Personal financial management isn’t something simple for everyone. This is true for every professional who don’t have financial management skills or training. Provided in this page are things that you should learn to ensure that as a musician, you will be able to manage your finances well. It’s important to note that personal financial management is something that can best be achieved when you know the best tips. These are the tips that will help you ensure that you don’t clear your bank account. Knowing how to do financial management is a great thing that will enable you live comfortably. Check the best tips below.
One of the most important tips in personal financial management is the 50/30/20 rule that you should have in mind. This is the ratio that guides how you should divide your money that you have earned. This is to mean that payment from a gig should be divided by using the ratio above to avoid money wastage. The ratio dictates that 50% of your earnings will be used to pay for personal needs such a bills, rent, and food. The other 30% should be used on what you want. This is the money that you will use to purchase new clothes, new musical instruments, video games, etc. The remaining 20% should be your savings. This is the money that will stay in your account should you have needs that will require you to touch your savings.
Musicians often earn their money every time they do a play. Your pay will be on a day to day basis and this will prevent the clarity of the big picture in your sight. To prevent such things, it’s wise to go through what’s in this page and learn more. You should use a spreadsheet now and create a budget. With a good spreadsheet you will be able to see well the amount of money that you will have to pay off for various bills. Every gig will have its pay and they all vary that such a spreadsheet will be very useful.
Earnings for musicians will not be steady for all months as they will vary. In some months, you will receive huge amounts of pay and in others, you will earn low amounts. This is the reason you should ensure that you budget well the months that you earn more to cover for the months that you will earn less. The spreadsheet that you created will help you a lot here to save your money. Also, you should always be ahead on expenses every time to help you avoid financial problems. This means that ensuring that you have money that can pay for your bills the following months even if you won’t have any work to do.
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