The Money-wise Musician: 3 keys to managing your finances

 

For a small piece of paper
It carries a lot of weight
Call it lean, mean, mean green. – The O’Jays, “For the Love of Money”

While creating great music is its own reward, a professional musician can’t sustain a career without being paid adequately for his or her services. Thus we spend a lot of time and energy dealing with the business aspects of music – getting booked, making contracts, and getting paid.

If we’re diligent in these areas, we can hopefully earn enough to make a living doing what we love. But simply increasing our  income doesn’t equal financial success.  Many musicians have a bad habit of mishandling money, and there are far too many examples of gifted artists that end up penniless and powerless over their financial futures.

How can you maintain your financial footing while focusing on your art? Here are three steps.

  1. Inspect your Income: You can’t manage what you don’t monitor. Many of us work from gig check to gig check while failing to accurately track our income. Take the time to sit down and analyze all of your income, as well as the expenses you incur while performing.  Once you know your net income, you can move on to step 2.
  2. Implement your Strategy: Even if your musical earnings look good, you’ll fail to create the financial future you desire without a strategy – and yes, this means making a budget. Make a commitment to living beneath your means, and set goals for savings, debt reduction, and future major purchases such as a home. The same discipline it takes to master an instrument is the
    11230102_1112357015447622_5520898967718040977_n

    Don’t be this guy. (via NPR Music)

    same discipline you need to see your financial situation improve.

  3. Invest in your Art: Investment isn’t just a word for retirees with 401k accounts. If you intend to remain active as an artist, you must invest some of your income back into your career. Commit to setting aside part of your compensation for future costs of training, marketing, new equipment and other music related expenses. Only things you prioritize will grow and expand, and if you want your career to grow, so must your investment into your business.

It’s good to be a great sounding musician, but it’s better to be a great musician with a sound financial foundation. 

Here are some helpful tools from other musician / business sites:

Creating a Budget – The Savvy Musician

Financial Literacy for Musicians – Astrid Baumgardner

Tax Info for Musicians and Singers – Riley Associates

NOTE: Links are offered for informational purposes only and do not constitute endorsement.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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