123. The Financial Scale and How to Use it

🎙 Episode Title: S5 E8 – The Financial Scale and How to Use It

💰 Overview:
In this episode, we introduce The Financial Scale—a 7-note system designed to help musicians grow wealth the same way they build musical skill: through fundamentals, repetition, and intention. Just like mastering a new scale on your instrument, mastering your finances starts with learning the notes and practicing how they work together. Chris Webb and Dave Tamkin walk through each "note" of the Financial Scale—A through G—and explain how applying these steps can harmonize your creative and financial life. 🎼 The Financial Scale:

• A – Advance: Always stay one month ahead in your business account.
• B – Budget: Know your fixed, variable, and irregular expenses.
• C – Clarity: Get your full financial picture and automate where possible.
• D – Debt: Eliminate bad debt to free up your income.
• E – Emergency Fund: Save 2–5 months of expenses to stay stable.
• F – Forecast: Plan and track monthly/yearly financial goals.
• G – Growth: Dream big, plan long-term, and invest in your future.

🔑 Key Takeaway:
Combining these notes into a system creates the real magic. Whether you're just starting out or already generating income, this scale helps musicians create structure, reduce stress, and amplify their impact. 💬 Quote of the Episode: “Wealth consists not in having enormous possessions, but in having few wants.” – Epictetus 🎧

Special Feature:
Dave highlights The Rising Artist Foundation, supporting young musicians in creating sustainable and empowered careers. Learn more 🚀

 Action Step:
Start with the note that fits your current stage—whether it’s building a budget or knocking out debt—and begin practicing the scale today. Need guidance? Reach out for a one-on-one consultation at MusiciansTipJar.com.

📢 Support the Show:
If this episode helped you, please rate and review us on your favorite podcast app, subscribe on YouTube, and share it with a fellow musician.

Intro & Outro Music Donated by: The Magi https://www.themagimusic.com 

Intro Read by: David “DJ” Lee of The Magi

https://soundcloud.com/rockababyrock 

Pictures by: Kit Chalberg https://kitchalberg.com/

Become a supporter of this podcast: https://www.spreaker.com/podcast/musicians-tip-jar--4698023/support.

Episode Transcript

Speaker 1 (00:01):
Welcome to the show that explores the methods and strategies
on rocking the financial side of your music business. With
over forty years combined experience, here are your hosts, Chris
Webb and Dave Tamkin.

Speaker 2 (00:15):
Welcome to Musicians Tip Jaw, where we talk about musicians
and money. But we believe that growing your wealth is
a lot like watering your plants. It requires faith in
the future along with deliberate care and attention. I'm Chris Webb,
joined by my co host and someone who wets his
plants regularly, Dave Tampkin.

Speaker 3 (00:35):
Do you ever ship your plants? People think it'd be
harder to ship your plans, but I'm telling you it's
really easy to do. Give it enough moisture for the
trip and send them to someone you love. Everyone loves
it when you ship your.

Speaker 2 (00:52):
Plants, especially when you have like a membership, right yea.
It is one thing to know how to play a scale.
It is another thing entirely to actually use that scale
in a way that sounds musical. Today, we go over
our financial scale and the basics that it has as
its functions, and then will show you the most effective

(01:15):
way that we have found to actually apply it to
your life and to your music business. Today's quote comes
from epictitis. Wealth consists not of having great possessions, but
having few wants. I love that.

Speaker 3 (01:32):
What's that bag again?

Speaker 2 (01:35):
Epictitis epictecus my tongue has now died.

Speaker 3 (01:41):
This week's nonprofit is the Rising Artists Foundation. The Rising
Artist Foundation elevates broad spectrums of voices in American music.
They foster creative and professional growth in the early stages
of a musician's career to nurture uncompromising artistic expression. They
envision in America in which the music industry is demystified, diversified,

(02:02):
and accessible to talented people both on stage and behind
the scenes. The Rising Artists Foundation foresees a system where
new musicians are healthy, educated, and financially stable, with agency
over their craft and careers unnecessary pause after stable. Learn
more at Risinartists Foundation dot org. If you find this

(02:25):
information useful, everyone, please rate and subscribe to the podcast
and also slam that like button through on YouTube so
we can help keep you up on the finance side
of your music business.

Speaker 2 (02:35):
Just as with playing a scale, any scale, it is
in the way you play those notes that is an
instrumental part of making and creating beautiful music. When the
financial scale is used, which is our musical scale turned
finance education, it can create beautiful harmony. We have a

(02:56):
unique set of rules in the music business, and it
only makes sense that our easiest approach to finance would
be through our understanding of music. We already have advanced
systems of how we write a song, how we create
and produce something, and how we give a great performance.
These are the fundamentals of managing your finances as an artist.

