A Mini Finance Guide for Indie Musicians

[Editors Note: This blog article was written by Michelle Aguilar.]

 

Italian composer Claudio Monteverdi once said, “Music is spiritual. The music business is not.” Whether you’ve been in the industry for years or just starting out, there’s bound to be many bumps in the roads in terms of funding for your career as a musician and ultimately be able to make a living out of it. Hopefully this mini guide can spark new or more ideas to improve the financial facets of being an indie musician.

Set Automated Investments

Whenever you get a paycheck, use it to pay yourself first. Save it in an investment account and make sure to make this process automated. By doing this, you’re making it easier to keep up with your monthly savings. Surveys and research organizations such as Consolidated Credit suggest automated savings and it shouldn’t make you think twice as to why this is a smart idea.

According to President and CEO of Credit Financial Services Innovation, nearly half of Americans say their expenses are equal to or greater than their income and for those 18 to 25 years old, the percentage is over half, up to 54%. The key to keeping automatic investing affordable is to invest directly with a mutual fund company to avoid paying a trade commission each month. There are also some online brokers such as TD Ameritrade that offer hundreds of no-transaction-fee mutual funds in which you can automatically invest with no extra fees.

Put Your Money in a Smart Place

An IRA, or “individual retirement account” allows you huge tax savings on your investments. However, musicians, audio engineer and other creatives are recommended to set up a specific tax-free account called a Roth IRA. With this version, you put in after-tax dollars, and when you take the money out in the end, you don’t have to pay vany taxes on your returns. With ROA, you are set up to double your money every decade or so, just by keeping it in index funds.   Essentially, a Roth ROA provides the benefits of a tax-sheltered retirement account and the flexibility to deal with unexpected costs.

Pay Off Credit Card Debt

Other than contributing to your retirement account, make sure to prioritize paying off your credit card debt above all other financial goals. Whether you’ve had a credit card for a while or not, it’s helpful to build a realistic outlook on credit cards. You can use them for both small or major purchases—but the quicker you pay them off, the quicker you build your credit. If you want to use a credit card to buy music or recording gear you can’t immediately afford, well, you don’t.

Credit cards should be used if you earn a decent amount already to be able to pay them back. An alternative for this is to purchase an instrument/equipment using a loan payment plan. Some manufacturers have leasing programs, so do your research before even thinking about using a loan or your credit card.

Create a Reasonable Budget

When you crate a budget, it allows you to think about your budget less. There is freedom in budgeting. To get started, track your spending for two-three months. There’s a fast and easy way to do this by using digital tools such as mint.com. It’s free, secure and it serves to help you create and track budgets, investments and goals. Once you type in your bank or credit card accounts you can track your past and current spending to see exactly where you’re at financially. By viewing your current spending, you’ll be better able to figure out where most of your spending should be taking place.

Start with a realistic appraisal of what you have been spending on average by category. Then make a budget that reflects this spending but with a slight modification that gears you towards when you want and need to spend on the most. Focus on cutting the things you don’t care about too much and preserving what you spend on the things you do care about.

Find Ways to Earn More Money

In order to do the things we love and to create the things that other people value, we must be able to sustain ourselves. How do we do that? By making more money. Once you start developing a smart and sustainable budget, there will come a point where you realize that you can’t cut your spending any further. Try any of the following tips to not only make more money in a way that makes it easier for your audience.

1. Use Social Media as a Means to Pay

Venmo is a free mobile payment service owned by Paypal which can be used as an app. Create your username and announce before, during, and/or after your show that you accept tips in the form of Venmo. You can even put a tip jar at your merch table with a big sign, “If you liked the show, show us how much! $ or Venmo: ____.”

2. Sync Licensing

Many independent musicians are making six figures a year by getting placed on TV shows, commercials and films. By allowing someone else to use your music you’re reaching a new audience that you probably weren’t even aware of and of course, licensing your music is one of the major ways to make extra revenue.

A sync license gives someone permission to synchronize your music with a visual medium like TV shows, advertisements, movies or video games. When you grant someone a sync license, you aren’t giving up your rights to that song away. You’re basically renting the rights to them for a specific use. You are the primary owner of the copyright however, and you can even license it for a different movie or advertisement if you choose.

3. Session Work

A ‘session musician’ performs a backing track for another musician while onstage or recording in a studio. As a musician, this shouldn’t be work too difficult to find, given that most musicians can play more than one instrument as well.

Do you know any musicians who are getting ready to record and need an extra hand? Do you know anyone who works at a studio? Are there any labels operating in your area? Offer your skills and take on a new project. If not, put yourself out there, whether it’s on Craigslist, social media or other digital/non-digital platforms.


Financial literacy is vital for everyone, especially for entrepreneurs. As soon as you get paid for a gig of any sort, it’s important to be mindful of how you’re going to preserve, sustain and increase that income. Your journey as a musician doesn’t have to simulate the “starving artist” lifestyle. So get your financial thinking caps on!