There comes a day when every creator makes their first sale and then realizes they have a new challenge: managing their finances as a creator.
The creator economy is estimated to be a $100 billion dollar industry and there are more than 50 million full-time content creators, according to a recent study. That’s a lot of money flowing into the pockets of creators who may be facing managing their money outside of a traditional 9-to-5 job for the first time.
Fortunately, there are a number of accessible tools and tips to make tracking your finances as seamless as creating your content.
Managing creator finances at the beginning
Step 1: Open a separate bank account
The absolute first step in organizing your finances is to open a separate bank account from your personal account. This step often gets overlooked because so many content creators start with small projects and might feel like a separate account isn’t necessary. But you’ll be glad you kept your creator earnings in one place when the time comes to do your taxes.
Step 2: Establish your rates
Next up, establish your budget and your rates. Your rate is going to depend on your business. Consider whether an hourly rate makes sense, or if you want to base the rate on a case-by-case project basis. If you’re selling products like digital downloads or courses, decide what you’ll price them.
For content creators who are just starting out, it can be challenging to put a price on what you know. You don’t want to undervalue your knowledge and services, but you also should be mindful of pricing yourself out of the market. Online communities are a great way to connect with other creators like you and pick their brains about how they price similar services or products. You can also do some of your own sleuthing online to see what your competitors charge and use that to inform your rates. As your business grows and you gain more experience, you should also consider adjusting your rates and prices.
Use our course pricing calculator to get started when pricing your courses.
We can help you price your downloads right.
Step 3: Track your time
How much you charge should be partially informed by how much time you put into each project or product. If you’re only working on one project at a time, tracking the time you spend should be pretty easy. It gets more complicated as you start juggling multiple projects, or multiple products, or both. Once you hit this part of your creator journey, consider using a time-tracking app. Different apps have different features but at the bare minimum, you want it to let you start and stop times for several projects. Then it should tally the time you spend for each client–and how much to charge.
Some time-tracking apps to consider:
- Clockify: This is a great app for simply keeping track of your time for yourself. If you’re ever curious where your time is going, it can be super helpful to actually track it for a couple of days to make sure you’re spending time on the right products.
- Toggl: This app can help you track your time and billable hours across multiple projects at once. So it’s ideal for those creators who might be doing work for other companies or working on partner projects in addition to grinding away at their own products.
- Harvest: If you’re looking to track time and send invoices all from one place, Harvest is one to check out.
Step 4: Budget
Just as important as establishing your rates is knowing how much you can spend and what the return on that investment will be. Budgeting is critically important for any creator or business. But it’s also one of the hardest things for most people to do. When setting your budget, make sure you’re realistic about your spending or your budget will never work and it’ll be increasingly more difficult to stick to it.
While you can use a spreadsheet, a lot of content creators opt for a program or an app to help them track their finances. Mint and You Need a Budget (YNAB) regularly rank as some of the best budgeting apps and both apps link to your bank accounts.
- Mint: This app from Intuit is great because it learns your habits over time, which helps you budget more effectively, and it’s free, which is a really big advantage for content creators who are just starting out.
- YNAB: For the more advanced creator YNAB is free for 30 days and then costs $84 for a year subscription or $11.99 for a monthly subscription. However, subscribers get access to budgeting advice and free workshops every week, which can help content creators learn how to manage their finances better.
Step 5: Don’t be afraid of your taxes
The last step for creators to take when managing their finances is to face their taxes. This is one of the places where you should probably invest in software to help you manage your invoices and accounting. Or choose a platform that has tax tools built in.
Some tools allow creators to send invoices, take payments, and bill customers. Plus, you can connect everything to an accounting service to keep track of all your expenses and stay organized. Then you can use that information to file your taxes.
There are tons of apps, like Stripe and Wave, that specifically cater to influencers too.
- Stripe: Stripe is one of the accounting apps that has embraced the creator economy and built tools to help make finances easier for creators. The app can help you keep track of invoicing, any payments you make, subscriptions, and more.
- Wave: This app helps creators and small business owners create their invoices, track them, and handle their accounting in one place.
Taking charge of your finances
Managing finances can be very intimidating so if you’re feeling overwhelmed: Do not panic. It’s not as difficult as it may seem and the more you track your expenses and income, the more natural it’ll feel.
This article is not intended as financial or legal advice, always consult a professional.