You Made Money… Now What?

Speaker A00:00:00

Creators often feel poor after their biggest months. And on the surface, that doesn't make a lot of sense, does it? Because you just made more money than ever.You've had more views, you've landed more sponsors, you made more income. So why does it feel like you have less? I'm going to tell you why.Because your best month for so many of us can create your worst financial position ever. And the problem is, most creators don't even see it coming. That's what I'm going to cover on today's show.So in this episode, I'm going to give you three things. First thing I'm going to talk about is why those big income months can actually create more financial pressure.Second thing we're going to talk about is the three mistakes creators make after that successful month. And third, I'm going to help you build a system that will stabilize your income so you can stop living on that creator roller coaster.It's fun to go to the roller coaster, but it's not fun when you're a creator, because in the end, the goal is to not just make money. The goal is to feel stable while you're making that money. I remember talking with a creator who had just had their best month ever.They said to me, Ralph, I made $25,000 last month, and I feel like I'm in trouble. I can still remember that conversation. I said, wait a minute. You just made $25,000 and you feel like you're in trouble? That's not supposed to happen.Well, here's what the problem was. Once they had that great month, what did they do? They upgraded their equipment. They increased their spending.They went out and bought a bunch of new software and subscriptions and added a ton of monthly obligations. And at the same time, they didn't set anything aside for taxes. But here's the worst part of it all.They assumed that next month would look just like this big month. Well, here's the problem. The next month wasn't 25 grand. It was $8,000. But now they had higher expenses, lower income, and a tax bill pending.That right there is the trap. Here's the thing I want you to really lean into right as we get started. Having a big month doesn't automatically create stability.If you don't have structure, that big month just creates more pressure. Because when income spikes, most creators do through three things. These are things that I've seen them do.They spend more, they save less, and they make this broad assumption that the income is going to continue month after month. And that combination right there can take what should have been a breakthrough month.Hey, 25 grand a month is a breakthrough month, but it turns it into a financial problem that just increases as you scale. So let's get into how this happens. Number one mistake, spending spikes.If you're like most creators, when more money comes in, spending often increases immediately. Think about your first job. When you landed that first job, you got that bigger salary. What did you do? You upgraded your life.Creators do the same thing. We tell ourselves, well, I can finally buy that better camera. I've been working with this cheap webcam, and I can go buy a good one.I can finally upgrade my setup. I've been working with this setup, and, you know, I can really tweak it out. I can. I can make it work better for me.Maybe you say you can finally hire help. You go hire those people to help you build your content, and I can finally get the tools I need.Now, I'm not at all saying that those purchases aren't legitimate business investments. They may very well be the things you should build. The problem is not buying better tools.The problem is now you've created this new monthly commitment based on one unusually good month. Like I talked about, better gear, editing software, new subscriptions, contractors. Let's not mention lifestyle upgrades.Maybe you go out and get some office space, you travel more, and you have higher personal spending. Those are all good things. Those are all things you're working towards. The dangerous part is this.That Big Month might not repeat, but those expenses, they're going to continue to repeat every month. So that's the first mistake. Second mistake, tax is getting ignored. That Big Month creates a bigger tax responsibility.But many creators treat the same full deposit as spendable money. Just figure it to yourself. When a creator sees $25,000 hit the account, emotionally, you feel like, oh, wow, I just made 25 grand.But as I've said on the show before, from a financial standpoint, that's not the truth. You didn't make $25,000 that you can spend on whatever you want. You made $25,000 at the top level, revenue.But that's before taxes, that's before expenses, and that's before those other obligations you've already committed to. So if you don't separate your tax money immediately, your brain's going to treat it like, oh, that's available money.And once your brain treats it like available money, what are most people going to do? You're going to spend it.And that's why so many creators get surprised later that big tax bill doesn't at all feel connected to that big month anymore. It shows up months later when, for many of us, the money's already been spent. And that's when success starts to feel like punishment.So that's the second mistake, not worrying about taxes. Here's the third mistake. That future income gets assumed. I've kind of beat around the bush on this already.Most creators mistake a spike for a new baseline. We think to ourselves, Well, I made 25,000 last month. That's my new reality. But that's one of the most dangerous assumptions in a creator business.When you start to think, this is my new normal, maybe a big sponsor comes in and a video takes off, or maybe you've got that affiliate income starts to work, or that course sells well, maybe you close a brand deal and suddenly start building your life