5 Mistakes To Avoid For A Healthy Influencer Money Mindset
The old proverb “more money, more problems” is a principle anyone can hold themselves to - but is especially true for influencers. What influences your influencer money mindset can really determine the success of your content creation business.
It’s important to be totally aware of the incoming and outgoing cash flow as a self-managed business owner. In the beginning, you might think you can easily manage all of your expenses and have a clear-cut idea of what your revenue looks like - that includes…
- knowing what a balanced budget looks like,
- taxes as a self-employed individual,
- growing your money over time, valuing your time (aka, when to say yes or no),
- And picking up additional skills on the side to strategize your content creation strategies.
Lots of “problems”, sure, but if you’re aware of the consequences that result from negligence or even ignorance, the extra responsibility you’re delegating to developing your influencer money mindset will graciously reward you later.
Maybe you’re skeptical because you don’t have a financial background, hate crunching numbers, or simply feel like you aren’t investing enough in your influencer hustle to justify the time (surprise - you are and it is VERY valuable). There’s plenty of reason to fall into bad habits, but it doesn’t mean they’re the right ones.
Part of growing your platform involves making the right money decisions.
It’ll leverage your business direction, proving you’re a sensible content creator who knows how to employ both creative and financial strategy (a great pair in your brand partnerships). You’ve fought half the battle - don’t forget to be sharp on the other end of your own business, as well.
There’s plenty of things you should avoid in achieving financial success as an influencer. If you wanna be proficient in every aspect and refine your financial habits, read on to learn what easy mistakes you should avoid when forming your influencer money mindset.
The 5 Most Common and Damaging Influencer Money Mindsets
1. Writing Off the Importance of a Financial Advisor and Assuming You Can Do Taxes Yourself
Being a self-employed individual, whether it’s your main stream of income or one of many, you’re likely earning enough to sustain a certain aspect of your lifestyle. With that comes taxes, and if you’re not fully aware of how to file properly as a freelancer/contractor/self-employed individual, you can land yourself into some hot waters.
Perhaps you’re new to the influencer space, have signed a few 1099 forms, got paid. You’ve got some idea of what the deal is in being a contract employee, but tax season confuses you, or you’ve made under the legal amount needed to file ($400, BTW).
Maybe you’ve decided to hire some help in creating your content - whether it’s a photographer, a video editor, or someone to assist in managing your social channels. Now that you can afford those conveniences, that sounds like a huge weight off your shoulders. However, part of that requires some proper bookkeeping on your side.
Listen: If you fit any of the above criteria, an accountant will be nothing but a benefit to you.
A few different financial experts weighed in on the subject, noting the importance of adding a financial adviser to your team: “Influencers realize they need wealth advisers early in their careers,” said John Mele, an executive director in Morgan Stanley’s sports and entertainment unit. “They are equally serious about monetizing their brand as well as protecting and growing the money they earn from it.”
Even if you’ve been in the game forever and think you’ve got your numbers down pat, it’s still worth seeing an accountant - even just to figure out some great investment opportunities, which we’ll touch on a little further into this post.
On a basic level, finding a good CPA can help you accomplish a few things.
- Making sure you’re filing properly (marking off the right deductions, figuring out what expenses aren’t taxable, and generally, making sure you’re paying the right amount to the IRS - aka, not too much)
- Reconciling credit and bank accounts
- Comprehensive financial reports for all of your incoming and outgoing expenses
- Managing purchase orders
- Financial advising - which aspects you should invest in within your business, and where you should probably cut down - a critical aspect of having a healthy influencer money mindset
Any CPA can specialize in balancing books and figuring out how to file your taxes appropriately, but try to find someone who is familiar with influencer marketing.
Did you know that products received via influencer gifting are considered taxable?
A spokesperson for the IRS told Bloomberg Tax that a gift can be a tax-free transfer if it’s given “out of detached and disinterested generosity”, which for brands, tends not to be the case most of the time - there’s usually a vested interest in influencer gifting on both the brand and influencer’s sides.
Both you and the brands you communicate with on a regular basis are aware of just how valuable influencer marketing is. But the key here is wowing with your healthy influencer money mindset - and knowing what’s mutually beneficial and what to accept - not just accepting free things on a whim.
If you find a financial adviser/accountant that knows you and understands your business, great. But don’t forget that you are the ultimate decision-maker, and mixing instincts/financial sensibility is always a winning combo.
2. Neglecting a Balanced Budget Because It’s a Side Hustle
If you’re a full-time influencer, you’re probably well-versed in the world of budgeting for your business. You’ve already got a devoted account for your expenses and know how much income/revenue is incoming/outgoing. But maybe you’re still a victim of impulse buying or making risky investments.
