Financial Planning for Songwriters

Professional songwriters and musicians can earn more money today than ever before. However, that doesn't automatically mean they're going to be set for life. We've all seen the hard-luck stories of big stars who somehow wound up penniless after a series of setbacks. Over the years, how many top-selling artists have declared bankruptcy — sometimes more than once — to manage debts that exceed their incomes?

Why It's Important

Financial literacy is more than just balancing one’s checkbook. It’s having the knowledge and skills to manage one’s personal finances — budgeting, saving, knowing how and when to use credit, and even planning for retirement.

It means managing your money, so it doesn’t manage you. Many people, including artists and songwriters, find themselves in financial trouble because they’ve never been taught how to.

While some top artists or hit songwriters may seem like they’re set for life, many have an inconsistent income. It typically comes in bulk early on in their career, then later in chunks that are often unpredictable. Inconsistent income requires consistent planning.  

When You Don't Plan Ahead

All too often, we fail to save money in a “rainy day” or emergency fund. Saving enough money to pay our bills while we’re waiting for the agent to book the tour, when we’re waiting on a sync licensing paycheck to arrive, or worse, when the record label postpones the album release or drops the band, isn't always enough. Let’s be honest, few of us enjoy saving money. We like spending it!

In a career marked by extreme lows and incredible highs, if we want to realize a different financial outcome than those experienced by the artists that have come before us who have lost it all, we must train ourselves to develop good savings habits.

This requires a mind shift from spending to saving, and it takes incredible self-control and discipline. After all, very few of us get the same level of excitement from saving as we do from spending our money. 

Be A Proactive Planner

Don’t overlook the fact that with the absence of financial literacy, or financial self-discipline, we often make poor financial decisions that multiply and can have an adverse effect not only on our financial, but our physical health. Proactively planning for our future needs and expenses, and making sure we have protections in place to guard against the risks that often suddenly happen when we can least afford them, is critical to living a life free of financial stress, instability, and uncertainty.

As creative artists, it is so important to start early and to take the steps necessary to put the building blocks in place to create a solid foundation on which to build upon. If you fail to plan, you can plan on failing.  

Provided by Shawn Kilmurray, a financial representative with Fortis Lux Financial, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). California insurance license number: 0L72749