A lot of people think that being a musician is a great career because you’re able to earn by doing what you really love. Yes, that true. Being a musician is a beautiful and rewarding career, but this doesn’t eliminate the fact that musicians also need to go through economic struggles like everyone else. If you’re a musician and plan on growing old, you need to make preparations, particularly on your retirement, if you want to maintain the quality of life that you have today. Here, we will provide you a simple guide to help you get your finances in order and secure your financial future.
Set-up an emergency fund.
No matter your profession, whether you’re a writer, a teacher, or a doctor, it’s always important to have an emergency fund. This is a separate account or another savings that you can quickly access to cover your unexpected expenses, such as job loss, illness, instrument repairs, etc. The amount that you need to save in your own account depends on your preference, but the general rule of thumb is to put at least three to six months’ worth of living expenses in your emergency fund account. People without regular work, such as musicians and freelancers, are usually advised to put more in their emergency accounts since their expenses and earnings are less predictable.
Consider getting insurance.
Similar to emergency fund, insurance is something that people should have. As you already know, all of us are expose to risks every day. We don’t know what will happen to us in the next day, hours, or minute. And worse, some things can happen that we cannot deal financially, so it’s always wise to be prepared. Investing in insurance is a way to get financial support in the event of accidents, losses, or deaths. Here, you only need to pay a small premium and then the insurance company will be responsible for paying the necessary expenses for you. Just keep in mind that the amount covered may vary depending on the policy. Some of the most common types of insurance that most musicians buy are health insurance, disability insurance, car insurance, renters insurance, and life insurance.
Invest for your retirement.
Of course, if you want to save for your future, it’s crucial to set-up your retirement account. This will provide you enough funds to spend during your retirement. Again, as you already know, while musicians earn a great amount of money, their careers are not long-term. They also don’t know when or how their careers will end, so it’s really important to save and invest in order to have something to spend in the future. But before you open a retirement account, you have to determine first your finances to decide how much you need to set aside for your retirement. You can do this by calculating your money manually or using software. For more information, you can check various retirement software systems online and read their reviews. If you’re a musician and running a business, such as a retail business, you can use other software program that can help you make the process of organizing your funds much easier, such as ARO accounting software. For more information, click here.