7 Major Things That Keep Us Broke
The music business can be very profitable and musicians can make make a decent living doing what they love. As a musician you can find yourself hustling and traveling from gig to gig and hoping to land a tour that can be tiresome and sometimes chaotic. If you add in your added rehearsals and travel time you can easily diminish your wages if not careful. So…. you’ve learned how to manage your gigs and schedule, and you find that your projected income will be profitable for the next 6 months.
What you don’t foresee, is a couple of cancellations, a reduction in fee/pay due to adjusted payouts by the artists, or just general mishaps or issues that can pop up at any given time. Maybe your car needs an unexpected repair, or your equipment needs replacing. These are just a few of the challenges that a musician can experience while trying to make a living as paid musician. It’s so important for musicians/artists to write out a plan and prepare in advance for unexpected mishaps. Here a 7 major things that will keep us broke if we do not prepare. These habits not only apply to musicians, but generally will keep anyone broke if they don’t change their thinking and life patterns. Lets get started…..
1) CHECKING YOUR CREDIT REPORT – With all of the credit card fraud and identity theft, it is extremely important to check your credit report from time to time. Checking your report is an important way to ensure your personal and account information is correct, and may help detect signs of
potential identity theft quickly. It not only helps you to be aware of what lenders see and it can also help you to be proactive in correcting any issues that may be a problem down the road.
2) NOT HAVING A BUDGET PLAN – Have you ever wondered where did all your money go ? Without having a written plan, you can find yourself broke very quickly. Writing your budget helps in tracking your monthly expenses. When writing your budget plan, start with these steps…
Step 1: Write down your net income (The amount you bring home after taxes)
Step 2: What are your bills for the month (Track your spending)
Step 3: What are you trying to accomplish for the month – Set your goals
Step 4: Make a plan. … Example : Concentrate on paying down a specific credit card.
Step 5: Adjust your habits if necessary. Example : You may need to cut back on eating out for the month
Step 6: Keep checking in – Weekly or bi-weekly, check where you are with your finances. What bills have been paid ? What unexpected expenses have occurred and how do you plan to fit it into your budget ?
Not Having A Budget Will Leave Your Broke and Frustrated….
3) USING STORE CREDIT CARDS – We all love the convenience of shopping online. Some of us love going to our favorite malls and window shopping, which can easily turn into compulsive buying. Musicians love to go their favorite music stores or shop on Ebay. Before we know it we are buying equipment that we really don’t need. We love having latest and greatest, but sometimes our income does not justify the expense of having lavish equipment.
The store credit cards can either help or damage your credit depending on how you use your cards. The rule of thumb is not to go over 30% of our cards utilization, but how many of us charge to the limit ? We simply find ourselves not being able to control our spending. Now, if you are disciplined and can pay the full balance each month, you can avoid the pitfalls that come with being broke and having bad credit. It’s all about discipline and having the habit of planning. Otherwise the added interest will surely keep you broke. The money you are spending in interest per year can be astonishing, and that money could have easily been used in some investments.
4) LEASING or HAVING A PREMIUM CAR PAYMENT – We all know that when we drive a new car off the lot…it immediately depreciates. If you lease the car, you are renting the car, and you will never own it or eventually consider it an asset. In some cases it may be feasible if your job is reimbursing for the cars expenses. Although we all would love to drive the car of our dreams and we look good driving our cool car……..This is another way to keep us broke.
We may need to drive the less expensive car for a little bit while we save for the car of our dreams. High car loans with added insurance premiums are one the number one ways that we stay broke. We love CARS…. I get it, I love a nice car too, but there is a smart way to get what you want at the right time. Do your research, and more than anything remember that your car cost should NEVER exceed over 50% of your yearly salary.
5) CONTROLLING ADDICTIVE HABITS : Habits like SMOKING, DRINKING, and GAMBLING can drain our pocketbooks quickly. Although they are self gratification type habits they are expensive and if you’re not careful, you will have wasted money that you could have saved. According to the National Cancer Institute, the average cost of a pack of cigarettes is $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year. Ten years of smoking comes with a $22,920 price..need I say more ???
Alcohol is also costly. Anything that you do excessively not only is not good for your health…but will keep you broke.
6) EATING OUT FOR LUNCH/DINNER – There is nothing wrong with having lunch or dinner from time to time with our peers or associates. If you can budget your daily lunch expenses, by all means, do whatever works for you. If you are struggling to make ends meet, you may find that preparing your meals at home may save you lots of money. Spending $10.00 a day can add up to about $200.00 per month for lunch expenses alone. Whenever you really start to look at where your money is going, you will see things differently. Your habits will change.
I understand that a musician on the road will have different challenges. You may need to buy quick budget meals/groceries to store in your hotel room. This may not be feasible if you are constantly traveling or on tour. Better yet, you should always negotiate a per diem for food in your touring contract, so that you aren’t spending crazy amounts money in food and drinks alone.
Otherwise, if you work locally it may be a good idea to bring your lunch from home, and eat out maybe…once a week. Preparing your lunch the night before will cause you to eat better and be more mindful of your daily expenses. Preparing your dinner rather than ordering out will again… save money. Find budget meals online that can assist in setting up your daily habits for saving. You will be surprised of how much money you can frivolously spend each week for food alone. This is in addition to your weekly grocery expenses. Just be aware and make the necessary adjustments.
7) NOT HAVING A LONG TERM SAVINGS PLAN OR EMERGENCY FUND – An emergency fund is a bank account or money set aside to cover small or large unexpected expenses, such as medical expenses, appliance repair, car repairs, family emergencies or the most dreaded reason…… unemployment. We never know when any of these things can happen…and having some cash put away for easy access is important. Its always a good idea to have some funds at home in case of bank shutdowns, or ATM issues….anything is possible.
Hopefully we know that we should be saving for our future retirement. There are many options available, but research and make a savings plan for your future. Don’t worry if you haven’t started. Just start putting something away. Invest in gold/silver…mutual funds…Diversify….If possible, don’t invest all of your money in one area. There are so many resources now to help you to build a secure future. Start small, and keep building. You will be surprised how much you can accomplish in a few years. Your nest egg will be waiting on YOU !
The main point is to be cognizant of your daily spending habits so that you can prosper. We all have made mistakes and hopefully you are an individual that can learn from your past and readjust for your future. As musicians we can by nature be reckless and adventurous. Our creativity can get us in trouble, but we must learn how to use our gifts and be wise in our affairs. We can then advise a young musician that is traveling the road we have traveled. Maybe we can help them in not making the mistakes we made….. This is how we can make a difference and not be BROKE doing it …… Rhythm Always and DONT MISS A BEAT !!
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