Your music career is not a smooth financial journey. A good month is often filled with paid gigs, loads of merch sales, and lots of new freelance work. But in the next month, not so much, while your career costs (studio time, travel, instrument repair, software, marketing, etc.) keep coming in.
This doesn’t have to be entirely certain to plan for the costly months of a music career. By making the independent musician aware of the many expenses of a career in music and by making a plan for these costs to be able to finance them, the most important thing is to have enough financial air to be able to handle the irregularities in the income. It can’t all be planned out, and when there are any irregularities, it has to be dealt with as well.
Build a Clear Picture of the Costs That Keep Returning
Many musicians assume that recording a track or going on tour will only cost money once. However, as noted earlier, many of these types of income-producing events are in fact regular expenses that need to be anticipated in a musician’s financial planning.
Some of the regular costs of maintaining a career in music for independent artists include the costs of rehearsal space, instrument maintenance, distribution to online stores, costs of software and plugins, the costs of a website and domain name for their own website, travel costs for gigs and festivals, and costs of promotion of their own music through media and other channels.
This will also help the artist realize how much is being spent in each area of their costs. A number can seem like a very large or very small number depending on the situation. For example, $1,000 can seem like a lot if it’s being spent all at once, but it can seem like less if it’s being spread out over the course of several months. By understanding how the artist has spent their money over the course of the past year, they can get a better understanding of where the most expensive months of the year will be and can start planning for them in advance.
Keep Career Reserves Separate From Everyday Spending
However, these funds need to be kept separate from other money to ensure that sufficient money is available for expensive periods of activity in a music career. If all monies are held in one checking account, then it is impossible to work out how much is left to spend as opposed to monies that have already been earmarked for future work.
Once independent musicians recognize how many of their expenses recur throughout any given year, they can put that money in a “Career Reserve,” which could be held in the form of a high-interest checking account. In such an account, monies that are intended to be used for future professional expenses (e.g., recording sessions, travel to shows, future replacement of existing equipment, etc.) are kept completely separate and apart from the funds that the musician would use for everyday spending.
A better approach is to separate career savings from the money used for everyday expenses. Instead of treating all available cash as one pool, musicians can set aside funds specifically for studio time, travel, equipment, promotion, or quieter work periods. For some, it may make sense to open a high-interest savings account for this purpose so those reserves remain clearly separated from regular spending. The value comes from creating a financial boundary that makes it easier to see what money is available now and what has already been reserved for future career needs.
Further, separating savings for emergencies and other personal expenses from professional career expenses, as stated above, will better enable the musician to anticipate the amounts of money required for his/her upcoming work.
Treat Strong Months as Part of the Bigger Cycle
In general, busy periods should not be mistaken for being able to spend more money. While it may seem as though there is more money available to be spent during busy times, some of this income can be used to fund quieter periods, tax, or other costs associated with future projects.
Rather than seeing each of the busy months of the year in isolation from the other months, the musician should treat each of these months as part of a larger cycle of income and expenses and plan accordingly.
That doesn’t mean every extra dollar has to be saved. The point of planning around cycles is to have enough money to enjoy the fruits of your labor and also invest in your music career. If you are making money from your music, then that means your music is working for you. Now, you just have to figure out how to save enough to ensure your music continues to work for you in the future.
Put simply, after you get paid, set aside some money for taxes, some for your career reserves, and cover your current financial commitments, and then see what is left for you to reinvest in your music or to just spend.
Plan for the Costs That Appear Before the Income
Like to record, like to tour, like to spend money on equipment and other things and think that it is all one-off costs. In fact, a lot of costs are recurring in practice, like rehearsal space, instrument maintenance, digital distribution of your music, plugins for your computer, website fees for your site, travel for gigs, and promotional materials.
This can be particularly problematic because although a particular project may have financial returns that are greater than its costs, the front-loading of costs can mean that musicians make decisions on projects on the basis of cash availability rather than on the quality of the opportunity for making music.
This will also mean you are less likely to rely on credit, for example, to pay for your rehearsal space and other recurrent career costs that are easy to anticipate in advance.
Leave Room for the Unexpected
Not every expense can be predicted. For example, an instrument can break just before a gig. Also, travel plans can be changed at short notice. A gig can be canceled, or a freelance project can fall through for no reason. In these cases, a musician who has planned for every eventuality can still be caught out.
A margin of funds to cover unexpected costs, such as an instrument that breaks, an unexpected cost for a trip, or a canceled show, is also part of the independent musician’s financial preparations for unexpected occurrences.
Independent musicians do not have to make their creative work more predictable in order to have financial stability. They simply need to have enough flexibility to cope with the cost, irregularity, and periods of quiet in their career. In order to achieve this, independent musicians need to have clear spending habits, have saved enough for any unexpected expenses that may arise, and have sufficient reserves in place. They also need to have a good understanding of their future income.
