How to manage your finances
Your brand value is going up and you are reaching a position where donations may be a thing. Maybe you are just starting and want to know about handling your finances. To keep this information relevant to most parties, it is going to be broad. Not all methods may be relevant to you or your finances.
Making money has more sides to it, just because money has been delegated to you does not yet make them yours. This can be used in your favor in various ways. Some platforms have payment threshold, which means you can keep the income off your books until they have been paid out either partially or fully to you. Same goes for affiliate payments, royalties, and other services or products. Until the money is deposited into your account, they are not in your books.
All depending on what strategy you are following, ways of managing funds can vary. In this article are we following the "What we need" instead of "What we have" strategy.
Start with expenses
The very first things you need to collect and figure out is your static expenses that come regularly. If you are planning to go full-time, make sure to include everything your current income sources are covering too! If you rather have a stable source of income on the sideline, exclude the expenses you want to pay off with that paycheck. To cover the basic things for all, let us take the thought of going full-time into consideration.
To make this list of expenses, start from the top and go down. What do you need to pay off and what needs to be paid first? Prioritize your money to understand what happens if you go short on income. If you have expenses that come regularly but not monthly, make an average of what you should pay every month to have the money. Better put off a little every month than sky-high expenses every 3rd or 6th month. A few items to put on the list could be:
When you have a complete list of your fixed expenses and needed money to survive in an acceptable manner, let us use this data to create a budget-flow.
Pre-delegate your income
Once you understand your expenses, you know how much you need to earn at minimum after taxes. Some people way say that dealing with taxes is the hard part when in fact it is rather straightforward. You have to do a little match and turn your taxes into an overhead percentage. In this time it is better to take a little too much aside than too little, as tax collectors usually do not care so long they get their money.
When you know your tax percentage, you need to make 3 accounts to contain the following elements: "Income", "Taxes" and "Budget". You can make more accounts to split it further if you prefer. All payments should be deposited into Income and then you directly take out the tax percentage you calculated. The rest is then transferred to Budget to be distributed and used. How you want to manage your money in a personal plan is yours to figure out.
The benefit of these 3 accounts is that you easily can see how much money goes in and how much you estimated should be taxed. When the year is done and you need a follow-up, just ask your bank to make you a transcript of all ongoing payments to Income and check if all match up.
Differences in a company
If you are running your livestream through a company or business account, there may be some various changes to the taxation and how you need to move the money around in terms of spending it. Usually, but not always, are companies able to get paid without paying taxes until you pay out salary or has to do the annual report. You now have the basics, if you need more information about running your stream through a company, be sure to tag along and a more relevant and in-depth article will be written.
Disclaimer: This information is informative and made for you to get a good understanding of how to manage your finances with more ease and less frustration. You are not obligated or in any way forced to follow this information. You are free to do it in any way you desire. You are fully responsible for your finances and to manage them appropriately.