around that number. But as you know, if you've been doing this for any amount of time, creator income is usually uneven.You've got some strong months, some months that are average, some months, it's like crickets, super slow. And some months surprise you in both directions. So I want you to hear me clearly on this. That one big month is not a business model.That's just a moment. You've got to build a system for the months that are not as exciting. So here's the real question we've got to answer today.What if your big months are not supposed to upgrade your lifestyle first? What if your big months are supposed to find your slower months? Now, that's a way. We hadn't thought about that.What if the purpose of a great month is not just celebration, but actually stabilization? See, that's where everything changes. Now I want to get into what I call the creator income stabilization strategy.That's a lot of words, but it starts with one simple idea. Every dollar needs a job before you spend it. So let's get right into it. Here's the first step of that.The first thing you've got to do is you've got to separate immediately. As soon as money comes in, it should be divided. When income hits the account, it shouldn't just all sit in one pile.That's where confusion's going to start. Instead, divide the money into categories. Right away. Here's the categories that I recommend.You have your operating money, your tax money, your owner pay, and then what I call savings or buffer money. Because the longer the money sits together, the more spendable it feels.If you see all this money in your operating account, your mind starts to think, well, I can Just spend this. But we already know you can't. That separation creates clarity. So if $10,000 comes in, the first question shouldn't be what can I buy?Hey listen, we're all going to think like that, right? Oh, I just landed ten grand. The first question should be was where does this money need to go? So that's the first step.Start to plan that money, give each of those dollars a job. Second step, you've got to normalize your income. We got to figure out a way to stop that roller coaster ride.You shouldn't live directly on whatever the business made that month. You got to start moving away from that. And that's a key shift here. You don't live on what you make, you live on what you consistently pay yourself.That means that business may have a $25,000 month and an $8,000 month, but you can't swing your personal pay like that, wildly every deposit. So let's just say the business does make $25,000 one month and $8,000 the next.That doesn't mean your personal life should jump up and down with those numbers. If you do that, you're going to constantly build this cycle of upset. You're going to constantly feel broke.You got to decide on a steady owner pay amount that the business can support over time. Because your business income can be inconsistent, especially when you're first getting started. But your personal life, that needs consistency.Your landlord wants the rent payment, the mortgage company wants their payment, your car payment. You need to eat, you need to pay for your kids school, whatever else you're doing.So we've got to try to build in this consistency in something that's inconsistent. And that's why owner pay matters. So that's step two, step three. Next thing we've got to do is we've got to think about building a buffer.Big months should help protect those slower months. We've already said you're going to have slower months. And that's where creators finally begin to feel some peace.Because that buffer that you build turns that big month into future stability. It's like, I've got this sitting here, I can use it. So instead of spending every single dollar, you're creating some breathing room.That way when you have that slower month, and listen, you're going to have that slower month. When you have that slower month, you're not panicking anymore. You're prepared. You got that money sitting there. And it's not just money sitting there.Think about the intentional, the emotional side of this. It's an Emotional protection. It's kind of like that blanket when you were a kid. It's that warm blanket.But it keeps that one slow month from becoming a crisis. Let's move on to step four. And that's got. You've got to plan for variability.If you don't hear anything else I say today, creator income is going to fluctuate. It's going to. So your system should expect that fluctuation. A lot of creators plan as if money will just continue to go up every month.I'm going to make more and more. Hey, that's a great thing. I hope that happens to you. But stable creators plan for that movement.Stable creators know there's going to be seasonality to this.Hey, you know that the brand deals you have right now might not be the same brand deals you have a month from now, three months from now, six months from now. That platform that's performing well now might not perform like that anymore. The payments that you are getting from your sponsors, guess what?People pay stuff late. And you've got to accept that some months are going to be slower. The goal is not to be surprised by that variability.The goal is to build a system that can handle that. You don't have to have income. Perfectly predictable. In order to build this system, you just need a system that's prepared for that unpredictability.And maybe you're listening right now and you're thinking, ralph, man, you're speaking to me. Exactly what happens every time. You're not alone in this. This is one of the most common patterns I see with creators.You make money, you feel good for a moment, but then that stress comes right back because there's no system underneath of it. If that's where you are right now, I want to encourage you right now. Go to contentcreatorsaccountant.com/HelpMe.We'll put