Dear Not Making Enough, As a financial wellness instructor, I have been hearing a lot of people talk about not earning enough money. You know, I am going to just say it…That stinks! What can you do when you don’t earn enough money? Well, one option is to start a side hustle.
What is a Side Hustle?
A side hustle is a job that you can do to make some extra money. Side hustles are usually done outside of your regular employment. So, for instance, if, for your full time job, you work a 9 to 5 job Mondays through Fridays, you could work a side hustle during the evenings or on weekends.
Also, many people work side hustles when they are between full time jobs.
When Should You Start a Side Hustle?
Yesterday. You didn’t start yesterday? Start now! Start a side hustle now.
Do you need some extra money to pay your bills? Start a side hustle now.
Do you need money to invest in the stock market? Start a side hustle now.
Are you hoping to buy some real estate one day? Start a side hustle now.
Are you hoping to be a stay home parent one day? Start a side hustle now.
Do you want to start saving money for your child’s education? Start a side hustle now.
Do you want to be able to have an investment account for your child? Start a side hustle now.
Do you want to pay off your student loans faster? Start a side hustle now.
Do you want extra money to allow you to travel? Start a side hustle now.
Can a Job on the Side Become a Full Time Job?
A job on the side can definitely become a full time job. A side hustle can become a full time job when it starts making enough money for you to live on.
Some Things To Keep In Mind Before Quitting Your Job To Job and Doing Your Side Hustle Full Time
I have a friend who was bringing home approximately $48,000 a year from her full time job.
She was also earning money in a side gig selling digital products online. Eventually, she reached a point in which she was earning $48,000 a year from her side hustle.
So, when she met with her accountant at tax time, she mentioned the idea that she was considering quitting her full time job, since she was bringing home just as much from her digital products. She was surprised by his response.
Some things that her accountant told her to keep in mind:
- The amount that she was bringing home from her full time was after tax, while the side hustle money was pre-tax.
- The amount that she would have to pay for the taxes from selling her digital products would be higher than her full time job because she would have to pay both her portion of taxes that go toward social security and the portion that her employer currently pays.
- The amount that she brings home from her full time job, is after she has contributed toward her employer-provided health insurance. She pays toward her employer provided health insurance. But what she pays is a lot less than she would have to pay in her self-employed status as a digital product creator.
I highly suggest that you keep these types of things in mind also.
Let me reiterate, to emphasize the answer to one question that I often hear discussed…
Do I Have To Pay Taxes On My Side Hustle Money?
Yes. You have to pay taxes on your side job money. This includes money that is earned through side jobs in which you are paid in cash. (Note: This is not tax advice. I am not an accountant. Talk to your accountant, lawyer, or other expert on this.)
I suggest that you don’t wait until the end of the year. Set tax money aside as you earn. Talk to your tax advisor for a suggestion on what percentage to set aside.
I am a firm believer in utilizing multiple jobs at various points throughout life.
Not only is having a side job a way to earn extra money, but it is also a way to develop new skills or engage in a personal passion like a creative outlet. In fact, I recently had a side hustle being an administrative assistant.
Five Common Side Hustles
- Dog walking – Dog walking is a popular side job for those who like dogs. Not only do you make money, but you also get to go for walks outside with furry friends. Fun exercise!
- Babysitting – You can offer evening or weekend babysitting. You can also offer a once a month date night babysitting service.
- Pet sitting – Pet sitting is another side job involving pets. You can either do it at the client’s home or in your own home. It depends on the client.
- Driving for Lyft and/or Uber – Driving for Lyft or Uber is a way for those who have a reliable car to earn extra income. As a driver for one of these services, you are similar to being a cab driver.
- Tutoring – You can tutor or coach people based on your own skills.
If none of the ideas above are for you, consider offering a service that people will pay you for, to buy back their time. Then, once you start doing a service for someone, keep your eyes and ears open to see if there may be another service that you can offer that same person.
Key Takeaways: What Is a Side Hustle?
- A side hustle is a job that you have over and above your full time job, or in between your full time jobs.
- You should consider having a side job if you want and/or need more money.
- A side job can become a full-time job.
- Before quitting your full time job and turning your side gig into your full time job, consider the benefits (such as health insurance and a retirement fund) that your full time job provides.
- No matter how you are paid, you have to pay taxes on your side gig income.
- There are a lot of different ways to earn a side income. Some common ways include, dog walking, pet sitting, baby sitting, driving for Lyft or Uber, and tutoring.
- Another possible way to think of a side hustle idea: Consider offering a service that people will pay you for, to buy back their time.
You may need to start a side job. If you do, I hope that you do not waste the money. I hope that you use the money to make your future one in which you do not need to have an extra job.
May you have a side hustle optional life!
Best,
Rich Mom
Looking for more information from Rich Mom? Check out:
Why Have Multiple Streams of Income?
Understanding Checking Accounts
Building Wealth In Your Twenties
Here is a book that has lots of information on this topic;
Clever Girl Finance: The Side Hustle Guide: Build a Successful Side Hustle and Increase Your Income