Budgeting as a content creator, streamer, or contractor

I’m going to go a bit boring for this week’s blog and talk a little bit about budgeting, and why it’s important as a streamer, vlogger or content creator. As a precaution: this post doesn’t constitute legal financial advice, and I’m not responsible for anything you do as a person. Read, educate yourself on personal finance, and generally don’t do anything stupid.

It’s easy to look at this kind of thing and think it’s a no-brainer, but I’m finding that people are much more likely to keep this kind of thing going when they have a plan. It’s kind of like dieting or going to the gym: you don’t exactly know what you need to do in order to achieve success, and having someone be able to lay that stuff out there really helps. What I’m going to be talking about is what has worked for me.

I’ve become a bit of a budget freak lately because I moved away from working contracts and finally started to get a stable paycheck. I knew that I wanted to do a couple things with this — I wanted to make sure I put away enough for taxes and savings, and I wanted to avoid my usual practice of taking money out of savings to make up for overspending or emergency funds.

Introducing YNAB

Since February, I’ve been using YNAB (You Need a Budget) in order to handle my finances, and it’s been great because it both gives me confidence to know I can afford things I want, and also lets me see exactly where I’m spending the most. Since making a part of my daily routine, I’ve found that I’m generally a lot less stressed about money, and I know exactly what going in and coming out.

A lot of this blog post is going to be referencing YNAB directly because it’s the tool that has gotten me to stick to the habit. While some of it won’t apply if you’re not using it, there’s still things to pick up.

For reference, I’m using the “Classic” version (YNAB4) that was sold on Steam (usually on sale) a while back. The company stopped selling it there to focus on its new subscription model; I’m guessing they realized they could make more money there instead of a one-time purchase. The new version is around $50/yr (with a 35 day trial), and hooks into your bank account to bring in transactions automatically. If you’re absolutely dirt-poor, I believe they still give away free memberships to students, or you can find Classic through less-than-legal means, sync through Dropbox, and still use the app on your phone. You can also use Mint, which I believe is free.

Using the software is pretty simple: you set up your bank accounts to know how much money total you have to spend, and how much debt you have in terms of credit cards or long-term loans. Then, you set categories for your budget, and assign values to them that draws from your pool of available money.

For instance, if I have $2000 available in all my accounts (checking, savings, etc) to spend for the month, and assign $100 to my “Gas” category, YNAB will tell me I have $1900 left to budget. I can now act with confidence because I know that “Gas” money is planned for. You only budget money you have without assuming future paychecks or inflows; this keeps you focused and realistic.

When you make purchases or receive income, you create an entry in a database for who you paid (or who paid you), which budget category you assign it to, and whether it’s cleared or not (for instance, credit card purchases may not show up on a statement right away). YNAB then removes the amount you paid from the category; if I put $20 of that $100 budgeted for gas for the month in my car, YNAB would show me I had $80 remaining for the month. You also track every transfer between accounts (like paying a credit card bill from checking).

Basically, it rewards you for being diligent about tracking everything — it’s like counting calories for everything you eat. It falls apart if you don’t, because suddenly the amounts of money you have are different between what’s in your account and what you’re budgeting.

YNAB has four blog posts for use with its platform, but I find them pretty applicable to thinking about money in general. They comprise four “rules”:

1. Give every dollar a job – Budget every dollar you have, even if you think it’s “too much” for one category. Not having a big pool of floating, unassigned money means you know for sure that everything is accounted for, and surplus can be used later.
2. Save for a rainy day – By inputting things into your budget to save for long-term, you can buy things you actually want without guilt. Want that new PC upgrade? Save for it, take care of all your other bills first, and you can because you know you aren’t “wasting” the money!
3. Roll with the punches – Adjust, adjust, adjust. Part of over-budgeting in Rule #1 means having money to move around between categories in case you need to cover unexpected expenses.
4. Live on last month’s income – Budgeting all your money means that unspent money in a category means that it carries over to the next month, meaning you are “spending last month’s money” along with that month’s income. Eventually, you want to make last month’s income stretch for so long that you’re essentially earning a month ahead of the money you’re spending. For instance, if I have $200 unbudgeted that I don’t need anywhere else, I know I can throw it into paying for one or more of next month’s therapy appointments so I don’t need to use next month’s income as much.

For me, these pretty much make sense because after a whole month, you realize that you haven’t overspent or gone into panic mode — everything is accounted for.

Getting in the budgeting habit

My workflow is pretty straightforward:

I get paid monthly, so at the beginning of the month I input how much I get paid, and use that to plan. I only input money once it’s in my account and available to use.

After depositing my income to my bank, I separate tax money (using Canada’s Payroll deducations calculator) and a base amount of savings; this is to take that money out of my hands as early as possible, so I’m not tempted to budget it. I want to not touch that money at all, and let it accrue interest before I take it out in April to pay taxes.

My savings account is also marked as “off-budget” in YNAB so the money inside of it is not considered usable for the rest of my budget.

Then I go home, open YNAB, and assign money to categories. I have a set of “monthly bills” that I know will always remain the same (phone, internet, etc), another set of “expenses” that are a bit more fluid (groceries, alcohol/eating out, medical, work expenses) and a “frivolties” set for things I don’t really need, but want to plan for (Twitch/Patreon subscriptions, Steam/GOG purchases, “Entertainment”, gifts).

