Financial Tips for New Musicians

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Financial Tips for New Musicians

Entering the world of being an independent musician is an exciting opportunity but will also come with some obvious hardships. 

Any time you enter a field such as the music industry, finances will be a concern. You will need money to do everything, from promoting an album to recording a song, all the way to advertising an upcoming gig. On top of this, it cannot be easy to maintain a constant revenue stream to fund these projects.

Like any other gig-based business, money management will be extremely important in determining your success in the field. The music industry can be cut-throat; there is a reason that many small-town bands stick to playing only local gigs. Taking that step to become a musician will take dedication, money, and a bit of luck.

Don’t panic, though! Every day, musicians are figuring out different ways to save money and ensure that their dollar goes as far as possible.

Long story short, balancing a budget in this uncertain environment can be difficult, but with a bit of guidance, you can become your personal finance expert. Follow some tips in this guide to be the most financially fit musician. 

Financial Tips for New Musicians

Settle Finances Before Making the Jump

As you jump into becoming a full-time musician, there are a few things that you should address and take care of beforehand. 

First off, it would be wise to address any debts or bills that you may have already hanging over your head. Like any other business, you likely will need to put yourself in a bit of debt to start your music career. Due to the likelihood of you getting into debt during this process, you should do your best to consolidate and pay down any existing debts you may have.

The path you take will be dependent on your existing debt situation. Some easy ways to mitigate your debt are:

  • Debt Snowball

If you are in a situation where you have multiple debts, then the debt snowball plan may be an option for you to consider. In this payment plan, you pay the smallest debt down first while paying the minimum on other bills. Once you eliminate one debt, you take the money you used on those payments and invest it into the next smallest debt. Eventually, you should see a snowball effect take place where you have debts being eliminated quickly. 

  • Debt Avalanche

This method will pay down multiple debts quickly, but it differs from the debt snowball method. In this situation, you will pay down your debts, but you will want to start with the loan with the highest interest rate first and then move on to the next once you pay off the previous one.

  • Debt Consolidation

So far, we have discussed the best ways to pay down multiple debts at different times. Debt consolidation is another option where you would pay down your entire debt at once. Using a HELOC allows you to take out equity on your home to use for almost anything. This is especially helpful with any credit card or medical bill debt.

Making sure you are financially healthy before entering the music industry will put you in a better position to succeed. As mentioned, you likely will need to take on more debts in the early stages of your journey, so it is better to enter with a clean slate than with a mountain of debt.

See Yourself as a Business

One of the hardest things to grapple with when you enter the world of professional music is that you need to view your music as a business venture and not just a hobby. Before, you may have been making a bit of money off gigs here and there, but not to the scale you are going to now. 

As you transition from a hobbyist into a full-fledged musician, there are a few business practices that you will need to keep in mind to ensure your financial success. 

To maintain their financial health, every musician should open a separate bank account for their music needs. As music will be your livelihood, you should treat it like any other business venture. If you owned a traditional business, you would likely have a separate bank account and credit card for business expenses. The idea is the same with music. 

Having a second bank account will allow you to keep your finances completely separate. This will help you manage debts while also being able to make purchases for your music career no matter what may be happening in your personal life. 

This second bank account will also be crucial when establishing your side hustle as a legitimate money maker. This will make it easier for you to handle taxes, expenses, and write-offs when the tax year ends. The business account will also help you appear more legitimate to agents, music promoters, and venue agents as you begin to book events as gigs. 

Source Your Equipment Frugally 

Music equipment is expensive. There is no way around it; every musician will need professional gear to do their best work. However, there are ways to save money when buying your equipment which we will run through here!

First, you will need to find instruments if you do not already have them. For example, if you have been using an old hand-me-down guitar from high school, it likely is time to invest in a new one.

Going to the music store is always an option, but beware, prices will be highest compared to other purchasing methods. The benefits of going to a music store may outweigh the risks of purchasing used equipment from someone online, though. You get peace of mind at a music store by buying something new from a verified dealer. Your instruments will all be brand new and come with warranties, valuable manuals, and other information, but it will be at a higher cost. Certain music stores will offer financing incentives if the price tag is too high for you to handle all at once but beware of high-interest rates and predatory contracts.

