Keeping Track of Income and Expenditure

In order for students to understand how well they're doing in their trade, they need to maintain a spreadsheet that documents both:

• Income Coming In
• Expenditure Going Out

Now, this may sound simplistic, but there is no magic formula; it's really just about tracking what's coming in and what's going out. At the end of the day, the goal is to have a balance where hopefully, you have more income than expenditure.

Importance of Basic Accounting Knowledge

As far as their accounting is concerned, students must have a basic knowledge of what this means, which includes:

• Keeping receipts for all purchases

A Real-Life Example

A young artist came to see me in September of 2014 and said, "I think I'm going to be signed at some time in the near future. What do I do?"

We provided him with guidelines, which included:

• Keeping receipts every time he bought new strings for his guitar
• Documenting travel expenses on public transport or any other transportation

By following these basic steps, students can ensure they are keeping track of their financial health effectively.