(03:18):
Mastering the fundamentals causes there to be less resistance in
releasing the greatness that is in you and that you
have to offer, and that's our goal here give you
the fundamentals in this scale to give you the greatest
ability to release all that you have. We have discussed

(03:39):
this before, but we felt like it was time, with
all the updates and all the people that have gone
through this program now, to revisit this again. Update a
few things and make sure that everyone understands how powerful
this scale can be. Let's go.

Speaker 3 (04:07):
I've been watching enough Andy Cohen Late Night with Anne
that you know having a secret word that we say
flash down screen every time you say it for each
episode's unique. Someone's got to do a little sip of
their coffee, little shot of whatever they have in front
of them. And I think this episode's gonna be fundamentals. Really,

(04:29):
I think every time we hear the word fundamentals, we're
gonna have to just do a little sip of whatever
you have in front of you.

Speaker 2 (04:35):
The thing is, I just don't think people listen to
podcasts when they're drinking alcohol.

Speaker 3 (04:40):
I'd be surprised. I forget many of the podcasts I
listen to Chris because I am just slamming all every
time I listen to podcasts, something I do it's a tradition.
And then that way, when people ask me what was
that about, I don't have to go into this diet
try with what I've learned, I can just say I
don't remember.

Speaker 2 (04:59):
Like all Western music scales, the financial scale is made
up of seven notes that make up the ability to
make your money sing for you. And a lot of
times when we're introducing this scale, it takes a little
while for people to realize that we're actually trying to
mimic it off a musical scale. It's not like we
found any new notes that didn't exist before, or that

(05:22):
we try to like manipulate the understanding of actual Western
music theory. What we have done here is try to
create a system in which we all understand as musicians
and simplify how we can keep our finances on track
doing what we need to do well.

Speaker 3 (05:37):
Those are the fundamentals, Chris. They understand the fundamentals, they
won't not anymore.

Speaker 2 (05:44):
So let's first just go through each of the seven
notes in the financial scale. So we start with A
for advance, B for budget, C for clarity, D for debt,
E emergency fund, F forecast, and G for growth. And
that's it. All you need to do is follow those

(06:04):
seven notes and learn how to play them right, and
all of a sudden you'll find out that your wealth
will grow exponentially.

Speaker 3 (06:12):
That's all we had to know. That was a great podcast, Chris.

Speaker 2 (06:15):
We'll see you next time. Let's break these down a
little bit. As we've said before, we've talked about this
a couple times over the years in the podcast, but
we've really been fine tuning a lot of things. And
after a few years of teaching the course at the
University of Colorado, Denver and helping clients with their finances.

(06:36):
Using this scale, we are now at a point where
I think we really wanted to touch on it all
again and make sure we updated some things and clarified
on some things that might have been less clear before.
So let's start with the first note. A for advance.
This is simply put as one month's expense is always
ahead of what's going on in your business checking account

(06:58):
where all your busines this money flows. There is always
one month's expenses still in the account at the end
of each month. This, in our way, is like giving
yourself an advance. We want you to be the record
label for yourself, and just like a record label invests
in you because it believes in you, you are going

(07:20):
to invest in yourself because you have to be the
one who believes in yourself the most. For example, if
your monthly expenses from your budget indicate that you need
five thousand dollars each month to cover your expenses, then
that number is how much should still be left over
at the end of each month as you head into
the next month. Think of it as getting an advance

(07:41):
at the end of each month, and then after you
by receiving it, you feel confident that your bills will
be covered while you focus on more the most important
things like writing, rehearsing, recording, performing, and all those elements
that allow you to showcase your best as an artist.

Speaker 3 (07:57):
You know, another correlation is in you first graduate college
and you're getting your own apartment, you haven't found a
job yet. You need to know how much money you
need in that account to cover X amount of months
of front So you're doing this. You're paying yours futureself first,
but you're also making sure you have a roof over
your head so that those expenses are covered. And the

(08:21):
fastest way to do that is pick a number your goal.
I know you said five thousand, but say it's one
thousand dollars. If you don't feel like you can get
to that in the first month. Sometimes to get to
that goal, you can break up a goal into quadrants.
Say it's five thousand or whatever. That maybe set it
for a thousand. Get to that thousand as fast as

(08:42):
you can, and you know that's a you know, maybe
a fourth of what you need to hit. As soon
as you hit that and you have extra gig set
might come in that you weren't expecting. You have a
good merch day, put that money right towards your advance,
and then as soon as you hit that no that
your ultimate goal is five thousand. See if you can

(09:03):
double your first goal. I made it to this thousand
right away. Let's get to two thousand with the ultimate goal,
because sometimes if you can take bytes out of a goal,
it's easier to see, you know, bring the final goal
to fruition.

