How to deal with unstable income – tips for social media influencers

For influencers, income instability is best solved by prevention. Saving as much money as you can while times are good is critical.  Try asking yourself this question:

“If I were making a far less humble living in five years, let’s say $80,000 a year, would I want to be still paying for this if it meant having to pinch pennies?”

Or even:

“How would I afford this if I were making half of what I earn now?”

These are the questions you need to ask to avoid becoming financially slaughtered by unstable income. Try to stay grounded (which is hard if you are earning super high income) and don’t overcommit yourself. Safe is better than sorry. By making large purchases after you have established a strong financial foundation will allow you to continue living a good life even when income dips.

Consider your financial commitments wisely and save as much as possible, thinking as if your stint as a social media influencer were going to be over tomorrow.

Case study

We worked with one influencer, let’s call her Samantha. She had tripled her income in the last year and was expecting this year to be the same or more. She was wondering how to balance the priorities of saving money and buying a home. Her goal was in 3 years she could fund her basic lifestyle of $100,000/year out of an investment portfolio.

We helped her decide a purchase price and she bought her first home with an affordable mortgage payment. Next she paid herself a salary and lived within that, max funding her retirement accounts, and everything else when into her investments. In less than 3 years she has hit her investment goal.

Now with an emergency portfolio set aside to grow she has the safety net that income could go to zero and she would be fine. She is saving for her dream home and will turn her current home into a rental property at that time. She just purchased herself and her mom nice cars and took her family on a dream vacation.

#2 Diversify your revenue streams

There is a multitude of ways that you could earn money as a social media influencer. It makes good business sense to branch out and find alternative ways of monetizing your social media following. You may want to speak with your agency or other social media influencers who have done this before.

Here are some typical ways that social media influencers branch out and reduce income instability:

• • Running paid retreats or getaway weekends

• • Asking for donations through Patreon

• • Paid sponsorships  

• • Selling your own branded products

• • Sell digital products like online courses or exclusive content subscriptions

• • Posting affiliate links

• • Exploring multiple platforms like a podcast or an emerging platform

This way, you aren’t putting all of your eggs in one basket when it comes to earning money from your social media channel.

#3 Put your savings to work

You also may diversify your income by way of investment. Here are some ways you can generate additional earnings using the money you have saved from your channel:

• • Investing in cash flowing real estate

• • Buying stocks that pay dividends or bonds that pay interest payments

• • Investing preferred stocks that pay a dividend

• • Investing the stock market and earning appreciation on your shares

All of the investment options above are dependent upon your unique goals, risk tolerance, and preferences. It’s best to speak with a financial advisor if you have questions.

#4 Create a financial plan

One way to manage the risk of income instability is to be prepared for it. Conduct a risk assessment and map out what your finances look like after:

• • A 5% drop in income

• • A 10% drop in income

• • A 50% drop in income

How would you adjust?

Which expenses would be flexible, and which would you be unable to eliminate?

Do you have an emergency fund, a pile of cash set aside to support your living expenses for 6-9 months if your income were to decline this way? This type of risk assessment is best performed along with an overall financial plan and budget. This can help you prepare for any variability in your revenues from your social media channel.

Don’t be a victim of income instability!

Social media success is a boon – and it can be short-lived – but that doesn’t mean your wealth has to be. Making smart moves can help foster a healthy long term financial situation for you, regardless of what happens with your social media channel.

We are financial advisors for social media influencers. If you wish to speak with us, please set up a time.