As we approach the end of the holiday season, now may be a great time to evaluate your finances and plan for the next year.
Although we musicians sometimes get stuck in the “starving artist” mentality, no one is forcing us into poverty.
While it may be true that most musicians probably won’t ever be rolling in cash, there are many things we can do to improve our financial situation.
We ultimately want to maximize our income and control our costs to the greatest extent possible.
Here are a few tips to achieve that end.
Making More Money as a Musician
If you are looking to increase your musical income, don’t be afraid to pick up some extra work outside of teaching lessons. Most musicians make their living by combining multiple streams of income, myself included.
Consider using your skills to play for weddings, funerals, and holiday church services. Some musicians make a rather large portion of their yearly income from these events.
You could even set up a business card style website to promote your efforts and rank in search engines for geographically targeted searches. Getting your name out there, establishing a reputation of reliability, and being easy to work with will go a long way towards more and better paying work.
Additionally, try to avoid missing income that would otherwise be headed your way. Do you cancel lessons too frequently? Are you constantly dolling out credits for folks that cancel on you? These things can be handled with some discipline and a few policy changes.
Invoicing and Keeping Track of Your Expenses
While you work to maximize your income, you’ll also want to keep records of what you make versus what you cost. This can be achieved by using one of the many bookkeeping applications (such as Wave or Freshbooks).
These applications will make you look more professional, help you minimize the hassle of taxes, and offer you a big picture view of your business decisions.
Many of these applications will also allow you to invoice clients for your services and help you collect payment more efficiently.
Invoicing offers clarity to your customers by displaying the prices for your services in a consistent and professional manner.
This helps to reinforce your policy, which ultimately saves you money.
You Need a Budget
Regardless of what you do for a living, you should always budget for your expenses against your income.
Musicians especially need to be skilled budgeters, because our income tends to be sporadic and unpredictable.
Budgeting allows you to do more with less money and represents your ticket out of the paycheck to paycheck lifestyle.
My favorite approach to budgeting is the YNAB method, which stands for “You Need a Budget.” This website allows you to connect your bank account to a budget tool that operates sort of like a virtual cash envelope system (Dave Ramsey style).
The amount to be budgeted will be populated with the amount you currently have in your account, and your job is to divide that money across every possible category until you have zero dollars left to be allocated (known as zero based budgeting).
Any time money comes in or goes out, you select one of the categories that you picked earlier, and the money is deducted from that category.
This enables you to keep track of many individual funds from month to month, even if you only have a single bank account. This budgeting method is downright life changing, and I couldn’t recommend it more.
At the end of the day, you will be most effective in your work when you don’t have to worry so much about the money. The start of a new year is a great time to reimagine your financial situation and take charge of your life.
To summarize, I’ll briefly list the important highlights from this post:
- Pick up extra work, especially during the holiday season.
- Try to avoid lesson cancellations on both your end and on the part of the student.
- Use accounting applications to invoice students, collect payment, and keep track of your expenses.
- Use a zero-based budgeting system to make better decisions about your money and stretch your income as far as it will go.
I hope you have a wonderful holiday season and wish you well in all your musical endeavors!