Speaker 2 (09:18):
And we'll talk a little bit more about how to
apply these things here at the end. But it also
should be said that most people can achieve this number
within three to six months. You basically say I'm going
to have this fully funded this one month, fully funded
by this date, and then you dissect how you're going
to do that. Sometimes I think when you set a date,

(09:40):
just like an assignment, if you have a due date,
magical things happen in order to get you there faster.
People need to get past that limited belief first, Like
they can't get there until someone says, this is when
it's due.

Speaker 3 (09:55):
Yeah, yeah, like so many other things we do in
our life that aren't as important as this totally.

Speaker 2 (10:02):
Yeah. Our second note in the financial scale is B
for budget, and this really refers to your monthly bills
and expenses. This does not cover your income. Using the
MTJ forecasting tool, which you can get for free on
musicians tipcar dot com, it's a simple way for you
to enter all your monthly expenses and keep track of

(10:24):
what your hard earned income is doing. It is also
giving you a solution to the plan. The less frequent stuff,
the less frequent costs like expensive gear and car insurance,
that things that may not always come monthly but can
but are guaranteed to come. We also refer to these

(10:45):
as inevitables. We also leave a place for you to
expand on bigger goals like album marketing, campaigns and tour budgeting.
So everything there is also included in that budget and
your monthly expenses. Everyone must budget monthly, at least until
you're worth over a few million dollars. Then maybe this
approach will change.

Speaker 3 (11:06):
There you go again, Chris, we're just talking about one
thousand dollars to five thousand dollars. Now I'm going to
have to break down a million dollars.

Speaker 2 (11:15):
I said a few million and go. The other thing
we'll say about budgeting before we move past it is
that everyone has probably tried at this, whether or not
you're one of those that have successfully maintained it. What
we aim to do here is not only gain control
in the knowledge of and awareness of what you're spending,

(11:36):
but also keep you consistently tracking it. So those are
both things that for some people maybe they've tried and
failed and so they have negative connotation towards this, but
we hope to change that and help you get onto
something that you can stick with.

Speaker 3 (11:49):
The difference that we bring to this and something I
learned from you very early on was it's very easy
when you start budgeting to start looking at how much
you're bringing it in and then look at your expenses.
And with this, you're looking at your expenses first, you're
looking at your fixed and your variable costs each month,

(12:10):
which once you do it this way, you're driven to
make sure you can cover those. Where I think when
I first started budgeting that it's like you get this
for a feeling of look how much money I have
coming in. When you're like, all right, I'm going to
go have a couple of coffee and some lunch, you
kind of stop the process there because you could kind

(12:32):
of summarize what's coming in and you're like, oh, I
got that covered.

Speaker 2 (12:36):
The next note will be see for clarity. This was
the note that I think we've updated the most. I
think the clarity on clarity has really gone a long way.
And so here's my best summary of what clarity represents
in the financial scale. First of all, it's understanding where
you stand financially in the bigger picture of things, but

(12:58):
also seeing all of the things that are occurring within
your financial system and how they're all functioning in a
more clear way. Because the bottom line to all this
is that the knowledge, the awareness is where you gain
the power. With all of this money only does what
you tell it to do, and by not telling it
to do anything, you are telling it to just go

(13:19):
ahead and leave. And so what we're doing here is
getting clarity on all these things, and then within that
we try to set a lot of stuff onto autopilot
and create all these systems that kind of function on
their own because a lot of times you think it's
going to take so much time to keep maintaining this system.
But the truth is by autopiloting so many of these things,

(13:43):
all your savings accounts and your debts that go to bills,
your bill pay, your investments, budget tracking, we have ways
to do all these things automatically that an AI is
certainly making all this even easier these days, but knowing
where all that is going before it happens, maintain anything
that needs to be adjusted. That is really what clarity is.

Speaker 3 (14:04):
And clarity gives you that confidence not only to feel
comfortable in your finances, but even more comfortable being creative
and taking away that anxiety. So you couldn't put that
focus on your passions and what makes you wake up
every day to bring something new to the world. So
I think we should find clarity into confidence. We have

(14:27):
to come up with something like that sees the C factor.

