Lack of financial literacy: a hurdle for music creators

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These hurdles involve a lack of financial education, unpredictable expenses, challenges in accessing traditional financial services, dependence on gigs and tours, and the ever-present temptation to overspend.

However, the situation isn't without hope. Music creators can compose a more secure financial future by embracing financial literacy and seeking advice from industry-savvy financial professionals.

Irregularity and unpredictability of income

A prevalent mistake among music creators in handling financial matters is their failure to establish and adhere to a budget. This oversight is particularly detrimental given the irregularity and unpredictability of their income.

Without a comprehensive budget that accounts for both fixed and variable expenses, music creators may find it challenging to monitor their spending, prioritise financial objectives, and allocate resources effectively towards essentials, savings, and investments. This can lead to financial stress and hinder the achievement of long-term financial stability.

Although I haven't worked directly with a music creator to improve their spending habits, some universally applicable strategies include creating a budget, tracking expenses, setting financial goals, prioritising spending, and enhancing financial literacy.

“I have learned that music can be a facet once we diversify our income. Coming into the industry, I wasn’t educated on investments and how to handle money, so I used to spend without thinking. Only after two years did I start looking at investments in and out of entertainment. Unlike other careers, we are not assured of pension funds, etc.

We don’t have a stable income unless we set ourselves up that way. Today, I’m a proud owner of some businesses in and out of entertainment. We, therefore, need to educate ourselves as music creators and understand that this is a sole issue. I’m glad I made these realisations very early in my life. It’s never too late to be financially savvy,” says local rapper and Samro member, Gigi Lamayne.

For music creators, exploring unique investment opportunities and strategies tailored to their industry can be highly beneficial.

Beyond traditional investments like cash, property, shares, and endowments/life assurance, options are more closely aligned with their realm, such as royalties and publishing rights, acquiring shares in music industry companies, engaging in artistic ventures, and investing in education and skills development.

To navigate slower periods in their careers, diversifying income streams is essential. Strategies include teaching and workshops, session work, online content creation, music licensing and sync deals, merchandise sales, brand partnerships, live streams, virtual performances, freelance music production, and composition.

Diversification allows musicians to mitigate reliance on any single revenue source, better navigating the industry's fluctuations and challenges.

Counselling a music creator to find a balance between striving for success in the competitive music industry and ensuring financial stability while preparing for the future involves a multifaceted approach.

Key recommendations include setting realistic goals, diversifying income streams, engaging in budgeting and financial planning, seeking support, and networking.

Achieving this balance demands creativity, discipline, resilience, and strategic planning. By harmonising these elements, music creators can orchestrate a career that resonates with success and ensures financial harmony and stability for years.