Money is stressful. Actually, not having any is stressful. And when you’re on a DIY music budget, you may not have quite enough for that new Tesla.
However, you can do just fine as an indie musician, you just have to know how to keep your finances in order.
So here are the basics of keeping a budget as a musician.
The first thing to remember is to avoid spending money you don’t absolutely need to spend. Be thrifty.
“Thrifty” doesn’t mean buying only cheap things. It means finding good products for less. It’s all about balancing quality and cost.
So if you need a decent-looking music video, you can use a newish smartphone, some friends, and a great idea.
Or if you need some recording equipment, browse through the used section of Amazon, check out CraigsList or the Facebook Marketplace, or even hit up your local thrift store. You never know what you’ll find.
Keep Your Income Streams Separate
If you’re a part-time musician, you have your personal income from your day job and your music income from shows, streaming royalties, sync licensing payments, etc.
And it’s very important to separate your personal income and your music income.
Here are just a few reasons why you should keep things separate:
- Taxes will be get confusing
- Personal income and music income could get mixed up
- It helps you keep the mentality that music is a career/business you’re building
So to help keep your different incomes in line, it’s a good idea to open a separate bank account solely for your music income. Make sure it’s a free checking account with no balance requirements or annoying fees.
This way, you’ll look and feel more like a business, which is what your music career is.
Don’t Forget About Taxes!
Uncle Sam needs a slice of your pie. So you better set it aside for him.
With the free checking account you’ll have for music income (see above), the bank will probably offer a free savings account as well. You can use that savings account to set aside money for taxes.
It depends on your age, filing status, and how much money you made from music. But, just to be safe, it would be smart to set aside 20-30% of your income to save for taxes.
I know that’s a big chunk, but you may not actually need to pay that much in taxes — heck, you may even get a refund. So you can then reinvest that 20-30% back into your music career.
If you want more tips on paying taxes as a musician, check out TurboTax’s guide The Musician’s Guide to Taxes: Top Tax Deductions.
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