3 Necessary Financial Tips For Musicians
Playing a show where you only get paid in beer (or a hearty handshake) is never a great feeling, but at least you go home at the end of the night knowing that everyone is fair and square when it comes to money.
The flipside is being stoked on getting to take home some cash, but not exactly knowing where it goes or who it goes to. Should you put it back into the band? Who holds onto it? Should everyone get a cut? What about the bass player who just changed the oil on the van? It is the band version of splitting a check at a restaurant, and can be a whole new layer of drama that you don’t need. So what to do? Here are your options.
The Even Split
This is both the easiest and the riskiest because band members can quickly start asking what is actually even. Sure, it’s nice to go home with some dollars in your pocket to spend as you wish, but what if you dropped money on merch, or gas or you bought the 12-pack of beer at practice the other night? This is the quickest way to make band members start to resent each other, even if you do get the instant gratification of making money off your hobby. The best way to square this is to have everyone agree what’s a “band expense” and what is being spent as friends just having a good time. Set the ground rules and no one will (rightfully) feel cheated.
Make a Band Member the Bank
This works great… if you can trust the band member. At every show you calculate merch and door sales and then have someone from the band stow away the cash. Then when it’s time to buy more shirts, fix the van, pay for practice beers or whatever, they are the ones you can point to. But, and this responsibility should be on the bank, there has to be an accurate tally of how much money is coming in and going out. Like a checkbook, all the totals need to be made clear with the band. Write them somewhere at the space or put it in a group email. Too often the member-turned-bank ends up treating this money like a loan and when it’s time to buy some new back patches, their pockets are empty.
Form an LLC
Okay, no one who is actually going to do this needs to be told to do so. You are obviously making more than a couple hundred bucks every few weeks and are probably dealing with lawyers and contracts and don’t need to threaten your drummer every month to get practice space rent. Still, if for some reason you would like to write checks that have your band name on them and muddle through some extra tax work at the end of the year, be our guest.
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