Financing a New Flute with the Flute Center of New York

For almost all flutists, one of the biggest purchases they make will be a new flute. This is often a decision that is made when you have reached a point in your schooling or career that an upgrade to your current instrument is necessary. However, something that is rarely discussed is the financial responsibility of purchasing a new flute, the financing details you should understand before making the purchase, and the financing options available to you. As flutists, we know that buying a new instrument is an incredibly exciting time, but it is essential that we understand the financial impact that comes with making this large purchase in order to best ensure success in the future.

Financing Responsibly

For the majority of musicians, the conditions in which we will be able to purchase a new instrument is by financing it, or in other words, by taking out a loan. A similar concept to when we take out an auto loan to buy a new car. Few of us have the financial means to pay cash for a new flute, but are in need of a new instrument. So the solution will be to finance it.

Borrowing money in any capacity is a big responsibility and should only be done once you have a working knowledge of what you can afford on a monthly basis. Here are the basic steps to help you determine what you can responsibly afford:

1. Determine what your monthly household income is. This is the amount of income you make after tax.

2. Divide your monthly expenses into three categories; household expenses, wants/lifestyle expenses, and debt.

3. Add up your monthly debt expenses.

4. Calculate what percentage of your monthly income goes towards debt expenses:

The lower the percentage the better. A general rule of thumb is to keep your debt expenses below 36% of your monthly income (if you can keep it around 20%, that’s even better!). If you find that you are paying more than 36% of your monthly income towards debts, it is wise to pay off some debts before taking on any new debt. Taking on too much debt can be a heavy burden on your monthly expenses and lead up to a spiral effect of relying on credit.

If you find that a small percentage of your monthly income goes towards paying off debt, determine what monthly debt payment you would be comfortable with by plugging in different monthly amounts (like a monthly $200 debt payment etc.). Make sure that with whatever number you are comfortable paying your monthly debt payments stays below that 36% of your total monthly income. Knowing a number that you are comfortable with and can afford paying will be helpful when it comes time to choose a financing option.

Understanding Financing Details

If you have ever financed something, you know that there is a lot of terminology and fine details that are very important to your decision. Here is a breakdown of important terminology:

• Annual Percentage Rate (APR): The yearly cost of the loan (and how the lender makes money). This rate will include the interest rate and any other charges associated with the loan. The rate is expressed as a percentage.
  

• Principal: The amount of money you agree to borrow.
  

• Fixed Interest Rate: The interest rate remains the same for the duration of the loan.
  

• Variable Interest Rate: The interest rate will fluctuate (based on a benchmark rate specified in the loan agreement) throughout the duration of the loan.
  

• Loan Agreement: The legal contract between you and the lender. This agreement will include information such as, total repayment amount, APR, late charge amount, payment schedule, how to repay your loan, and what happens if you default on your loan.
  

• Loan Term: The amount of time you have to pay back your loan.
  

• Balloon Payment: A type of loan structure where the last payment is larger than the previous payments.
  

• Same-As-Cash: A financing incentive where no interest is paid on the purchase if specific terms are met.

When you are ready to finance an instrument, it is important to think about the amount of money you are borrowing. The more money you borrow, the more money you have to pay back. Creating a plan to save at least a portion of the overall purchase price will allow you to borrow less money. Consider the monthly payment you will be taking on and if you are able to afford that amount (remember, that additional monthly payment should not push your monthly debt expenses to more than 36% of your monthly income). Lastly, ensure that you are still able to save and contribute to a retirement plan with the additional monthly debt payment.

Financing Options Available from the Flute Center of New York

The Flute Center of New York (FCNY) is the largest seller of new and used flutes in North America. They offer multiple financing options to flutists to make purchasing a new instrument the most affordable.

United Midwest Savings Bank

There are multiple options available to flutist through United Midwest Savings Bank (UMSB). Currently FCNY and UMSB are offering a holiday special of same-as-cash financing for flutes paid in full within 6-month, 12-month, and 24-month. This offer is only available through January 2023. Outside of the holiday special, UMSB offers same-as-cash for all instruments paid in full within 6-months with auto-pay. UMSB has competitive interest rates as low as 12.99%. This is a great option for flutists to purchase a new instrument and save money.

*Remember to read the loan agreement. If the instrument is not paid off in full within the agreed upon time, interest will be charged. Interest accrues for the lifetime of the loan.

Noteworthy Federal Credit Union

Noteworthy offers for traditional financing options such as 3-5 year terms at a fixed interest rate. Noteworthy has competitive rates starting at 7%. This is a great option for flutists who are looking for a low monthly payment.

