Let’s talk finances. It’s not always easy to discuss money and sometimes it can feel simpler to avoid thinking about your bank account altogether. But with many people facing financial concerns in the current climate, it’s important to deal with your money worries and the impact these can have on your mental health.
We spoke to Paul Pacifico, CEO of the Association of Independent Music (AIM). He shared his advice on dealing with financial uncertainty and discusses how AIM are helping the music industry to bounce back.
With the pandemic creating a wave of redundancies and furlough, what advice would you give to anyone facing financial anxiety?
My first rule of thumb would be to slow everything down that involves paying money. Money problems of any type can start mounting up quickly and it is easy to feel overwhelmed. Try to take a step back, take a deep breath and start to separate out the payments you need to make. Can you speak to people? Can you offer to make a part payment or extend the payment terms and delay? Pay the minimum required in each case and see what flexibility you can carve out.
You cannot magic-up emergency savings that don’t exist, but you might be surprised how far you can make things go if you really start to drip feed and only pay out what you absolutely have to and as slowly as you possibly can. If you can buy yourself some time, it can really save your cash flow until things start to pick back up.
What top tips would you give to anyone trying to save money?
1. Sweat your network. It can often be amazing what you can arrange at a discount or for free through the goodwill you have built up over time by helping people out or doing small favours here and there. I have always been heartened by the music community’s ability to help get stuff done when someone is in a pinch!
2. Remember that saving money only keeps you afloat for so long. Prioritise any spending on things that stand to directly generate income in due course.
3. Consolidate any debts. If you have racked up debts on loans and credit cards, make a list and put them in order of highest interest rate first. Accelerate any payments to the debt at the top of the list and try to minimise or even defer payments to the debts at the bottom of the list. Meanwhile speak to the lender at the bottom of the list and see whether you can consolidate all the other debts into that one, or seek a personal loan that would enable you to do that. It could save you a fortune on monthly payments and also restructure the debt to make it feel much more manageable and less stressful.
What book you would recommend to someone worrying about their finances?
It isn’t a personal finance book or one about budgeting, but I would always recommend ‘Getting To Yes’ by Roger Fisher and William Ury – it is a book on negotiation strategies. The most valuable insight for me is about reframing problems and how to work on them. This approach has really helped me unpick a number of complex problems I have faced over the years.
What are AIM doing to offer financial support to the industry during the pandemic?
We launched the AIM Crisis Fund in 2020 to support micro-business owners and contractors working with artists that are part of AIM’s independent music community. We also have an FAQ that covers all of the latest information and which signposts support from multiple sources so that people can be clear on what is going on and what they could be doing next. Beyond the AIM Crisis Fund, I have heard about many AIM Members really going above and beyond to try to keep their teams and wider networks afloat during this very difficult time.