Six common financial errors made by artists and how to prevent them

In the music business, people dislike discussing money. That is very understandable. Although very few excellent individuals have ever entered music for financial gain, it does not imply it is not eventually beneficial to your artistic endeavors to master it as Consolidation Now reports, particularly in light of the present cost of living issues.

Music memoirs are replete with tales of shining talents who ended up with nothing and were thrown out of the profession because they made some fundamental mistakes or were unaware.

While unscrupulous characters have often prospered in the music business, we are frequently our own worst enemies.

Money is the primary medium of trade in both society and the music business, whether we like it. Ignoring such rules is akin to flinging a gun safety instructions over your shoulder and strolling across a shooting range ‘because I’m not into bullets.’

As a music writer, I’ve spent the past decade or so pleading with artists to fix my issues, and a few years ago, I began asking them about how they manage their money and generally make it work’ in the music business. To my surprise, most folks were more than willing to offer ideas and items that had helped them.

I believe that money should be discussed more in connection to artistic labor. Because I think that our silence only serves to damage us, I just launched a website called Creative Money, intending to eradicate the taboo associated with money talks in creative industries. I want to share ideas and resources with others hoping that we can all strive toward more inclusive and sustainable creative labor.

In this post, I share a few lessons I’ve learned from artists over the previous decade, ranging from basic concepts to devastating financial blunders. Of course, not everyone will be able to adopt these suggestions during the epidemic, but they may be helpful in the future.

1. Believing that ‘creative individuals are inept with money.’

It is a mistake to believe that being creative and financially competent are mutually incompatible notions. Money is not an essential thing in life. Still, ten years of interviewing professional musicians have shown me that, contrary to common assumptions, most of them are very financially astute.

Assuming otherwise, or worse, holding it up as an ideal, is problematic because it provides us with an ‘out’ – an excuse for not learning how to manage our money – which makes it much more difficult for us to thrive in the sector.

Our financial and creative lives are inextricably linked, and success on any front necessitates the development of momentum. We must be prudent with both components and plan our lives so that they may be balanced to survive these ‘slog’ seasons.

Then, when we accumulate helpful something or get a break, understanding how to utilize it effectively might be the difference between long-term creative freedom and a fleeting moment. KT Tunstall once defined money as “freedom chips,” and I believe it is an accurate description.

2. Assuming liabilities

This is the section that most people will skim over, yet it is the most critical idea to grasp when it comes to money.

Assets generate revenue, and liabilities are items that deplete your financial resources. If you consider money as water, assets represent the tap, and liabilities are holes in the container. You are the vessel. Fill in the gaps.

While not everyone can accumulate assets rapidly, we can all work to lessen our reliance on liabilities. This entails avoiding large, noticeable items (such as high-interest auto loans or credit card debt). It’s also about identifying things that we may believe are assets but turn out to be liabilities.

For example, that 1957 Stratenbacker may look and sound unmatched, and you may even begin to believe it is worth the exorbitant price tag. However, consider the future… If the intonation breaks down every time it comes into contact with a humid club, and you spend your tour days searching out guitar shops and paying to hear the knowing laughter of local luthiers, you’ve entered liability territory.

The same is true for those drinks purchased with a credit card while ‘networking.’ It is the music business, and there will undoubtedly be alcohol involved, but do not leave yourself liable for interest. That is just looting you in the future – that is how liabilities operate. Making an easy option today makes it far more challenging to do so later — and vice versa.

3. Purchasing new equipment

While it is preferable to prevent leaky liabilities whenever feasible, concentrate on mitigating them if this is not practicable. The same holds for any cost, and equipment is a strong option in this category.

This implies that rather than just purchasing anything new, consider what you need it for, why you need it, and how long you’ll need it, and then check whether you can get a comparable outcome for less or (even better) for free.

Consider the following scenario: you’re coming into the studio and want something more substantial than your tattered tour ‘board. Instead of visiting a guitar store, communicate with musician pals that you’d wish to borrow whatever they have available for a week. You can generally gather a relatively wide selection of fresh and inspiring toys to play with for a few weeks.

If you then discover something you like and is necessary for future performances, that’s fine, but at the very least, you’ll know before you purchase it – and you’ll hunt for it used.

4. Departure from home

Yes, I know that dragging your half-stack back to your mother’s apartment after performances does not look good. However, the more committed you are to music as a primary vocation, the lower your costs will need to be — and rent is the single largest ‘gain’ on that front.

Of course, not everyone will be happy sticking it out – for many artists, fleeing a horrible Homelife has long been one of the fascinating aspects of the lifestyle – so if you’re in pain, go away. Similarly, if you’re paying a lot for rehearsal space and can combine it with your lodging creatively, it could make sense to take on some rent.

However, those lucky enough to have supportive parents willing to let you stay a little longer should find a way to make it work. This entails paying your way, maintaining your own space, and behaving as considerately as possible amid the aggravating tensions of family life. Consider it training for life on the road in a tour van.

5. They do not consider their band to be a business.

If you are a professional musician or want to be one, your brand is your livelihood. While this method is rather unromantic, it does not imply that your creative endeavors are not sincere and meaningful.

One of the golden guidelines in the early years of a firm is to avoid taking money out and instead reinvest it to help the venture expand. The same holds for your Career in a band or music regardless of size, whether you’re performing for beer money, worldwide tours, or wedding gigs.

Create a band account and deposit any money earned from your songs into it. You’re likely to have a day job or part-time employment to help pay the bills when you start, so concentrate on saving money with your music earnings. When opportunities or challenges arise, you’ll have some cash on hand to address them, whether it’s studio time, purchasing/hiring gear, paying for public relations, or, as stated below, seeking expert counsel.

If and when you make enough money from music to sustain yourself, aim to restrict your ‘wage’ withdrawals to a modest, consistent level and let any excess accumulate in your music account.

Managing a changeable income is one of the most significant financial difficulties of creative labor. The trick is to keep your expenses low, to live on less than you make, and save everything else.

6. Assuming that seeking professional guidance is too costly

Legal counsel might seem prohibitively expensive, and it is. Lawyers earn a lot of money because their services are judged valued, whether correctly or not. They can rescue you from a great deal of agony, but they charge a steep price for the privilege.

It is critical to get independent guidance before entering into any agreement, including financial obligations, intellectual property (publishing/record contracts), or personal liabilities (enormous show/festival paperwork).

Their drummer Chris Frantz recently shared a tale about how a prominent artist gave them a production agreement. They lacked cash and were delighted but opted to have the contract reviewed by a lawyer. That attorney’s fee may have been their most acceptable investment.

Consider the financial commitments you will need to complete work before signing the contract. For example, who pays the bill if you’ve rented equipment for significant performance and it’s canceled? The proper specialist can assist you in answering these questions and avoiding costly errors.

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This article contains information only and does not constitute financial advice or a suggestion. The content and contents on are provided for your information and education purposes and are not tailored to your specific personal needs. This material is not intended to be financial advice or a suggestion and should not be used.

The FCA does not regulate Creative Money, and Matt Parker is also not a financial advisor and hence cannot provide financial advice. Always do your research and, as necessary, seek independent financial counsel.