There are always parts of your influencer money mindset that can afford to grow.
But for the side hustle group, if you aren’t prioritizing your budgets for your influencing career, there’s no better time to start than now.
Maybe you’ve found yourself…
- Mixing business and your personal finances (only dipping into one account, using your personal credit card)
- Spending lavish amounts on gear, software, clothing because it can be “used for something else” if it doesn’t work out
- OR, paying little mind to the investment in your capital given how “little” you spend
The most central theme to budgeting is discipline, and if you already know how to properly budget your personal life, it should be a smooth transition to dealing with your business expenses. Assess your ROIs for every asset, whether it’s investing in clothes for a haul, or a new course to brush up on your social media strategy.
3. Saying Yes to Every Single Sponsorship/Idea
So many influencers hear the word “sponsorship”, and immediately categorize it under a good idea. They believe doing so naturally adds value to their brand, right? In reality, that couldn’t be further from the truth: when you’re accepting sponsorships left and right, you’re cheapening the value of your work.
They’re flattering, sure. A brand’s confidence in you is a nice ego boost. But it shouldn’t be all you see in making such a huge business decision. You’re entering something that’s supposed to be a win-win partnership.
Some basic questions to ask yourself when reviewing the value of a brand deal...
- Are the demands worth this brand deal?
- How flexible and how accessible is this company?
- Is there room to negotiate the terms of the partnership?
- What would be the long-term benefits of agreeing to this particular brand deal?
What are your non-negotiables? We’ve got some advice on how to navigate those for the future of influencer marketing.
In a 2019 study by Activate, over 58% of marketers reportedly said that influencers turned down brand partnerships over disagreements over the proposed compensation.
That’s still a shocking 42% who are likely accepting unfavorable sponsorships in this aspect - or hitting home runs every time they’re at-bat, which the likelihood of that is slim to none.
Emma’s Edition detailed a time where she was offered 4k for a partnership, only to say no. She broke down the responsibilities particular to the influencing job that she valued and realized the deliverables being demanded by the brand were unreasonable given the pay.
More influencers need to understand the power of saying no. There’s such a high level of autonomy in making that kind of decision - it’s empowering to make the best decision, not a decision you feel obligated to make.
Practice weighing your decisions and saying no. Sometimes it doesn’t seem so clear at the moment, but when the decision marinates and you realize how important your non-negotiables were, you’ll be glad you said no.
4. Downplaying the Importance of Investing Your Money
Liquid assets are your ally.
Investing and storing your money the right way is a key part of having a successful influencer money mindset. Your money sitting in a savings account is going to do just that - savings accounts have tiny APRs, and your money is better distributed elsewhere if you can do so.
In particular, liquid asset investments are reliable because they’re easily withdrawable, usually short-term, and stable.
Stocks are great, sure, and there are lots of great methods of putting your money away to allow it to grow without giving it a second thought. If you haven’t already, familiarize yourself with the stock market and where to invest - the Acorns app is a great place to start.
Some other ways of investing in liquid assets include...
- Bonds - a means of investing through government projects or companies that guarantees a repayment
- Mutual funds - these are acquired through contacting a broker or a fund manager, but essentially, are a portfolio of investments overseen and distributed into various financial securities such as stocks and bonds
- Money market funds (similar to mutual funds, these are low-risk low-yielding investments)
5. Refusing to Learn As a Means of Growing Your Business
Business owners never stop learning - and neither should you. You might think your eye for the latest trends in the influencer marketing space is good enough, your creative ideas, etc., but if you aren’t stimulating them outside of watching your peers, how are you going to differentiate yourself?
The same thing goes for business strategies. If you aren’t taking the time to invest your downtime in marketing courses (Google Analytics is free and is a thoroughly useful starting point), reading entrepreneurial literature (She Means Business by Carrie Green is a great read, FYI), or tools to increase the efficiency of your business, you’re always going to remain STAGNANT. Say goodbye to increasing engagement rates, hello to zero growth - completely out of tune with a healthy influencer money mindset.
Yeah, not quite the exchange you want...but don’t say I didn’t warn you.
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Maintaining a good influencer money mindset
Being financially literate is one of the key pillars of having a successful social media influencing business.
Having a healthy influencer money mindset will take you incredibly far. Whether it’s skipping out on an impulse buy, navigating tax season with a financial adviser, or equipping a nifty tool like Kalypso, avoiding these bad habits to improve your influencer money mindset is the key to expanding your business.
Embrace these changes, and sooner than later, you’ll see the results you want in various aspects of your business.