If the sticker shock of buying music gear at a music store is too much for you, it may be worthwhile to consider buying used gear. Using something does not mean it is less useful than a new instrument. Often older models are more quality than newer models. Take to online marketplaces to find killer deals on great old music equipment. Be sure to research ahead of time to ensure you are getting the best deal. Also, remember that there will be no guarantees or warranties for this used gear!

Your equipment is the tool of your trade. Naturally, you want the highest quality equipment, but in this circumstance, it is better not to break the bank immediately. Remember, your tools are important but do not make the musician. Starting with a modest budget will only help your financial situation as you begin to grow.

Build Constructive Relationships

The music industry can be one of the most difficult to break into. Middle-men gatekeepers and powerful people are around every corner to either help or prevent a musician’s career from advancing. While frustrating to hear, sometimes it matters who you know to make it in the music industry.

As you dive into the music industry, try your best to meet people with some power in decision-making. This can be someone as low as a local radio host who can plug your songs into a local promoter who can book you cheap gigs. Building these relationships will only open more doors for you. More opportunities mean more exposure and more practice. 

Go to local concerts and open mics to meet people in the local music scene. The more connections you have, the more chances you will meet someone who could do you a favor. Sometimes all it takes is one break for your career to take off. While it sounds cliché, putting yourself out is half the battle. So keep networking, and eventually, a door will open for you!

Use Cost-Effective Ways to Promote Yourself

As an independent musician, it is all on you to promote yourself. However, promotion can feel overwhelming between writing, recording, playing gigs, and organizing everything else. On top of that, the gatekeepers in the music industry make it extremely difficult and expensive to promote yourself effectively. Luckily, the advancement of technology has made it easier than ever to promote whatever music project you are working on cost-effectively. 

In the past, smaller-scale musicians had to rely on others to help promote their work. If you were lucky, a local disc jockey might play your song on the radio for some exposure, or maybe a nightclub would leave your concert poster up. Today, you can still use these ways to promote your record, but there are other ways to promote yourself in a more actionable way.

Using social media, musicians everywhere have realized that they have far more control over their promotion than the musicians of yesteryear. On social media, you have the power to create fan engagement and excitement through posting updates and advertisements about your band. Setting up an account on each major platform is a great start.

Each of these platforms can be used in slightly different ways. To help you get started, here are a few ideas to help flesh out your content:

  • Facebook

Facebook is probably the most informative platform out of the major social media platforms. To use it effectively, create a band page on the platform and start posting updates. The best thing about Facebook is that you can link your pages to your band page and invite all of your personal friends to like the new page. Additionally, Facebook should be used to post more newsworthy content, such as upcoming events and gigs.

  • Instagram

A little more photo-friendly than Facebook, Instagram is great for more visual content. You can still give updates to your fans, but it should be done more creatively than on Facebook. Consider incorporating behind-the-scenes pictures and videos of your progress as a way to bring fans on the journey with you. 

  • TikTok

This will be more of a personal preference than the other two platforms. TikTok is a growing platform that is huge amongst the 13-21 year old demographic. If you want to target them, consider using TikTok as a way to showcase your music and talents. There are always new challenges, and you may be able to draw up some engagement if you participate in a viral music challenge. You can even put your music on TikTok for others to use in their videos. If yours happens to be used, it can become a viral campaign that produces a ton of exposure!

  • Website

Creating a website today is easier than ever. Site builders allow even the least experienced people to build powerful websites. You completely control a website and can be used both to convey information and as a content hub. Build your SEO knowledge for musicians specifically and use it to grow your site and its ranking. A website also will help you look more professional to promoters and other music professionals. 

Promoting yourself will not be easy, but these new tech-focused methods should help you get your name out there. The best thing is that each tool (besides the website) is free to use. So you can get out there and start building an audience with just one post and no budget!

Your journey into the world of music has just begun! It is an exciting time but also a scary one. 

You are likely questioning a million things daily, especially how you will make money. This guide should help you get started and give you the tools you need to break into the world of music without breaking the bank.

Remember, this is to help new independent musicians; as you grow your brand, there are other steps you can take to save money along the way.

So with that said, good luck, and get out there!

Financial Tips for New Musicians

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