Speaker 2 (14:32):
It could be like a C double sharp clarity, and
then confidence is the double shark, which but actually makes
a D. But so anyways, let's not screw it up
while we're recording it. The next one is D for debt,
which this is a massive conversation that we have all

(14:55):
the time with people and one of the ones that
drums up a lot of them, perhaps the most drama
of all these notes. So our stance with this, and
this isn't just us, right, this is most people that
work in the finance world say this exact same thing,
and a lot of people that have gained a lot

(15:16):
of success in this world. Also say this, So this
isn't just us, right, So don't get mad at us
for this reality. But you need to get rid of
all bad debt, and then you need to maintain yourself
staying out of all bad debt. And the more you
consistently do that, the faster everything else happens. So we
are defining bad debt as debt that does not increase

(15:39):
your net worth like asset's do. These are things like
credit card debt, car payments, student loan debt, and personal debt.
Staying in these types of debt costs you so many
other ways besides just the payment. It stops you from
all this money that could be used for much better

(16:01):
things like growing your business and investing in your future.
And we do understand that sometimes people are in a
position where they have to use debt to purchase something
something for their business, for example, that they need in
order to take on a new opportunity, and that will
in turn then grow their business and make the money.
But I would argue that more often I go out

(16:22):
there talking to people and I see that a lot
of them are burning holes in their pockets purchasing things
that they don't actually really need in order to do
the goals that they have. The freedom that you gain
from having no bad debt and what it provides you
cannot be overstated.

Speaker 3 (16:41):
Have you ever had a gig that canceled a lot
on you? I think maybe a reoccurring weekly gig or
a monthly gig that more often than not, they'll be like, sorry,
I'm gonna have to move it or I'm going to
have to cancel. Sure, definitely, I mean that is the
same thing that you're just doing to yourself. That it's
money that you depend on that the credit card is

(17:02):
just taking away from you every month. So regardless of
that percentage, I mean, what would you do with that
gig that you could not depend on? What would you
do with that band number that kept canceling all the time,
and then therefore the show was canceled or eventually you
were going to lose the show because you pitched it
someway and they're like, we're not interested anymore. It's more

(17:26):
of a headache. But yet people still see that that
percentage go out of their pockets every month, and they're like,
I'll take care of it next month. I'll take care
of it next month, but you wouldn't do that for
your career.

Speaker 2 (17:38):
Yeah, the statistics right now about that debt, just looking
quickly on Google, the average household debt of just credit
cards is almost seven thousand dollars. That's the average, so
obviously a lot of people are much higher. And what
you look at is that the average person that makes

(17:58):
less money tends to have a higher amount of credit
card debt in ratio to their income. And the other
thing about that is they also have car payments, right,
they also have student loan payments. And this is such
a tough place to be in and I empathize with
people because both Dave and I we both have been
through that. We have been deeply in debt. I have

(18:20):
had to claim bankruptcy. I understand that struggle of feeling
stuck and not able to get free from it. But
the amount of benefit that you'll get once you dig
your way out of there, calaw your way out of there,
and we can talk about how to call your way
out of there, but that's not really what this podcast
is for. But it's just just to put that hope

(18:40):
in you that this is possible, that everyone can do this,
and then the other end of that is what is
good debt, right, because there is such a thing. Right,
good debt is are there things that make you money?
Right that things that the money helps create more money,
Things like real estate often are good debt. Creating songs, right,

(19:02):
songs are assets. They are what make and drive this
music industry at the center, Studio gear can actually be
good debt if it's making you money by being used,
but also can hold its value, right, same with good instruments, right.
Good instruments can hold their value and also can cause
you to sound better and make better music, increasing your

(19:24):
likelihood of success your talent. I think your talent is
also something you should consider a good investment, right. And
it's same with an education. Right. Those are powerful things
to put money into, but to stay into debt for
them is not the same thing. So it's a little

(19:44):
delicate when it comes to student loan debt, for example.
But I do think that investing in your education is
a good thing to do if you can pay for it,
But I don't think it's a good debt. The next
one on our list is E for emergency fund. We
shoot for a fully emergency fund of having two to
five months of your monthly expenses sitting in a separate
savings account high yield savings account. We say two minimum

(20:08):
as we balance this with your advance in your checking account,
so that you could make at least three months total
if everything's shut down, five months is best. As with
the advance, this could help you survive up to a
half a year in a worst case scenario. And I
don't necessarily think that musicians need to go much over

(20:29):
that because we tend to have multiple sources of income
and usually not all of them will dry up simultaneously.
This is of course an end goal for your emergency
fund two, so it does take some time, but it
is something that you want to put your energy into
and have a long term plan for.

