Today we are going to talk about personal finance and how it can make you a more successful EDM producer! You may be asking, “How does this relate to becoming a successful EDM producer?” It is key.
How many successful people do you know that don’t have any sort of budget, or organization of their money? It’s probably 0. You may need help starting a budget, download your own personal budgeting spreadsheet that I’ve made for you here! – https://enviousaudio.com/budget
How you manage your own personal money, translates into how you will manage your business’ money (before you have to hire an accountant that is).
Step One for Being a Successful EDM Producer: Build a Budget
Start with your essential spending (rent, groceries, utilities, gas) – no eating out and alcohol is NOT included. Those would be considered your discretionary expenses.
You should have a portion of your budget for these things, deprivation in this case is how you splurge when you shouldn’t.
Include what you are saving on a monthly basis (minimum should be ~10% of your monthly income).
Your income should be more than you are spending on a monthly basis, if it isn’t, you need to cut down on your discretionary expenses until it is.
Sometimes opening a “fun account” can help with budgeting if you are notorious for over spending.
Have your discretionary money transferred into this account when you get paid.
If you don’t spend it all, it rolls over. If there is money in this account, you can spend it on whatever you want, whenever you want.
Need help with setting up a budget? Use this spreadsheet that I created for you to use! Download it here – https://mailchi.mp/48e51d702554/budget
Step Two for Being a Successful EDM Producer: Look at Your Debt
Do you have credit cards? Do you know how to use them responsibly aka you pay off the balance every month? If you don’t have any credit cards, it’s time to look for one.
If you do have them, and you are not using them responsibly, it’s time to cut them up and pay them off.
Debt is not bad, having credit cards is not bad, but you have to know how to use them correctly, and responsibly.
You should never be rolling over a balance more than 30% of your credit line ($300 of a $1000 limit). This negatively impacts your credit score, and makes paying off the balance that much harder.
Now, if you go with one of these solutions, that doesn’t mean you can rack up your cards again – that puts you right back where you started.
Step Three for Being a Successful EDM Producer: Emergency Fund
Do you have 3 months of living expenses in cash savings? How about 1 month?
This is KEY to keeping your business afloat when it becomes your sole source of income.
DO NOT QUIT YOUR DAY JOB UNTIL YOU HAVE 3-6 MONTHS OF LIVING EXPENSES SAVED.
Read that again. Especially if you have roommates/other people that depend on your income for half the bills.
If you have someone else supporting you, this doesn’t necessarily apply, however will they be supporting you forever?
Better to start the habit now, and build the savings while your expenses are low (base the amount on what your expenses WOULD be).
Today, with Coronavirus putting so many people out of work for ~6 weeks, I have been seeing so many people wondering how they are going to pay their bills.
If they had at least 1 month of savings, I guarantee they would not be nearly as stressed.
Personally, as soon as I had just $500 in my savings account, I felt a major weight lifted – I could cover an unexpected car repair, or medical expense if needed.
Now remember, this is an EMERGENCY fund, this isn’t the “I want to go do brunch with my friends”, or “Buy spur of the moment festival passes” fund.
These are the first on a long path of stepping stones to having a full personal financial plan.
Along the way there will be insurances (life, health, disability, etc), retirement accounts, personal investment accounts, real estate, and many many more.
If you can nail down and stick to these 3 steps, you are setting yourself up for success, and giving yourself options, and freedom when you need it most.
Need further help with budgeting? Head to this link to download your own budgeting spreadsheet! – https://mailchi.mp/48e51d702554/budget
What are some other great personal finance steps you can take today? Well here are some awesome programs I recommend you get involved in!
Cushion is an amazing application that will negotiate with your banks to get fee’s refunding to you automatically!
This is a no brainer application to use as it will fight fees for you. An automated system that can refund you money, hell yeah!
Follow this link to signup today – https://cushion.ai?ref=ZR6BR
Simple is one of the best online banks out there! The best part about Simple is it allows you to create different expenses and goals.
Instead of having a checking account, you have a “spending” account. That is where all of your money sits that you are allowed to spend.
After allocating your expenses for the month, savings goal, or even setting up a vacation goal.
At the time of your payday, your money will be automatically divided out into your expenses and goals for you. That way, ever time you check your account, you’ll know exactly how much you have to spend right away!
No more doing math on the spot and hoping that you have enough money left over for bills. You’ll know exactly how much money you have to spend at every moment.
One of the best parts is that they have one of the highest interst rates for savings! Nearly 2%!
Follow this link to signup today – https://www.simple.com/