Installment Payments with Shop Pay in partnership with Affirm

With Shop Pay, buyers are able to split up the total balance into equal installments. Shop Pay offers 0% interest with installments of 4 equal bi-weekly payments. Split payments of more that 4 bi-weekly installments can incur an APR of up to 36%.

The Flute Center of New York works hard to ensure the affordability of their instruments for all flutists by offering these different financing options. For more information on purchasing and financing a flute through the Flute Center, contact them here.

When you are ready to purchase a new instrument remember to run your numbers, consider the monthly payment, and understand the loan agreement.

This post was sponsored by The Flute Center of New York. As always, all opinions and ideas are entirely my own.

Dissecting the Paycheck to Paycheck Cycle

For the majority of my life after college I lived paycheck to paycheck. It always seemed that I just had enough money for rent and bills, or during the really bad months, I turned to my savings to cover those last few expenses. I felt like I was walking a money tightrope and could fall off at any moment. I was embarrassed, frustrated, and anxious.

The paycheck to paycheck cycle is when your entire paycheck goes to paying your living expenses with very little, if anything, left over. When you are in this cycle, some months your paycheck may not cover all of your monthly expenses, which leads to a heavy reliance on credit cards or savings. Ultimately leading to a bigger hole that you’re in. Living paycheck to paycheck can also mean that individuals have very minimal savings or are depleting their savings very rapidly to cover monthly expenses.

One of the main reasons why getting out of this cycle is so difficult is because there is very little “wiggle room”. If all of your income is going towards paying your bills, then it can be very difficult to see any opportunities to pay off debt or save money. For some individuals, they may find that there is nowhere in their budget to cut expenses. If your only monthly expenses are your living expenses, then it can be tough to try and cut back anywhere. There is no room to try something new with your money management because you’re doing a financial balancing act. When you’re living paycheck to paycheck, it can be incredibly unclear what the problem is that is causing this cycle, and how to solve it.

Factors That Can Contribute to the Cycle

Living paycheck and paycheck can seem never ending. For many people, I find that there are usually 3 factors that are contributing to this cycle.

1. Not knowing the numbers

Mental budgeting is a sure way to get caught in the paycheck to paycheck cycle. Mental budgeting is when you have a rough idea of how much you make in a month, and as expenses come in, you have a general idea of how much money is left over. The issue with mental budgeting is that it is highly inaccurate. How many times have you opened your bank account and been surprised by the low amount in it? That is due to mental budgeting. There is no way you can keep track of all your monthly expenses in your head.

It is crucial to know down to the penny what your monthly income and expenses are when you are living paycheck to paycheck. Often just writing down these numbers can give you a sense of control and power. 2. Inability to see the problem area

What is causing the paycheck to paycheck cycle? Often it comes down to either a spending issue or income issue. If you are mental budgeting, you may not realize how much you’re actually spending in a month. So, when you get to the end of the month you don’t know where your money went and once again it is a struggle to pay those last few bills.

Alternatively, you could know your numbers forward and backward, and because of that you know there is no place for you to cut back with your spending. This means the issue lies with your income. Perhaps the cost of living in your area is outpacing the income rate of your job. No amount of cutting expenses will help, the only solution is to increase your income. 3. Too much debt

There is a responsible amount of debt you can take on and an irresponsible amount of debt you can take on. If your debt payments are causing you to barely be able to afford your living expenses, you’ve taken on too much debt for the amount of money you make. When you take on debt, always be sure you are able to continue to save and set money aside for retirement at the same rate you were before you took on the debt

It’s important to note that these are not the only factors that contribute to the paycheck to paycheck cycle. Beyond these there are other external factors that cause individuals to live paycheck to paycheck. These include income disparities, the rising cost of living and stagnant minimum wage, and systemic socioeconomic oppression.

Preventing the Paycheck to Paycheck Cycle

The paycheck to paycheck cycle doesn’t have to be forever. If you are just entering the workforce or are just starting to get out of the paycheck to paycheck cycle, here are some ways to prevent falling (back) into this cycle:

Build up savings

Establishing your emergency fund is the best way to do this. This will give you a cushion in case your income varies unexpectedly or you lose your job. Pay off debt

Each time you pay off a debt, you get an immediate pay raise…because you’re no longer making payments towards that debt. As you pay off debts, you’ll notice the amount of money you have left over at the end of the month increases. Build good financial habits

Keep your monthly expenses below your monthly income, don’t take on more debt than you can handle, and as a musician, continue to grow your business.

Ask for help

There is no shame living paycheck to paycheck. If you feel like you are being crushed under a financial rock, it is time to ask for help. There are ways to get out of this cycle and sometimes you need support to do so.