Speaker 3 (20:47):
Again, much like advance, I think the stability of having
having made sure that you're taken care of for when
things go south, it's just empowers artistic freedom, and that's
what we're trying to do here with the musician's tip.
JAR is not only making sure you feel financially secure,
but artistically secure as well. And like you said, over time,

(21:13):
So make that automatic payment something small, start building it
up as fast as you can. Break it up into
small goals, you have to double them and before you
know it, you can breathe a little bit easier. And
again with along with clarity, have that confidence of knowing
what your money is doing for you.

Speaker 2 (21:33):
And just to throw in the law of attraction stuff
in here too, is that one thing that I feel
like has held true for us, and I've heard this
from many other people, is that once you have this
emergency fund, you somehow just barely ever need it. It
just it just keeps growing because it's in a highield
Zav's account, so it's its own little investment of making
some money there too. But for some reason, it's just

(21:53):
about once you have the money, it's it's like less
bad things happen, you know, I don't know, I don't
know what it is, but it does seem to hold
true for a lot of people.

Speaker 3 (22:03):
Well, think about how positive you feel you know, less
things happen, when less bad things happen, when you're walking
around feeling pretty good.

Speaker 2 (22:13):
Well. Our next note on the scale is forecast. This
is f for forecast. This is about thinking short term.
We'd like to think about this about one year of planning.
We use the MTJA forecasting tool to lay out exactly
what your goals are for the year and each month,
and then you line up those with your budget and expenses.

(22:35):
So this is planning out all your different income streams
and how much each of them are predicted to make
each month one year out. And this can feel hard
the first year you do this, but after you've done
this once, it's it's generally pretty easy to kind of
use the last one and do some sort of increase
of a percentage that you think you can increase those.
It also tells you where you are doing really well

(22:58):
and where you might need to put more energy. So
forecasting is a critical part of any successful business, but
really something that is underutilized in the music community.

Speaker 3 (23:09):
And if you're a gigging musician, you're already doing this
with gigs. I mean, how many places are booking out
less than a year after the pandemic pandemic it was crazy.
You couldn't get a gig for a year and a half,
almost two. So if you take all your income streams
and forecast what's coming in with how you've already been

(23:30):
doing it like you have with your gigs and throwing
monetary value onto all those, it should be one of
the easiest, I believe.

Speaker 2 (23:37):
And it sure feels good to know what's coming and
it helps you be a little more confident. Again, this
is all about that clarity, but it helps you be
a little bit more confident in what's happening in your
business and where it's headed. And then the last note
is growth, G for growth, and this is more thinking
that long term beyond that one year, if you and
your business are going to grow, you must spend time

(24:00):
I'm dreaming bigger and making plans and how you actually
want to accomplish those big dreams. And as we have
said before, a dream without a plan is just a wish.
Growth is your business plan, yes, but it is also
about that long term vision of what happens after you're
done with your career or at least wanting to transition

(24:21):
out of doing all of these things that you're doing
to make money in the music industry. So it's about
breaking down steps and helping you achieve those dreams that
are going to be twenty some or less depending where
age you are. But making those plans for those retirement plans.

Speaker 3 (24:37):
And growth planning does not have to be rigid. I
believe you said this last week. We talked about, you know,
bending not breaking, and there's so many little nuances to
every note in this scale that you're going to grow quickly.
You're going to change. Things are going to happen fast.
Like you said, once you start manifesting these ideas into

(24:58):
fruition that you're going to be making money. And maybe
it's not the way you thought it was going to be.
So feel free to let this growth bend and have
goals kind of change as you're moving forward. It doesn't
have to be the same every month. You just have
to pay attention to it every month to say, hey,

(25:18):
this is a great foundation to grow a career in
two years to come.

Speaker 2 (25:22):
So those are the seven notes and their basic function.
So when you use this scale correctly and smoothly, it
will create amazing results. We are living proof of this
as well as many of our listeners, and I see
it working more and more with musicians as we get
it out there for more to try and sure. There
is a learning curve, and learning and mastering a new
scale definitely takes time, right, It can take practice, It

(25:46):
can take willingness to humble yourself to learn something new
and make changes to use any of this effectively. You
also have to have a mindset that you actually think
this is possible. Right. We say this all the time,
but if you don't believe that you can do this,
you are right. So the desire and the drive to

(26:06):
achieve your ambitions is the only way you make any
of this possible. We thought we'd break down what we
recommend in the order of how you do this, and
we'll just do this quickly. This doesn't need to go
to in depth. But making these notes work for you
is about how you put them together. When we made
this course, it was a big project to create all

(26:30):
of the details, and you realize how many things are
factors and how much of this is at play in
order for it to work for a lot of people.
It is when you use these together, when you use
these seven notes together, that it creates these amazing results.
Just as playing a scale in order doesn't necessarily make
it a beautiful sound, we sometimes have to rearrange the

(26:51):
notes a little bit depending on your situation to make
your melodies a little nicer. So starting with the first
note that we recommend is actually be for budget. The
very first thing you want to do is create a budget.
Create the budget so that you can see what your
monthly expenses are. This is the first note in getting
your money under control and allows you to gain so

(27:12):
much more perspective of what life is costing you and
how much that is per month. This includes everything you
pay and for memberships, for living expenses, anything that you
pay less common to all gets put on this list
for your budget.

