Wednesday, April 6, 2016

Budget 101: A Performers Guide to Getting Control of Your Money

By: Jeremiah Johnson

A budget is a basic building block for financial success, but for most musicians it’s a confusing world of numbers and stress. Relax! If you can learn Mozart or Berg, you can manage your own budget! With a little help it really isn’t difficult. Here are 10 easy tips for building your next, or first, budget!

1) Automate it. Programs like Mint and YNAB (You Need a Budget) have lots of pre-made categories, making it easy to break down your monthly spending habits and see where your money goes. Have a huge Starbucks addiction? You’ll be able to see in uncomfortable detail how much that daily, skinny, extra hot, flat, white is setting you back.

2) Have different types of goals. Make sure to have short and long term goals. Try to find weekly, monthly, and 3+ month goals to track. That way, when you accomplish the short term goal, you get a burst of confidence to help propel you to the next goal, and the next, and so on.

3) Be realistic. I know you need to save money, but you’re not a hermit. Lying to yourself and saying you aren’t going to have fun of any kind is ridiculous, so plan things like “fun money.” You’re going to go out anyway. You might as well build it in now so it doesn’t throw you off track.

4) Steady income only! If you don’t get money from it on a regular basis, don’t include it in your regular budget. Day job? Sure! Church gig? Yup! A friend of a friend, who knows a guy, and it’s a done deal…. they just have to get you the contract, but they promise it’s gonna happen? NOPE!!
Take money from one-time gigs and put it in your rainy day fund. Then when that “sure thing” doesn’t come through, you aren’t forced to choose between keeping the lights on and your cell phone.

5) Plan ahead. Yes, I know audition season is in the fall, but if you just put away a little bit each month ahead of time then you won’t have to eat cat food to afford that last minute audition trip.

6) Realize that budgets change monthly. No budget works perfectly every month. The budget for living at home and working your day job is wildly different than the budget for your summer program in Italy. Trying to use one for the other is only going to end in tears. A few months out, make a rough draft, and then the month before sit for 30 minutes and fill in the blanks. It’ll help you be more successful and help you see how your spending changes.

7) Check in often. Making a budget doesn’t do you any good if you don’t check it. Make a budget “date night” every week to make sure you are staying the course. Make it a relaxed and fun event. Sit with a nice glass of wine and just make sure you’re staying the course. You have that fancy budget app for a reason, so you might as well enjoy it too!

8) Accountability is key! Talk to someone you trust and make them hold you accountable to your budget. Having to explain to someone like a family member or financial counselor why you spent $50 at happy hour last week is going to make it easier to curb the impulse.
9) You’re going to screw up, and that’s okay. The idea is to create a budget and learn from the mistakes. Don’t give up just because you got it wrong. If you went over in a category, figure out what you did wrong and adapt for next month.

10) Give yourself a pat on the back! Don’t just stop and notice what you did wrong. Take the time to acknowledge your success too! Highlighting the positive helps keep you interested and motivated to keep going.

Remember: this is a marathon, not a sprint! Take your time and learn along the way. Soon you will find taming your budget isn’t as hard as you thought! Good luck!