Budgeting: Making The Most of Your Money
5 Tips: Budgeting For Musicians
According to a budgeting study by The Global Benefits Attitudes, 38% of U.S. employees are living paycheck to paycheck. Making a living is an essential part of life and it’s important to budget our money effectively. In order to provide life necessities, it is important to have a plan for managing our money.
The Expense of Being a Musician
As a recent college graduate, I learned quickly the importance of budgeting. Being on a school meal plan meant I had to budget how much money would go to meals, textbooks, and other miscellaneous things. I also had to watch the personal money I was spending on music, mallets, and other food. It can be easy to lose track of your money when you have new freedoms, but it’s important to keep in mind how the lack of budgeting can have a huge impact on your future.
As musicians, not only do we share the same expenses non-musicians have, but we also have the cost of making music. Instruments, sheet music, auditions, traveling; all of these are added expenses that non-musicians don’t have to account for. Since these are as important to us as general living expenses, it’s key to have a budget that works with our unique spending habits.
These budgeting tips can help you save money, prepare for the future, and help you make the most of your money.
1. Know What You’re Budgeting
In order to start a budget you need to know what you’ll be working with. Whether it’s monthly expenses, student loan payments, or saving for that new instrument, it’s important to separate your different expenses. Types of expenses for musicians could be:
Living expenses (rent, utilities, etc.)
Food
Music (books, instruments & accessories)
Travel and Transportation (auditions, gigs, conferences)
Recurring Bills (student loans, bank loans, etc.)
Making a list of all your expenses will help you take inventory for your average budget. Having a good understanding of what your general expenses are can also make it easier to plan for your goals. Knowing what you’re budgeting will make it easier when tracking your money and knowing where it’s going.
“I believe that knowing the “what to’s, when to’s, and how to’s” with your money is the most important step in realizing true success and freedom in your personal and professional life”
2. Keep A Spreadsheet
Having a spreadsheet can be a great way to organize and monitor your spending. Spreadsheets neatly organize where and how much money is going to certain expenses.
The Corporate Finance Institute states,“With a budget spreadsheet, money is managed, and every expense is allotted enough amount without exhausting the coffers.”
You can create a spreadsheet by calculating sources of income and expenses, create savings goals, and create budgets for each specific entry. The spreadsheet will divide each category so you can budget for necessities.
3. Leave Room For Emergencies
Life is a rollercoaster and there will always be ups and downs. Being smart and budgeting your money can help you in the event of an emergency. Whether it’s home repairs, hospital bills, or unexpected finances, budgeting money aside for these situations can limit the stress when it happens.
As of August 2020, 21% of U.S. adults had no emergency savings, according to a statistics report done by Bankrate. The idea that nearly 1/5 of Americans have no emergency savings is shocking.
Even if you are on a tight budget, you should strive to put a small portion of each paycheck into a savings account. This is beneficial not only for rainy day savings but also when saving towards big purchases. A little bit of money saved here and there could potentially be big savings in the future.
4. Find What Works For You
Everyone is different and so is their budget. Just because something works for one person doesn’t mean it will work for you. Take the time to try out different budgeting formats, programs, and methods to find what works best for you.
Some people track daily, while others track monthly or quarterly. Some people track by hand while others use an app or a computer program. Think realistically about what method might work best with your unique musician lifestyle.
No matter what way you decide to budget, make sure you stick to it. The key is sticking through the first few months and getting a routine established.
5. Remember Your Goals
Keeping your goals in mind throughout the budgeting process will help your budget stay align with the needs of your goals. Don’t be afraid to revisit your goals and adjust your budget as needed. Expenses can vary each month, so checking in monthly can deal with these fluctuations.
Goal setting can be easy because we all have hopes and dreams for the future. However, following through and executing them is when it can get hard. At the end of the day, you want to make sure you’re doing the work to reach your goals. Budgeting allows you to strategically set boundaries, have a clear plan, and a concise process for achieving those goals.
Benefits of Budgeting List - The Den Collective
The Importance of Financial Awareness
These tips for budgeting will help you make the most of your money and your financial stability. Knowing what you’re budgeting, staying organized, and remembering your goals will help you with financial awareness and increase the longevity of your money and career in the arts.
The Den Collective partners with Christian McAdams, a financial advisor who offers financial courses as a Resource in The Den. More information about resources The Den offers can be found here.
Understanding your finances and how to budget your money is important when sustaining your career in music. Myself and The Den Collective are here to support and help in any way we can!