Speaker 3 (27:28):
Mixture to categorize those to make it simple, find your
fixed expenses, your variable, your irregular expenses, and then regularly
revise those. How often would you say you take a
look at your budget?

Speaker 2 (27:43):
I mean I multiple times a month. It's usually at
the beginning of the month and the end of the
month is for sure, because our first making sure everything's
set right because it changes, and then at the end
of the month to see how I did. But somewhere
in the middle too. A few times.

Speaker 3 (27:57):
When we were talking about irregular expense at the FOCO,
we're saying, maybe you should wait on that expense of
buying that new guitar, and that one guy you never
wait in buying a new guitar.

Speaker 2 (28:10):
You never a fixed expense. Well after you've gotten that
budget run through, next you take the total of your
monthly budget and you use that to create your advance number. So,
for example, if your monthly budget is only two thousand
dollars a month, then your advance needs to be two

(28:31):
thousand dollars and that will sit in your checking account
as a cushion that allows you to focus on all
the goals you have for that month without being worried
that if a gig does get canceled that it's not
going to completely scratch your record.

Speaker 3 (28:44):
I separate this in a separate checking account. I don't
know if you do, but I do the same thing
when I first started, especially when like I know Chase.
You know, for our business account you have to have
more than two grand before they start charging you. But
if you have a free checking account, I mean I
had my advance in one account and then had money
trickle into that so that I knew where that stood.

(29:06):
I did the same for my emergency fund. Ready to go?
Do you do the same?

Speaker 2 (29:10):
Yeah? So, because my monthly withdrawal from my business is
fixed like a salary, I always have my one month's
advance in the account, and then I have a transfer
over the salary amount on top of that, so that
at the end of the month, the salary pretty much

(29:30):
equals the monthly expenses. I pretty much don't take any
more out than I need from my business, So once
that's gone, it should always end up right back at
my pretty much right at that advance, so I can
still see that it's there.

Speaker 3 (29:45):
You know, it's been two weeks since we talked about escorp,
But has that been on your mind a lot lately?
Because you, yeah, said you have it set up that
way totally.

Speaker 2 (29:53):
You know, I pretty much like I said, I am
functioning everything as an es corp without the label. I'm
not officially an escort, but I have started moving forward
on making that switch.

Speaker 3 (30:03):
No one likes slabels Chris Fair.

Speaker 2 (30:07):
And then the next note, the third note, after you've
gotten your budget and then you've created your advance, at
least got the target for what your advance is going
to be. Then after that advance is put in place,
and after in once you get your advance is when
you start tackling this next one. Once the advance is completed,
you move on to tackle your d for debt. Now

(30:30):
you know that your monthly expenses are set, you know
that your advance is in place, so you can put
all the extra time and energy into getting rid of
all that bad debt, basically everything but your mortgage if
you have one, and you can list these out on
a single page and then knock it out. Knock that
shit out, get rid of it, all of it, don't
add any new debt, and pay off whatever you can

(30:53):
as fast as possible. There's a couple ways to do that,
which we don't really need to go into too much,
but I liked the snowball effect that Dave Ramsey teaches.
So whichever one of these approaches that works for you,
you should just do it and follow through with it.

Speaker 3 (31:10):
So when you're talking about snowballing, one way to do
it is take the smallest account you have, with that
smallest that you owe, getting rid of that right away,
and then you move on to your next smallest account.
Or you can go after the one with the highest
interest rate, get that taken care of, and then move
on to the next one.

