28 Tips for Managing Your Personal Finances in a Time of Income Uncertainty
If you’re a gigging musician right now, you’re probably freaking out. Your income streams are being cancelled, you’re having to scramble to replace large chunks of money that were earmarked for important things like rent, food, and utilities. Even if you have a healthy savings account, using that money is not ideal, and you have every right to be nervous about your financial future.
First: take 3 deep breaths and repeat after me: It’s going to be okay. This, too, shall pass. This feeling is not forever.
The market will correct itself with time and the proper interventions. In the meantime, here are some tips to help you manage what money you do have coming in and going out, for the foreseeable future.
The most important thing is to be able to see in writing everything going in and out for the next few months. If you don’t already have a personal household budget, this is the time to make one.
1) Make a spreadsheet that lists all your bills in order of importance. While “importance” might mean something different to each person, there are 4 general categories of priority:
“Four Walls” - The things that keep you from being homeless, like rent/mortgage, home equity loans, utilities like gas, electricity, water, internet.
“Essentials” - groceries, phone, car payment, gasoline, car insurance.
“Spending” - subscriptions, cable, gym memberships, charitable giving, gifts, restaurants, hair and appearance, entertainment, etc
“Debt” - the minimums due on credit card payments, student loans, other personal loans, medical bills, etc.
2) Pay your rent first - even if you have to make partial payments. Unless you have somewhere else you can live (like your parents), you need your home first and foremost. You do NOT want an eviction on your record. Landlords are humans too, and unless they’re truly evil, they’ll understand your unique, and short-lived predicament. Use honest communication to work through your needs.
3) Pay utilities next, then buy food/toiletries/medication.
4) Be sure to keep your phone turned on - downgrade your plan temporarily if necessary - so you can communicate with friends, family, and business colleagues.
5) Pay your car note and insurance and keep your gas tank full, so you ensure you can get to work when gigs begin to reappear.
After these are taken care of, most other spending is discretionary, or flexible, and can be cut temporarily. We’re talking bare bones here, people.
6) Stop all automatic payments until your income stabilizes.
7) Cut what you can live without for a month or two. Cancel subscriptions you aren’t using. Pause automatic charitable gifts. You need to focus on you right now. Use an app like Trim to help find these subscriptions.
8) Avoid overdraft fees at all costs. If you think something is going to overdraw your account, call your bank and ask them about their “Stop Payment Policy.” There might be fees to stop payments, but they might be less than the overdraft fees would be. It doesn’t hurt to ask. Again, use open and honest communication to express your needs. If your bank is impossible to work with, withdraw your cash and go find a new one (I like credit unions for this reason). Set up overdraft protection from your savings account, if you have one.
9) DO NOT use credit as a way to get through this without having to change your lifestyle habits. Credit cards are not your friend. You’ll come out on the other side with higher minimum payments, higher interest amounts, and a lower available credit amount. This is a time when you’ll be borrowing money without any certainty that you can pay it back within a reasonable amount of time. Just don’t do it.
10) Contact existing debt companies and ask for a month of forbearance. It’s not easy to say the words “I can’t make my payment this month,” but the repercussions from skipping a payment can be huge - late fees, cancelled cards, higher interest rates, lower credit scores. Calling ahead of time and asking for help is a totally okay thing to do. And trust me, you won’t be the only one. You’ll still owe what you owed, but they might waive the late fee, or reduce the interest rate. The only way to know is to ask.
11) Shop at wholesale produce markets, Aldi, and other discount grocery stores. These stores offer the same quality of food as larger grocery stores, but at a fraction of the cost. Grocery stores like Kroger, Westborn, and Whole Foods charge about $4 per item on average - meaning, if you bought 25 regular priced items, your bill would be $100.
Aldi’s average is $2.50 per item - meaning if you bought the same 25 items, you’d spend $62.50, saving $38.50. Meijer and Walmart come in around $3 per item.
Use unit pricing while shopping to compare the difference between generic and name brand items. Every tag in the grocery dept has a unit price listed - usually, “cost per ounce” or something similar. If a box of Cheerios is $3.99 for 19.5 ounces, the unit price is $.20 per ounce. The generic “Honey Nut Toasted Oats” costs $2.79 for 21.6 ounces, coming in $.13 per ounce - 35% cheaper.