If you are ready to stop living the paycheck to paycheck cycle but are unsure how to break it, then check out the Music, Money, Mastery Program!

5 Reasons Why Musicians Should Consider Themselves Small Business Owners

When I was in college and grad school I took a total of 2 music entrepreneurship courses. One was actually a music business course the other was an entrepreneurship course, but both promised to teach the ins and outs of creating a successful music career. Whether or not that was achieved in the course is another story, but I distinctly remember not a single mention about how musicians are small business owners. In fact, I had never even considered musicians as small business owners until I started my own small business.

In 2020 I started a private flute studio to teach middle and high school flutists in my area. Not uncommon for musicians to do, however, I quickly realized that starting your own private teaching studio is much more than just “teaching music lessons.” There were skills I needed to learn in order to make my studio successful. Skills that went far beyond how to make a sound on the flute. It wasn’t until a few months into starting my studio that a friend’s husband said, “Ana, how are you? I heard you’re doing some amazing things and that you’ve started your own business.” This is the first time I had ever been recognized as a business owner and truthfully, the first time I had ever considered myself a business owner.

The next big shift that happened was when I started booking more gigs in my area. Throughout school, I was able to gig fairly often since gigs were plentiful in the area I went to school in. But moving to a different state and trying to establish myself (especially in the middle of a pandemic) was challenging. When I started booking more gigs I realized how this is an entire small business all on its own. Suddenly, I had gone from being a musician who teaches and gigs, to being the owner of 2 small businesses.

By making a small shift in terminology and thus becoming a business owner, suddenly the way I looked at my music career and the way I looked at myself, changed.

5 Reasons Why Musicians Should Consider Themselves Small Business Owners

1. Accountability

The moment I realized I was a small business owner, I started holding myself to a higher standard. This wasn't necessarily an overnight change, but a progression of small changes that I implemented over many months. I created ways to make it easier for customers to work with me, I created more opportunities for my customers, and I created systems to continue to get customers. After all, I wasn't just a music teacher and freelance musician, I was a business owner.

Throughout our industry, a hierarchy is sometimes created in terms of jobs classical musicians should have. In my own experience, I’ve noticed that private teaching and freelancing are often put at the bottom of the hierarchy. But the truth is, starting a small business is no simple task and certainly is not an afterthought to be put at the bottom. By reframing our thinking and thus becoming small business owners, we redefine what a classical musician looks like.

2. Transparency in Your Finances

So often we can feel unstable with our month to month income. Some months we may have more gigs than others or students come and go. However, once we start thinking of ourselves as small business owners, we can implement different systems to ease the instability. Business owners often have strategies to track income, predict revenue for the year, and understand what costs their business money. There is no reason why we cannot do the same for our small businesses. Establishing these systems and strategies is one of the best ways we can combat the feeling of instability.

3. Legitimacy

We are, by nature, creative people. It’s time that we take ownership of the things that we have created. Part of that means thinking of ourselves as small business owners…because we are. It is so much more than “just a music lesson” or “just a gig.” In fact, having that mindset devalues what we do. The skills required to create a teaching studio and create regular gigs go far beyond proficiency on our instrument. When we take ownership of the things we have created and call ourselves what we are, small business owners, we can start holding our customers to higher standards. This ownership gives you a stronger voice and more power.

4. Creates Opportunity for Yourself and Others

In starting your own business you probably had to develop skills that you didn’t have or didn’t realize you had. Many of the skills I learned during this process have allowed me to be successful in other areas of my career. I remember when I was starting my business, I was often flooded with ideas of how to make it more successful. Many of these ideas have not only allowed me to grow my business but collaborate with other musicians as well. While music is often a collaborative experience many times musicians can feel very isolated. Starting your own business gives you the opportunity to create new things and create opportunities for others.

5. Elevates the Craft

A few months ago I was at a holiday party with my fiancé and one of the owners of the restaurant that my fiancé works at was speaking with us. The owner turned to me and asked what I did. Proudly, I said I was a private music teacher to which he replied “oh” and turned back to my fiancé. It was a strange experience because I got the overwhelming feeling that he thought that I was nothing more than a struggling musician. However, that is far from the truth.

It is time that we give ourselves more credit than just being a freelance musician or just being a private music teacher. Elevating how we think of ourselves will in turn elevate our entire craft. We strive to get non-musicians to understand the value that we provide, but that means we also have to understand the value we provide. Calling yourself a small business owner gives you authority, recognizes the years of work you’ve done, and uplifts the classical music field.

Are you ready to start building your small business but are unsure how to financially set it up? Schedule a free 30 minute call with me!