Speaker 2 (31:29):
Well, yeah, I mean I like both those approached because
they both have their own benefit, and I think that
studies are shown that they both pretty much end up
about the same speed. It's more about which one you'll
stick with, right. We have such a psychological thing and
what we want. I like the quick win. I like
paying off the small one first and having it gone.
But whatever, Yeah, I mean what we want to see

(31:50):
is that that musicians are the smartest people, the smartest entrepreneurs,
and we understand the power of not having any debt.
And the more that we can bread that truth in
the music community, I think, the more powerful will all
be as a music community. So obviously, DA getting where
your debt's going to take a lot of time, so

(32:10):
this next one can happen somewhat simultaneously while you're still
working on that. So the next note is see for clarity,
and this is when you become the leader of your
money right, your money banned, you can be the manager right.
Clarity is such a powerful stage to stand on and
it gives you confidence and a vision and an ability

(32:31):
to understand what you're working on and what's working and
what's not working. So again, using our MTJ forecasting tool,
which you can get at musicians tip chart dot com
for free, you can lay out all of your income
streams and how much they're bringing in. You can see
all of that clearly. You can then set up all
these automatic transfers for every area. You can whether that's

(32:53):
transferring over your income each month from your business to
your personal account, whether that's transferring savings into different savings goals,
whether that's having your budget adjust based on the quarter
in which you are living in because some quarters will
cost more and some will cost less because of the

(33:13):
time of year. All of that is about getting it
to be as much automated as possible so that you
don't have to spend as much time figuring that stuff
out each month. This is also where we talk about
getting an app that helps you track your spending. For US,
I like to use money Monarch. I think that's been

(33:34):
the best one that we found since Mint disappeared on us,
and it does cost a little bit per year, but
the amount of tools it provides works really well. Easy
to keep your budget in line with your MTJ forecasting
tool and make sure that the two match, and helps
you keep track of all the spending from all of

(33:55):
your different accounts without having to look at each one individually.
So then there's the last three notes, emergency fund, forecasting
and growth. These do sort of happen simultaneously because you
certainly want to be working towards your emergency fund. The
emergency fund like we said, should be a total of
five months, so that with your advance, it makes half

(34:17):
a year of time that you could be covered in
emergency situations. It also is one of those things where
you can't start working on your emergency fund until you've
paid off your debt. You really want to get rid
of the debt first, and if you're trying to save
an emergency fund and pay off debt, it can be
really hard to make any headway on either one. So
we recommend you paying off your debt first before you

(34:38):
hit the emergency fund. We know that your advance is
in place so that we have some cushion while you're
getting rid of your debt. So for everyone that's different
how long that part is going to take. But the
forecasting this note should be something that you are ready
to go on the moment you start working on this scale,
because it's projecting how much you plan on making from

(34:59):
what incomes streams, and then what your goals are for
that calendar year to increase your income amount. Much of
this note can also be achieved by utilizing our forecasting
tool and making sure that you are aware of the
different seasons of your types of income streams and hitting
those numbers that you have each month and then tracking

(35:19):
them accurately, and then looking the whole year out, knowing
what it's going to be like by the time you
hit that end of the year. You'll also be able
to see how much money you'll have extra after all
is done, and that can be a really motivating thing,
because you might end up with so much money at
the end of the year that you might be able
to fully fund that emergency fund or pay off the
rest of that debt just by being able to hit

(35:39):
those numbers in your forecast.

Speaker 3 (35:42):
And the whole reason the emergency fund is there is
when a gig does not show up. But there's plenty
of times when you have your forecasting already set up
and something pops up, a new opportunity, a new gig,
more merch Those are the that's when you reverse engineer this.
You weren't expecting that money, so throw it into the
emergency fund. Throw it into something that if you're still

(36:04):
building your advance, that you have that taken care of
all the worse. Chris will say, we should not even
be talking about the emergency fund if you don't have
your advance already done. I'm just saying different points, different notes.
We don't know what your scale sounds like, A take
advantage of those money spikes in your month and put

(36:26):
those towards a good costs.

Speaker 2 (36:28):
Yeah. And the other end of that too, is that,
just like all of these other tools, it's like the
more you become intentional about this, the more you are
being smart with it, the more it seems to reward you.
Like the universe loves responsible money people, and I think
that when you see people doing well in the music community,
a lot of times, it's because they're being very intentional

(36:49):
and they're being very smart with their money. They're being
very controlled with how they're doing what they're doing, and
that really is one of those things where they go
hand in hand. So this this idea of a forecast,
it's a constant. I mean, I think we've done it
for eight ten years now. I have forecasts and I've
saved them all, all my yearly forecasts back ten years,

(37:10):
and I can look back and I can see the
growth now, you know, And I can watch how each
different revenue stream changed, some dried up, some add it on.
All of that is trackable now, and I can see
where I've gone from all those years back to now,
and it's really nice to be able to see that.

Speaker 3 (37:25):
Do you let a sit in front of a fire
when you do that, do you just pull out those
SIPs of mine that when you're going over your fundamentals,
I'll remember this. Yeah, year two thousand and nine, it
was a January. Anybody no want me tell you this story?

