10 Key Personal Finance Tips For Content CreatorsJan 05, 2022
Most creators started the same way I did. They hoped to earn money but didn’t take a business mindset.
Things get messy fast when success strikes.
I was earning more from my side hustles than my consulting job when I quit to take it full-time. I was completely unprepared for the admin nightmare I would face. Being an “artist” doesn’t work as an excuse with the tax authorities if your finances aren’t in order.
It’s easy to take home significantly less money than you’ve earned because you don’t understand the rules of your new world. You might be struggling needlessly.
I’m lucky my father is an accountant so I’m going to share some tips to get your finance in order.
#1 Separate accounts ASAP
When I first started making money online, it all went into my personal account. I was naive and thought the amounts were small so it wouldn’t matter. Then the numbers started increasing and fixing my books became a huge deal.
Now I have several bank accounts, some are personal and some are business. Some are in dollars and some are in British pounds. It’s simple for me to track how my money flows.
Don’t procrastinate on this. It will save you so much time later down the line and future you will thank you. Rather than you needing to track everything manually through a spreadsheet, you can look through your bank statements instead.
#2 Underpay yourself
This might sound mad but it might be the smartest tip on this list.
It’s pointless to compare salaried income to entrepreneurial income. The way they are taxed is completely different. I’m based in the UK but the general rules hold across most countries.
My living expenses are well below my revenue. If I were to pay myself all my revenue then it would be decimated by taxes. My money goes far further when left in the business account and reinvested. It’s even more important to pay yourself less when content creation is a side hustle and you have a high-paying main job.
This takes a mindset shift because we’re used to comparing gross salary in the corporate world but what really matters is your net worth when it comes to finances.
#3 Outsource. Outsource. Outsource.
I see so many content creators boast about doing everything themselves. They’ll tell you how smart they are for saving money whilst they work insane hours doing mundane tasks.
In case you missed the title of this section.
Outsource. Outsource. Outsource.
I’m sure your dream is not to spend hours doing repetitive tasks if you are in the creative space. Financially, your aim should be to increase the value of your hours to a level where you can pay others to do the tasks you don’t want to do.
Let’s say, I can coach someone for an hour and charge $1000 then it is nonsense for me to spend three days copying and pasting content to my website. I can pay someone a couple of hundred dollars to do it for me and at the same time make several times that by focusing on the higher-value work.
I’m making this transition this year and I will be announcing hybrid jobs/apprenticeships later this year.
#4 Be careful how open you are
The line between inspirational and plain arrogance is thin.
Stay on the right side of the line.
I see content creators brag about how much money they make without any substance to their advice on how others can do the same. It’s the wild west out there.
In soccer, there’s a phenomenon where a team will sell a player for a record fee. Now all the other teams know their bank balance is overflowing so quote them higher prices! If you boast about how much money you have, don’t be surprised if people raise their rates for you.
On the flip side, if you openly tell everyone you charge $20 per article then you’ll find it hard to raise your rates. Clients will do their due diligence on you and you’ll need to explain how you aren’t ripping them off. Your bargaining power goes.
People are nosey. They want to know how much money you’re making but it doesn’t mean you need to tell them. You need to consider the trade-offs.
#5 Add resilience
If you think you can make a sustainable full-time income from a platform where you are at the mercy of an algorithm then I’ve got bad news for you.
It’s rare for any of the richest content creators to put all their eggs in one basket. If you’re thinking of quitting your job and only creating content then put your resignation letter back in your draw.
Have a think about how it could develop as a wider business. Content creation should be a way to direct people to your core products. The low-hanging fruit for many is how to make money on their platform but it’s the easy option for everyone. This is why I made my writing course free.
You don’t need to know right now what the income stream you own is going to be. You do need to realize none of us is the exception for who the algorithms help forever.
#6 Expense. Expense. Expense.
Expenses are the best friend of a creator’s finances.
Last month I spilled noodles over my laptop and the juices destroyed the insides. The bill to fix it? Around $800.
Yet if I paid this through my personal account when I was an employee, I’d have needed to earn around double to pay it off. This is because taxes took away half of my gross income.
As a business expense, I paid out of top-line revenue so I only needed to earn $800 to pay off $800.
This effectively makes many of my purchases half-price. It’s an extraordinary power and you should look into what’s acceptable for you to expense in your country and use it as much as possible.
#7 Hire companies, not people
The complexity of your finances takes off if you start a payroll.
There’s so much more potential for you to make mistakes with taxes or other employment laws. It’s a headache I don’t want right now.
Yet I told you to outsource so how does this add up? You can hire people through their companies rather than adding them directly to payroll. You pay them for their services rather than becoming their boss.
As a creator with an at times volatile income, it can put you in a difficult position if you promise someone the stability of a salaried role. While it may be good for your ego to say you have employees, there’s a lot of responsibility that comes with it.
It works better for the person you hire too as they can take advantage of many of the tips on this list themselves.
#8 Watch your subscriptions
Your subscriptions can eat away at your profits bit by bit without you even noticing.
There are many tools marketed toward creators and the advertisement algorithm gods have probably already targetted you. You should check you still use all the subscriptions you pay for.
Another lesson often missed is checking you don’t have overlapping subscriptions. You might be able to cancel some products by using others to their full potential.
I use a huge number of tools but the majority are free versions.
#9 Get insured
See #6 for my noodle incident. Be smarter than I was. Get insurance.
(Also try to avoid spilling food on your electronic devices)
When you’ve got bills to pay, you need to understand where your money is going to come from in the future.
Always be on the pessimistic side here as your worst-case scenario should cover your basic expenses. I could earn $20k from YouTube and I could also win the lottery. Neither is relevant for my forecast.
Pay close attention to when you think you’ll launch different income streams and how those months will look. You might find there is a big upfront investment and the resulting income is earned over time. This could put you in a mini-cashflow crisis and it’s better to know this in advance!
The final tip for your forecast is to plan rate rises. A big mistake for creators is undervaluing their skills so they undercharge. My freelancing rates for my first ever job vs after I’ve written a hundred pieces are rightfully different.
Expect to get better at what you do, believe in yourself and you’ll command more money.