# My budget and planning for the future

## Video transcript

My name is Bryan Senti, my job is composer and small business owner and my salary fluctuates but last year it was around $250,000. So when I got into Carnegie Mellon, I was fortunate enough to get a sizable scholarship and I believe I was left with$50,000 in student loans and my father at the time told me that he would pay it off. And instead, I convinced him to use that money towards a down payment of a house. So when I got into Yale, he used that money to purchase a house in New Haven and I was lucky enough to live there, I didn't have any room and board. It was a two-bedroom so I rented it out, I rented the second bedroom out, and at one point, I actually slept on the couch and rented both rooms out but after I graduated from Yale, we sold the house and he got his $50,000 back and I got the profit which was around 40 grand at the time. For me, living in New York just in general, people figured out, you figure out where to get an apartment or sharing an apartment. As a musician though it's tricky because typically you're forced to write at home. It was only until right before I left New York that I actually could afford, I had an$1800 a month studio, recording studio that I was working out of. But, you know. When you first get to New York, $1800 studio, if that was your main apartment, that would be too expensive so so it's tricky on that front, just figuring out where you're gonna be able to work is tricky as a musician. But for me, also with New York City, the lifestyle of New York City, while beautiful, exciting, energetic, is such that you're constantly spending money wherever, whatever you do. And it's expensive, lunch is$40, dinner is $60, a couple drinks here is$20, it's just, every day you're spending $100 plus. Especially when you're in the music field where part of the game is being a social person, part of it is networking and going to shows. I was living in an apartment that cost about, I wanna say$1400 a person so that was $1400, I don't even think that included utilities at the time but$1400, downtown Brooklyn, and then $1800 for a recording studio so my$3200 not including utilities and then trying to go out all the time and living this life that essentially existed on the streets from cab to cab and train to train and I just felt, it was completely untenable. I was just never gonna be able to get any further because whatever money I made, it immediately evaporated. So for me, moving to Los Angeles while there are definitely interesting benefits and opportunities from a creative standpoint, for me it was more about a lifestyle change. I had been talking to a music supervisor who told me, don't move to LA unless this is actually where you wanna live, don't move here as a business move. I felt a little bit unhinged in New York, I mean I love New York City but you're constantly running around, you constantly feel a lot of financial pressure and you feel a lot of competition and a lot of just, it's just very an intense lifestyle so for me, LA was an opportunity to create more of a nuclear home, I eat at home, I stay in my neighborhood, I kind of go out a little bit less and I would say that I work more on my own stuff. So my salary last year was $246,585 and I have an LLC charted in New Jersey and it allows me to do or it allows me to be taxed in a past-three manner so I'm essentially taxed as an individual. As I mentioned, my full salary's$246,585 and from there I start to deduct business expenses, the first of which on my return was advertising, which was $249, then the big one, which was commissions and fees, which includes all the people I hire, including my agent and my manager, and that amounted to$69,858. After that, I have a line item for depreciation which is the depreciation of the gear that I have, microphones and recording equipment. That was $7,997. After that, we have insurance, which is both for travel and for my gear and that amounted to$3,183. So for legal fees, which amounted to $9,050, this includes my ENO insurance, which is airs and emissions so just in case I were to accidentally get into a situation where somebody was claiming that I had plagiarized their music or one of my composers had plagiarized their music, that insurance is to cover the legal fees for a suit in that area. After that, I have$12,133 in expenses for my office which for me, for most of the year, was in my own house or in my own home. Then I have $20,401 for gear, every year I buy new equipment, whether they be plug-ins or microphones or instruments. After that, I had$4,189 for supplies for my business. And then I had around $16,376 for travel, travel to various clients that pitched new projects. And then I have$13,569 for meals and entertainment and then I have $8,811 for other expenses and those include additional advertising, dues and subscriptions, whether those be for the union or for programs that I have that require, music programs that I have that require subscriptions. It also includes wardrobe, gifts to clients, and auto rentals that I had. So my total expenses were$165,816 so you need to deduct that from my entire salary and what you're left with is a profit of $86,999 but after that, I need to start paying my own personal taxes so I have a self-employment tax, which was$9,423 last year. Then I owed the IRS personally 7000 and I owed the state of New York $3700 because I moved from New York actually to California so my monthly salary at this point, when you deduct that, is$5,583. From there, I have my regular monthly expenses. So the rest of my rent, which wasn't deducted from the office was $500, the rest of my utilities,$50. Of course, the rest of the internet, the phone, the car, which amounted to $200, my student loans, which are$200 a month, my gym membership, which is 140 bucks and the food that I use or food that I make at home every month which is $800. So when you deduct that, I'm left with the savings of$2,893 a month and last year, I used every penny of that to purchase my new home, so I used that in the form of a down payment. Right now, I mean I have, I've been playing with a little bit of money in the stock market, though I don't know entirely that that's the best place to go about saving for the future, it's more just fun for now. But my goal in terms of saving is that, I have a project right now that I'm working on that's about to close and that's, that chunk of money I know is going to a Roth IRA afterwards. And so I guess that's how I go about savings, I know, there are certain projects that when they're big enough and when they close, I'm gonna start moving this money into different areas where I can actually save. I think savings and an emergency fund to me are different. So for me, I kind of have a rule that I want at least 20 to 30 grand in my bank account at any time. So I feel like if you can, if one can stick to a number that they always have in their bank account, that kinda becomes a good soft measure as to you don't overspend that. In that 20 to 30 grand that I keep in my business bank account, there is kind of an implied emergency fund within that. So I don't let things go to zero. Now with regards to savings, I do wanna save more. I look at the house as a form of savings, I took all the savings that I'd had before and put it in this house. And so I'm happy with that. Outside of that, like I was mentioning before, I had allocated a certain project that I knew that was gonna be relatively lucrative to the goal of putting it in a Roth IRA or at least some portion of it in a Roth IRA. What I learned about money as I started working is that you can always make money if that's your only goal. It gets trickier as you start to mix the goal of making money with creative pursuits. But the truth of the matter is is if you took a job in finance or threw yourself simply into advertising, you could make money, people make lots of money doing advertising music. Now if you wanna have a career in film and also do advertising, film obviously makes less money. Making a record makes less money. So it's just, again, parsing through how big of a divide it's gonna be between the things you actually wanna be doing and what are the things that are actually making money. The other thing that I learned about making money 'cause I think this is important, is that it's important to have, if you are fortunate enough to be in the position of the person hiring, it's important to have a code of ethics, I think when you own a business and things get tough, sometimes of your own creation, you can pass along the buck to other people so if you're the one hiring people, you could easily run the numbers on them and eyeball and pay them less than you think is fair simply because you're trying to make, pad your bank account because of something that happened to you, and I think it's really important that business owners just have a code of ethics so that we don't all suffer from essentially the devaluation of music, which is happening right now.