Speaker 2 (37:46):
No, some people have diaries and that we have forecast histories.

Speaker 3 (37:51):
Yeah. And speaking of diaries, we're going into growth for
the last note, and we were talking about manifesting last week.
I mean journals. You could take every single one of
these notes and tell yourself how it's going to play out,
visualize it, make that growth happen.

Speaker 2 (38:11):
And so growth for us is that long term plan, right, dreaming,
planning big, creating that financial life that you want your
future to look like. Being really specific about that is important.
Defining what your long term vision is, creating an environment
to live that way sooner than later. The more you
feel that now, the more likely it's going to actually happen.

(38:33):
And investing in a strategy that will help those funds
and create that network to grow to the am out
that you needed to at the age you're going to
want it. That is so important to define those goals
so that they can become reality if you don't define them.
That metaphor about going in and ordering at the restaurant, right,
if you heard that metaphor, it's like you go in
and you look at the menu, and if you just

(38:55):
focus on what you don't want, and the universe only
hears that, then that's what it's going to give you
because you focused on what you don't want on the menu.
You wouldn't do that at a restaurant, right, So why
would you do that with your life? You need to
go in and order what you actually want. So long term,
it's going to take time. It's about investing. You can't
really invest until you have done those other notes. You've

(39:16):
gotten rid of your debt first of all, right, and
you've built up the emergency fund. So now this note
may come later for some of you, but once it starts,
it should never stop again. It should be a part
of knowing what that number is going to hit and
when you're going to need it. So that's it.

Speaker 4 (39:32):
That's it, simple podcast, Chris Well, we did want to
give you an episode this season that felt like it
was encompassing the entire plan, right, giving us all an understanding.

Speaker 2 (39:44):
Of the broad scale. So hopefully this gives you a
place to start with. The financial scale helps you figure
out where you are in this process and gives you
a plan to approach by applying what it is that
you need to do to your finances in order to
move forward. We musicians, we all pick up new scales
and explore it differently. It all depends on your personality

(40:06):
and what your current skill level is that you're going
to be able to how well you're gonna be able
to apply a scale, and how quickly you're gonna be
able to use it to make it into actually music.
So wherever you're at is where you need to start.
That is the place you need to start. So don't
focus on that. Don't focus on if you feel like
you're so in the hole that you can't get out
of that hole. Right. We all pick up the guitar

(40:28):
or the instrument that we play with where we're at
in our skill level, and we learn the same scale. Right,
So it just is going to be about where you
are at. Our goal here is to create an environment
that we can all communicate about this stuff more effectively
by using the same scale, and just like twelve bar
blues if you're riffing on that, we can all hang
out in that pentatonic scale right understanding each other, loving

(40:51):
that unified creation that we're all making, and yet we
can all say things differently with our own unique voice,
and we are all in this together. We are not
alone in building this dream of being successful and the
impact that we artists have. It is a huge reward
to just be an artist, but we also deserve great wealth.
Sometimes we just need to be shown the right scale

(41:13):
to play in order to create the life changing melody.
So our one action step for you today is to
start putting this plan into action for your finances. Start
with a note that best aligns with where you are
at in your journey, and if you need help, you
can email us to set up a one on one consultation.
We are happy to help when we can. We know

(41:33):
your time is valuable and we appreciate you spending this
time with us and being a part of this community.
It is our hope that you feel that sense community
here at musicians tip Jar and that you'll help spread
the word to make us all stronger. If you'd like
to get hold of us, what's the best way to
do that?

Speaker 3 (41:49):
Send us an email musicians tip jar at gmail and
musicians tipcar dot com, where you can check out all
the resources and discounts we have collected just for you.
Also check out our episodes now on YouTube. If you
find this information useful, please rate and subscribe to the
podcast and slam that like button so we can help
you up on the finance side of your music business.

Speaker 2 (42:09):
As always, thank you for joining us, and remember there
is already enough for everyone, You just need to know
how to get it. Until next time on behalf of
Dave Tamkin and myself Chris Webb, Please stay happy, healthy
and wealthy. Moosa said there's no melody in life that
is sweeter than the sound of success and accomplishment. This

(42:30):
is Musicians Tipchire.

Speaker 1 (42:34):
Somebody, Somebody.

Speaker 5 (42:43):
Nothing on this show should be considered specific personal or
professional advice. Please consult at appropriate tax, legal business, or
a natural professional for individualized advice. Individual results are not guaranteed,
and all discuss strategy of the potential bass operating on
behalf of Musician's temper JR. L. Elders exclusively