Getting into music school is a huge accomplishment; graduating and embarking on your professional life afterwards is an even bigger achievement. But it is not without its cost. Music school tends to be quite expensive to attend. Take Berklee for example, which has its 2016-2017 degree costs totaling to $63,118 per year. Once you graduate, you will be neck-deep in debt.
Just to add to your woes, musicians do not make a lot of money on average. The BLS reports the median pay in 2015 to be just $24.20 per hour. Many musicians work part-time, and the field is growing slowly. This is why many graduate musicians do not even end up working in their chosen field.
So how can you effectively budget your money after graduation so that you can save up toward retirement? It will not be an easy journey, but there is a lot you can do, even at a low income. Here are a few helpful tips and tricks to make the most of a limited income while paying off massive student loans!
1. Start accounting regularly.
The first and most important thing you can do to make sure that you are optimizing your budget is to actually start keeping a budget! Most people never track their expenses, and if they do, they do not have a system for it.
Come up with a systematic way to keep track of how money flows and out of your grasp. You need to figure out 1-if you are in the red or the black, and 2-how you can increase your profitability each month. Once you know where your money is going, you can start cutting unnecessary expenses.
2. Build an emergency fund.
You may feel tempted to start trying to pay your debts off right away when you graduate. This is not actually the best approach though. In fact, before you worry about any other consideration, you need to start stockpiling an emergency fund. How large or small this should be is up to you, but around $1,000 is a good amount.
Make a vow not to touch that money for any reason except dire circumstances, and only if the expense will make a lasting improvement in your circumstances (do not throw it down a black hole). If you do find yourself in a situation where you have to draw on emergency funds to throw down a drain, it is time to make a change (i.e. downsize to a smaller apartment).
3. Pay off as much toward your loans as you can right away.
Once you have your emergency fund set up, start paying off as much as possible on your loans as quickly as you can. This will ultimately save you a lot of money in the form of interest.
4. See if you qualify for any aid.
As a musician, you may be living near or below the poverty threshold. If so, you may want to check into state aid programs which you might qualify for. For example, you may very well be able to get food stamps to help you out, even if you cannot get unemployment compensation.
5. Consider a day job.
Trying to make a living as a musician is very difficult, whether you are trying to become a rock star or a concert pianist. You may have to accept employment in another field while you are trying to get your foot in the door and land that coveted chair in the orchestra hall.
Balancing a day job on top of your music career can be challenging, but it can pay off in more way than one. First of all, you will probably make more money this way. Secondly, you will have more security. If something goes wrong with your music career, you have the day job to fall back on.
Finally, having a day job can add to your emotional well-being. Struggling all the time to make it with something like music where the odds can easily be stacked against you can really take a toll in terms of stress and anxiety. Your day job gives you a psychological buffer.
6. Try a robo-advisor.
Finally, make sure you have the tools to make the most of your income after graduating from music school! One of the smartest moves you can make is to start using a robo-advisor. A robo-advisor can provide you with customized advice for managing your finances at a much lower cost than you would pay a human advisor. Compare Betterment vs. Wealthfront, two of the top robo-advisors.
It isn’t easy to make a living as a musician. Between crippling student loan debts and a low income, you can really suffer trying to save for retirement. But with these tips and tricks on your side, you have a great chance to succeed!