Financial literacy within the local performing arts sector

Abstract

PURPOSE: The performing arts, a sector with potential economic growth, faces several uncertainties, such as income instability for its workforce, which can be successfully addressed through financial literacy. Therefore, the objectives of this study are: i) to look into the extent to which owner-managers, self-employed individuals, and freelancers within the local performing arts sector are financially literate, and their views on the benefits of financial literacy; and ii) to analyse if, or how, owner-managers, self-employed individuals and freelancers within the local performing sector apply financial knowledge when making financial decisions, and how this can be improved. DESIGN: A qualitative approach involving seventeen semi-structured interviews was adopted to achieve such objectives. Four interviewees were owner-managers of local performing arts entities. The remaining thirteen were self-employed individuals and freelance workers within the sector, including theatre performers, singers, and DJs. FINDINGS: Findings highlight the vital role of financial literacy in the performing arts sector, with interviewees noting benefits such as effective budgeting, ensuring proper compensation for services rendered and addressing the ‘freebie culture’ established locally, thereby contributing towards a long-term career in this sector. Additionally, the findings reveal that owner-managers in this sector perceive themselves as having an average towards high level of financial literacy, whilst self-employed and freelance workers perceive themselves as having a low towards average level. In this sector, financial knowledge is applied in various financial decisions concerning budgeting, management of funds, determining quotations, and rates of pay, among many others. Findings suggest that the application of financial knowledge can be improved through the education system by introducing tailored courses within the School of Performing Arts at the University of Malta. It was also emphasised that these courses should be adequate and accessible to all, not just those who are financially sophisticated. CONCLUSIONS: The study highlights the importance of financial literacy in the volatile performing arts sector. Overall, the perceived financial literacy level in this sector is average, with owner-managers considered more financially literate than self-employed and freelance workers. Additionally, financial knowledge is applied in several ways within the sector, however, improvement is needed through education to further enhance it. VALUE: This study contributes to local literature by bridging the performing arts sector with accountancy. It offers further insight into financial literacy levels, benefits, use in a distinct sector, and the application of financial knowledge in decision-making. Recommendations focus on enhancing financial literacy awareness and improving the use of financial knowledge in everyday situations.