This type of savings can be HUGE in reducing your grocery bills.
12) Avoiding throwing any food away. If something is about to go bad, or you have leftovers you’d normally toss, freeze them, save them, and try to salvage them. Throwing food away is the same as throwing dollars away.
13) DO NOT step foot into a restaurant. Back to unit pricing, let’s take a look at the real cost of a Jimmy John’s sandwich, chips, and a drink. At $7.95 for a Beach Club sandwich, $1.59 for chips (2.1 ounces), and $1.99 for a 20-ounce iced tea, a pickup order at JJ’s comes to $11.95, and you only get to eat once.
Meanwhile, at Meijer, a pound of turkey breast is $5.99 (4-6 meals), a loaf of bread is $1.19,(12 meals) iceberg lettuce is $1.39 (4 meals), mayo is $1.49 (20+ meals), a bag of chips is $2 (8.5 ounces), 24 iced tea bags is $2.39, and an avocado is $1. For $15.45, you would be able to eat at LEAST 4 times, versus one time at Jimmy Johns.
For every one restaurant meal you buy, you could be spending the same amount at a grocery store and getting more than 4 meals. I’m a huge fan of JJ’s and I get it - convenience freaky fast, and that bread, OMG, but desperate times call for desperate measures.
Avoid restaurants at all costs if you want to stay cash flow positive.
Avoid alcohol and drugs as well. While it might feel good to temporarily numb your anxiety, the markup on these items is immense, and you will blow through your cash faster than you can say “vodka soda with a lime, please.” If you must drink, choose low-cost beer or spirits and avoid restaurant drinks, which are typically marked up 400% from the cost of buying a bottle in a store.
14) Avoid shopping at 7-11 or “convenience” style stores for the same reason. Drive the extra few miles to get to a real grocery store.
Cutting costs can’t be the only way you get through this. You also need to diversify your income streams.
My friend Ari Herstand wrote a great article about things you can do while waiting for gigs to be reinstated, so check that out here:
9 THINGS TO DO NOW THAT YOUR GIGS ARE CANCELLED BECAUSE OF CORONAVIRUS
15) Be okay with asking for help. If fans were planning to attend your show and received a ticket refund, ask them to pay you anyway (Ari provides great scripts for this in his post). Provide them with your Venmo or PayPal information and write a warm, genuine email about how you want to continue making music for them, but need financial compensation in order to do that.
16) Start a Patreon page and record exclusive content for your biggest fans.
17) Put your music up on Bandcamp. You can choose your own pricing, and Bandcamp pays out 85% of gross income.
18) Got old merch laying around? Bundle it and sell to your email list and followers.
19) Host Facebook live concerts or host shows on StageIt or YouTube. Music makes people feel good, and it’s necessary right now. Drive your fans towards platforms that pay you with an air of compassion and understanding toward their own financial situations.
20) Sell or rent gear you aren’t using anymore. Every dollar of income can help right now.
21) Teach online classes. I use Teachable (whensongsmeanbusiness.teachable.com). Some other options are Udemy, Kajabi, and Skillshare.
22) Make sure your songs are registered properly. If you haven’t published your songs, you’re missing out on publishing royalties, and could get some money for your streams. Ari provides tips for this in his post.
23) List snippets of old songs on stock music websites like Pond5. Check out Stock Music Musician for more info on this.
24) Reach out to sync licensing companies and apply for consideration. Sync licenses can range from $200-150,000 and come at unexpected times and intervals. A windfall like this could save you, but only if your songs are made available.
25) Use this time to write new music and record at home.
26) Send all those emails you’ve been meaning to send. Got a stack of business cards sitting there from that conference you went to 3 years ago? Reach out. We’re all in the same boat here - sitting at home, waiting for things to change. Use this time to create change.
27) Apply for home-based freelance work. Register for Fiverr, Upwork, or Giggrabbers, and put your skills to use. If you’re comfortable going out in public, sign up to shop for Shipt, drive for Lyft, or babysit via Care.com.
28) Lastly, if you are owed a tax refund and you make less than $69,000, you can file your taxes for free using IRS Free File.
Being knowledgeable about your money can create a world of confidence and wellness during times of stress and uncertainty. By watching every dollar that comes in and out, you can survive these difficult times and come through on the other side without massive financial problems. If you have questions or need help, shoot me an email.