Financial Freedom for Music Entrepreneurs Part III: How To Manage Your Debt and Spending

If you have taken the last two financial freedom quizzes, you will have a much better sense of your attitude towards

1. your financial literacy and the fear of not knowing how to manage your finances; and

2. your fears around not having enough options to make money as a musician.

You should also have a much better sense of what to do in order to become more comfortable managing your finances, as well as exploring new and different options for making money as a musician.

Now let’s tackle debt and spending.

Here is Part III of the Financial Freedom Quiz. 

Complete the following sentences:

“When it comes to debt, I believe…”

“I deserve…”

“When I spend money, I feel…”

“I spend money because….”


I am continually amazed at how some young musicians fall into debt by spending more than they earn.  So why are you spending money that you do not have? 

A lot of spending is emotional:

Did you have a hard day and felt that you “deserved” that shiny new iPad? 

Do you repeatedly treat yourself to compensate for a lack of satisfaction in other parts of your life?

Do you feel that you deserve only the best and will spend a lot of money even if you cannot afford to pay your bills in full?

The consequences of spending more than you earn are pretty dire. If you finance your purchases via credit card, you will end up with exorbitant late fees and interest, with the result that the item lands costing you much more than the original purchase.  If this is speaking to you, go back and total up the amount of late fees and interest that you have paid on your credit cards.  Subtract the original amount of your purchase from the total that you have paid.  What’s the multiple? How long does it take you to earn that money?

So if you find yourself tuning out the reality when you plunk down your credit card, here are a few things that you can do:

1.    Get real about your financial situation.  Examine your spending habits and add up your credit card interest and penalties.

2.    The next time you are tempted to make a big purchase, take a few moments to think why you are making this purchase.  If you are “treating” yourself, find another way to do so that does not involve spending money that you do not have.
3.    Think about your financial goals.  What are the benefits of not making this purchase?  How about financial freedom and security?  What about saving?  What else can you put the money to?


Even if you do not amass credit card debt, your spending habits can end up costing you a lot of money that you could be putting to much better use.

One of my freelance musician clients who frequently tours abroad spent a huge amount of money on her cell phone bills.  We first worked on her general attitude towards financial literacy, which helped her to take the first steps of examining her expenses.  That’s when she realized how much she was spending on her cell phone.  Her spending was a function of two different factors:

1.  She did not realize how quickly roaming charges added up (a financial fact)
2.  She felt the emotional need to keep in touch with people back home and did not want to wait until she was in a Wi-Fi spot to send and return emails (an emotional reaction).

With a little knowledge on how the cell phone charges accumulated and an insight that it was okay to wait to respond to emails, she quickly reduced her cellphone bills. She felt great that she was able to tackle this problem so successfully and is very motivated to stay on top of her cellphone bills.

For another freelance musician client, her biggest black hole was spending money on drinks and dinner with colleagues.  She was afraid that by saying no to going out with her friends after each rehearsal and concert,  she would be missing out on some big opportunity, as well as a fear that if she did not go, she would never be asked again.  The results were that she was spending a lot of money and was not getting enough sleep, which had a negative impact on her productivity. 

We did the reality check:

How true are these beliefs?

She realized that she did not have to go out with her friends every time.  Instead, she would be more strategic about when to go for drinks and dinner and limit these occasions to times when she would be more likely to expand her network.

As for the feeling that saying no would end her social life, she learned that she could say no without apology by explaining to her friends that she needed to get up early the next day and that she would be happy to join them the next time.  What she learned from this exercise is how to set boundaries and say no when other people ask you to do things that do not tie into your values or goals.  In short, saying no to her friends enabled her to say yes to herself.

So look at your spending habits and your attitudes around spending and debt.  There is a huge opportunity to clean up your financial act!

As any good entrepreneur knows, it’s important to face your challenges. Why not start off the new year on a solid financial footing and make it a goal to breathe a sigh of relief around your money?