How to Manage Money (and Your Creative Business) During a Recession

Depending on who you ask, we're either approaching a recession or we may already be in one. Either way, it's a good time to revisit some financial foundations and talk about how to weather an economic storm.

From a creator's perspective, brand deals may shrink, businesses may tighten up their freelance budgets, but influencer marketing budgets may rise.

We haven't seen a real recession since the creator economy took off, minus the minor blip in March 2020, so it's going to be interesting to see how a tighter economy effects us as a whole.

But economic conditions are outside of our control, and there are a few tactical things you can do to put yourself in a position to thrive:

Know your cash flow (personal & business)

Your cash flow is the most important part of your finances. It's the money you have coming in each month (income) and the money going out each month (expenses). To get an understanding of your cash flow, you need to review the past few months of income and expenses for both your personal and your business finances. This could consist of reviewing bank & card statements, your accounting software, or using an app like Truebill (no affiliation) that gives you a monthly overview of your money.

The reason you need to know your cash flow is so that you can cut unnecessary costs, see where your income is coming from, and make smart financial decisions based on real data & information.

Aim to eliminate high-interest debts

High-interest debt (anything over 6-8%) is the most expensive thing you can have in your monthly budget. Do whatever you can to pay more towards high-interest balances, like a credit card, so that you can save money on interest and so that you can free up cash flow to go towards more impactful things, like savings or business growth.

There are many ways to pay down debt, but it may make sense to consolidate high-interest debt if you have several outstanding balances, or homeowners may consider taking out a home equity loan or HELOC at lower interest rates (though this comes with an additional layer of risk as missed payments could result in losing your home).

Further reading: 7 ways to pay off high interest debt

Build a stronger cash reserve

Few things provide more financial comfort than a healthy cash reserve. You should always aim to have at least 3 months of your living expenses set aside but when the economy gets shaky, it's best to shoot for 6+ months saved.

Why? Because if you lost your income for whatever reason, you'd be able to continue your way of life for at least half a year without having to take on any form of debt or change your work situation.

Review subscriptions

Alongside knowing your cash flow is reviewing your subscriptions. Everyone has at least a few monthly subscriptions that automatically pull from their checking account, but you may be surprised how many forgotten subscriptions are also still pulling money each month.

When you're reviewing your spending, you should be able to see odd recurring charges but I'm also a huge fan of Truebill (no affiliation), which shows you exactly what subscriptions you have so that you can easily go out and cancel any unnecessary ones.

I wrote a review of it a few months ago and highly recommend checking out the app.

Raise rates (if possible)

Not directly tied to money management itself, but a big opportunity for those who charge their own rates for work. Even though the economy may be tightening up, certain types of businesses might not be as affected as others, so the freelance or creative work you do may not be affected rate-wise.

But because you're an asset to these brands or businesses, you deserve appropriate compensation. Given inflation, raising rates is already justified but if you're specialized or experienced, it may be time to consider raising rates across the board to support yourself and generate more income.

Keep marketing

If you struggle with self-promotion, I get it. I do too. Tack on everything else going on in the world and self-promotion starts to feel gross at times. It can be a difficult line to walk but when it comes to your business and your livelihood, you need to keep marketing and putting yourself out there throughout a recession so that you can keep inbound leads and work opportunities. You may have to shift strategies and outreach methods, but don't let business dry up.

Consider in-house work

Piggy-backing off of the first piece of content in today's newsletter, it may be worth considering the transition to in-house work. There are a lot of places trying to hire and even though you might have to sacrifice some freedom, guaranteed income and benefits can be a godsend during a recession.

Look for opportunities

Lastly, uncertain times can present unique opportunities. This screenshot below from one of my favorite creators, Justin Moore, highlights some questions to ask yourself to help identify business & financial opportunities:


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