If you’re considering becoming a full-time content creator, then you need to be practical about your financial situation. Unless you’re already making the majority of your income through YouTube, then you’ll have to adjust to a limited budget until your new career takes off.
Here are a few practical financial tips for every creator who wants to do YouTube full-time.
1. Establish multiple streams of income before quitting your day job.
As a general rule of thumb, you should wait until your channel is monetized to start considering pursuing YouTube full-time. At the very least, you need a thousand subscribers and four thousand hours of watch time for this to happen. However, YouTube’s monetization guidelines can change at a moment’s notice, and you can never accurately estimate how much you’ll earn through ad revenue in a month.
Therefore, it’s important to establish streams of revenue beyond channel monetization. You could start a crowdfunding campaign through Patreon or Channel Memberships, or you could pitch sponsorship ideas to brands you’d like to work with. Learn more about the different streams of revenue every creator should have here.
2. Create a realistic budget based on your expected income and expenses.
To put things into perspective, you should create a realistic budget. First, add up all of your monthly expenses, such as your rent, car payment, insurance, etc. Then, add other expenses that you’ll incur as a full-time content creator. For example, if your health insurance is through your current employer, then you’ll have to start paying for it out-of-pocket after leaving your job. You should also factor in any big purchases you’ll need to make, such as a better camera or new products to review. The resulting number is your monthly expenses.
Then, add up the amount of money you make each month through content creation alone. Don’t include the money you make from your day job. The resulting number is your monthly income.
Next, subtract your monthly expenses from your monthly income. If you get a negative number, then you don’t make enough through content creation to support your current lifestyle. You might be able to cut some expenses, such as cable TV or subscription services. However, unless you’ll have money left at the end of each month, then you should wait before making YouTube your full-time career. In the meantime, focus on securing more sponsorships and increasing your audience engagement.
3. Save a few months’ wages in an emergency fund.
The most important thing you can do before becoming a full-time content creator is create a safety net for yourself. By saving as much money as you can before quitting your day job, you’ll be able to prepare yourself for the worst case scenario. It will also give you peace of mind as you take on the challenge of this risk.
If possible, you should try to save enough to cover a few months’ expenses. That way, if your views dip or a sponsorship falls through, you won’t have to worry about making ends meet. With an emergency savings fund in place, you’ll be able to focus on creating content without feeling anxious about your finances.
While the idea of becoming a full-time content creator is exciting, you should think the decision through carefully. When taking a risk in a new career, your financial well-being should be a priority.
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Kristen Harris enjoys listening to a wide range of music, from Taylor Swift to, on occasion, Celtic instrumental. She also spends her time writing, reading, and baking.