a link to that in the show notes. But let's build a system that actually stabilizes your income. Because, listen, once you fix this, everything changes. That stress goes away again.That's it. contentcreatorsaccountant.com/HelpMe. Well, let's get a little deeper. The first point I want to make, income doesn't equal stability.More money alone doesn't solve the problem. A lot of people say to me all the time, well, Ralph, if I just make more money, this will be so much easier. This will be so much more stable.You can make more money and still feel broke. I work with creators all the time. They make more money, but they're still broke. They don't have anything to show for it.You can double your income next month and you can still feel behind. You can have your best month ever and still feel anxious. And you're probably saying, but wait a minute, Ralph, if I make more money, it should work.But, friend, you have to understand this. Income and stability are not the same thing. Income is what comes in. Stability is what your system creates.The truth is, more money gives you opportunity. Of course I'm not going to sit here and say that more money is not better. More money gives you opportunity.But that structure that we can build, that's what actually gives you security. But let's move on to point number two, because this is one that destroys so many of us. And it's that lifestyle creep. And it's silent.It usually doesn't feel reckless when it's happening. You don't usually wake up one day and say, I'm going to make bad financial decisions today. I don't know anybody that does that.When you're making those decisions, it feels reasonable, oh, I've earned this. You might say things like, I can afford this now. And sure, maybe you can afford it this month, but can that business support it the next month?And the next month? Can it support it in a slower season? Hey, can it support it after taxes?You're spending the whole number, but you might be taking a 30% haircut with taxes right off the beginning. And think about this. What if that sponsor payment's late? What if that platform or that affiliate income doesn't happen every month?Lifestyle creep doesn't usually arrive as one big decision. It usually is a series of small decisions that quietly become your new baseline. But here's where we change the dynamic of this. That.That stability I just talked about. Stability isn't something you just happen into. It's designed. It's not some accident in the creator business.Most creator businesses are naturally unstable. Yes, I said it. I hear this all the time when I'm working with different creators. They say to me, ralph, my business is unstable.Yep, you're right, it is. It's just a fact of the matter. Your income changes, your expenses change, there's new opportunities, but platform performance changes.Hey, we live in these algorithms and we leave on these platforms with one month this works, the next month, this works. And there's no seem. Sometimes it doesn't seem like there's any rules at all.And then add to that our audience behavior, which seems to change every day. So if you really want to live in stability, you got to design it.That means separating your money as we talked about setting aside taxes, creating a way to pay yourself, and building that buffer and planning for slow months before they even arrived. Stability isn't something you wait for, it's something that you build. But now let's talk about what changes when you have this system in place.When a creator like you implements this system, the first thing that changes is emotional. It's not going to be a money situation at first. It's going to be an emotional change. You're going to stop feeling like every month is a surprise.You stop looking at those big deposits and wondering how much of it is actually yours. You're going to stop feeling broke after success, and you're going to start seeing the business clearly have some benefits that you're going to find.You're going to know exactly what's available to spend. When you see that money coming in, you're going to say, okay, but Ralph already told me I got to cut this piece out.Move this here, taxes here, buffer here.You know what belongs to taxes so you don't have to fret and stress out when it comes to April 15, you know what you can pay yourself so your rent, your mortgage, your car payment, your spouse is going to be happy, the kids can eat. You're going to know what to do with that.You know what needs to stay in the business as that buffer, and you know that you're prepared for that slower month. Just think of the emotional weight that that just took off. I wish I could tell you that that's going to remove every financial challenge. It's not.But the goal here is to stop being financially surprised by things you could have planned for. In the end, if your best month leaves you feeling stressed, you're not living in stability. That's a big flashing red warning sign.But without structure, more money is just going to bring bigger problems. It's going to lead to bigger spending, bigger tax bills, bigger assumptiohns, and more pressure.But with the right system, those best months can become your strongest foundation.As I said, they can fund the slower months, they can protect your peace, and they can give you options, and they help you build a business that doesn't fall apart every time income changes. So right now, if you want help building that system, I want to encourage you, go to contentcreatorsaccountant.com/HelpMe again.That's contentcreatorsaccountant.com/HelpMe. I'm Ralph Estep Jr. I am the content creators accountant, and I help creators just like you protect, keep and grow what you've worked so hard to earn. Remember this.Making money is only the first step of it. Keeping control is what builds financial freedom. I'll see you on the next show.