It can be expensive keeping your musical career up and running, especially if you’re footing it as a freelancer. Cords, amplifiers, pedals, strings, cases, soundboards, mics, pre-amps, recording gear, everything adds up quickly — and that list doesn’t even include, you know, your actual musical instruments.
It’s tempting to simply swipe a credit card or take out any loan you can find in the name of pursuing your craft, but if you do that, sooner or later debt and bad credit are going to catch up with you.
If you’re a musician trying to make it on your own, here are a few tips and suggestions to help keep that cash flowing so that you can continue to finance your melodious dreams over the long haul.
Do Your Homework
Before you start building a budget, saving money, or looking at loan options, the first thing you want to do is conduct some research. If you feel that you need new equipment, ask yourself a few questions right from the get-go:
- Do you need this item right now, will you need it in the future, or is it simply a “want” and not necessarily a “need?”
- How will you pay for the item: by borrowing money, on a credit card, in cash, using more than one source?
- How will the piece of equipment help you better your craft and is it worth the cost?
- Have you researched the item in question to ensure that it’s precisely what you need?
Starting with a few questions like these can help you set the tone for your equipment upgrades. For instance, separating wants from needs is a classic way to avoid spending money on unnecessary items. Do you want to upgrade to that Stratocaster? Sure. Will it truly help you play guitar better, though — especially proportionate to the cost?
Or forget about expenses for a second. Are you sure you’re getting the right item in the first place? The Line 6 Variax may be great, but if you’re looking to record some keys, you may want to invest in something else that doesn’t favor a guitar sound.
Or what if you’re considering taking out a loan? Have you run the numbers through a basic loan calculator yet to determine if you can afford the payments?
The point is, take the time to answer the tough questions at the beginning of the process before you commit to harmful financial decisions that you’ll regret down the road.
Stash That Cash
Next up, it’s important to try to build a cash buffer to help with new equipment. This may sound difficult when you already have to debate if you can buy a cup of coffee in the morning, but it’s really important, and it’s never impossible.
Here are a few suggestions to help you come up with some extra cash:
- Create an airtight budget that specifically considers your unique lifestyle.
- Go through your expenses, identify wants versus needs, and look for ways to cut out the former whenever possible — at least until you can save up an emergency fund.
- Look for extra forms of income, such as graphic design or social media management, that you can do while you’re on the road to help bring in some extra cash.
- Consider your regular activities and look for ways to cut down on costs, such as getting a coffee maker for $30 instead of dropping $7 at Starbucks every morning.
If you can successfully implement some of these strategies, you can start to squirrel away twenty bucks here, a hundred dollars there, and before you know it you’ll have a “rainy day” fund that can, at the least, take the edge off of a larger professional expenditure.
Tend to Taxes and Your Credit Score
Finally, remember to take the time to care for your long-term financial health. You can primarily do this in two ways:
First, make sure to do your taxes carefully and correctly. Navigating freelance taxes can be difficult and require you to answer some tough questions. Should you incorporate as an LLC or remain a sole proprietor? How and when do you file a return? Should you hire someone to do your taxes or do it yourself. If you tackle these questions head-on, you’ll be able to avoid penalties or fees and will be able to fully take advantage of any tax breaks that may be available, such as writing off new equipment and tour expenses or funneling income through an S-corp.
Along with doing your taxes, it’s important to maintain a high credit score. You can do this by:
- Making all of your payments on time and in full.
- Paying down existing debt.
- Keeping paid-off credit cards open to increase the average age of your credit.
- Opening up new lines of credit to increase your credit utilization ratio (i.e. how much of your available credit you’re using).
Working on your taxes and credit score may not directly impact your ability to buy new equipment in the here and now, but it will ensure that you remain financially viable in the future. This, in turn, will enable you to take advantage of any tax perks that you may be missing and allow you to borrow funds easily and at lower rates of interest.
Financing a Musical Career
Keeping that cash flowing can feel challenging at times. However, if you go into the process with a clear head and a plan in place, it’s possible to finance new musical equipment without breaking the bank in the process. Hone in on homework, stash that cash, tend to your taxes, and crank up your credit, and before you know it, you’ll be able to replace your equipment and remain financially healthy at the same time.
Courtesy of Indiana Lee