Music is undoubtedly a fun industry in which to forge a career; you would be hard-pressed to find a musician that started their career for any reason other than their passion for what they do. This passion can sometimes confuse a musician’s approach to their work though, especially when it comes to handling finances as a freelancer.
Indeed, many musicians will treat their finances as something of an afterthought – especially when even the slim majority of financially successful live artists lost two-thirds of their income to an unpredictable world event. Still, financial solvency is achievable for every new and working musician. What are the do’s and don’ts for musicians and their finances?
Do: take a business-minded approach to your finances
For the emerging independent, it can be easy to treat meagre income from small concerts and royalties with little regard. But failing to place robust, business-minded strategies in place now could harm you further down the line.
Create yourself a business account for all music-related transactions, to separate your profits from your personal finances. Make sure every penny is sent to this account and logged in a spreadsheet. This way, you won’t lose track of any tax obligations, and you’ll be able to better strategise your next moves.
Don’t: overspend on equipment
A musician’s relation to their equipment is almost profound in nature. Classical musicians rightly spend thousands on their instrument of choice, and gigging bands or session musicians can spend similar amounts perfecting their rig. While investment in your practice is key to development as a profitable venture, there is such a thing as overspending.
The line between investment and ‘gear acquisition syndrome’ can be difficult to trace for many musicians but is important to define. As a freelance musician, you can claim equipment as a business expense and limit your tax obligation – but spending too heavily will cut into your profits, and leave you without a profitable model.
Do: seek funding
Work as a freelancer of any stripe can be inconsistent, and it is natural to experience lulls in your income – whether an artist on a record label, a session musician earning from studio time, or a function musician beholden to the holiday calendar. But income doesn’t always need to come from clients and royalties.
There are many funding opportunities available to musicians, from targeted funding to developing artists to equitable programmes that seek to elevate underrepresented communities. Keeping an eye on various funding bodies and charities is a must, in order to stay abreast of programmes and applications that may open up.
Don’t: say yes to every job
Understandably, musicians emerging in their field are often of the belief that taking on every show or piece of work that comes their way is the sensible route to financial independence and success. However, counterintuitive as it sounds, this can be harmful to your long-term financial strategy.
Every ‘gig’ you take, whether “sessioning” in the studio or playing live, will have a benefit-cost ratio to you as a business. There are many occasions on which this benefit-cost ratio can work against your favour – whether by rendering you unable to take additional work elsewhere or by not covering the expenses they create.
Before saying yes to a job, ensure that the job fulfils a minimum set of criteria for you. The more selective you are, the more successful you will be.