually be to hire a solid financial adviser.

  3. Georgia
    Georgia says:

    I was suggested this website through my cousin. I am not certain whether or not this submit is written by means of him as no one else realize such specified about my trouble.
    You are wonderful! Thank you!


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