Obviously, I take care of my “need to haves” first. I plan for taxes, a small (but manageable) amount of savings, and utilities.

Then, every time I make a purchase, I use YNAB’s legacy app (iTunes/Android) to input it right away. This syncs with my database on Dropbox, and I can edit at home on Desktop if I need to.

If I have any purchases that exceed my budgeted amounts, I will shift money from other categories to make up for it. If I have $100 budgeted for medical, but suddenly need another $150, I can comfortably take it out of my Entertainment/Eating Out budget because I know I can sacrifice there to make up the difference.

Towards the end of the month, I will look at my remaining totals for my budgeted items and see if I can squeeze another round bit of money to add to savings. If I can’t, I can’t, but if I can, I will try to sacrifice in other low-priority areas to make that amount happen.

I will then add this to what I deposit at the beginning of next month for savings and taxes. For example, when I get paid I can put away $200 in savings, consider if I can deposit another $200 at the end of the month from that month’s income, and if I can, I can.

This second set of savings planning ensures that I don’t over-budget for savings and need to dip into them in order to cover myself.

At the end of the month, I can look at where my spending went and if I need to change anything. If I see that I’m having trouble covering a cost, I can look at where I’m spending most and adjust; even if there’s no problem, sometimes you can surprise yourself at how much you spend on say, Steam, and curtail yourself to have more to allocate elsewhere.

Where Twitch comes in

I haven’t talked too much specifically about streaming and content creation yet, but I figure I’d go into some of the reasons why budgeting can be tough in those areas.

For one, you don’t usually have a fixed income, and if you’re not doing things professionally, you may not have enough money to cover your whole bills. Especially when contracting, you may not be sure when you are getting paid, which makes the situation scary: it puts more emphasis that the money you have now may need to last longer than you would like. This means you might dip into savings more than you’d like.

This can make budgeting stressful to face, but it also gives you an idea of exactly how much money you need to make to sustain your effort. If you can’t make the amount to cover your bills while creating full-time, you’ll have an idea of what side-hustles or part-time work you need to pick up to make it work.

Especially in this situation,  it’s important to only budget the money you have because it informs your choices. If you are buying things assuming that you will be getting a certain amount next month to cover it, it leads to risk when complications arise (chargebacks, delays, bounced checks, excuses).

Usually with content creation there are four areas of purchases that budgeting helps a lot for:

1. Big upgrades to save long-term for: hardware, software licenses, music, commissioning art/emotes/whatever, or general savings cushions
2. Planned spending like buying new games, material for cosplaying, trips to conventions or gaming events, or infrastructure costs like Internet or cell phone data
3. Paying off debt from credit cards (which often stomach those big costs/trips) or student debt
4. Taxes, which as a content creator/contractor you’re responsible for

I lean towards planning for bigger purchases because these are the ones that tend to be seen as the most valuable for making yourself stand out. Better cameras, microphones, gaming PCs or consoles make us think we have greater possibility for improvement, which in reality it is often not needed right now.

This is especially true with travel, as “networking” can be a very vague activity with no clear goal or result. Coming home from a trip feeling the dread of how much you spent on it to come home with “nothing to show for it” can be an entirely terrible experience.

Being able to save and plan for these items puts less pressure on yourself to “make it worth it“; by spending money we know we can spare, we stress less about that upgrade needing to make us more money in proportion. Spending $1000 on an audio setup for your stream does little if you don’t have the fundamentals to back it up, but if you can confidently say “everything else is taken care of, and I’ve saved for this,” the stress evaporates.

In short: if you can’t afford something you like, save for it or miss out, no matter how much it makes you feel left out. If it’s impossible to make all your money from streaming or your own content, you need to get a job to cover it.

This is ultimately what budgeting did for me: I stopped having to second-guess every purchase I made because I was worried about an unseen cost biting me in the ass down the road. Suddenly, getting dinner with a friend or buying a game I wanted (but “didn’t need”) didn’t feel so guilt-inducing. It didn’t eat at me anymore because I knew that the money was there, and I could stand to treat myself.

This confidence and peace-of-mind isn’t just “adulting;” it seriously allows your to spend your mental energy elsewhere, instead of wondering how much damage your credit card interest will do that month.

I seriously credit getting my shit together with money as something that’s improved my mental health over the past year, and I sincerely encourage you to do the same, especially to pursue your dreams. Similarly to the gym or a diet, you will have the initial pain of looking at your situation and thinking “man, I suck.” However, with time, patience and discipline, the improvements will come, and the confidence will come with it.

Good luck.

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Matt Demers writes about video games, culture and the Internet. You can find him on Twitter and watch him stream on Twitch. If you liked this post, consider sharing it!

Extras:

• YNAB has an active community on Reddit where you can usually find weird usecase answers. I had to do some tweaking in order to find solutions for my workflow until things came into place.
• Credit cards are handled a little weirdly in YNAB classic because your existing debt is added as a category that isn’t technically “paid off”; you just assign money to the category until the debt is eliminated. More info can be found on this blog post.