While some are winding down as the year comes to an end, there’s another group of people getting fired up and ready to take on the new year. Which group do you belong to?
Me? I’m in the middle. It’s been a long and productive year, so I winding down and reflecting, but at the same time, I’m gearing up for the year to come with new plans, new goals, and new additions to our current lifestyle with the assistance of my side hustles.
With this in mind, I want to speak to the people who are hopping on the side hustle train for the first time, or even for those who are continuing with their side hustle.
What is a Side Hustle?
First, let’s address the side hustle verbiage. A side hustle is another stream of income that you generate in addition to your main position. And, while it’s easy to get excited about the prospect of earning extra income from your side hustle, it’s important to have a plan of action in place before you start spending your hard-earned money.
Financial Advice From My Dad Growing Up
When I was growing up, my dad didn’t refer to it as a side hustle. Instead, he would explain to us the importance of having at least five streams of monthly income.
He would explain to us that each stream of income would not be huge, but with each stream of income combined, we would be able to live a comfortable lifestyle.
In addition to him encouraging us to have multiple streams of income, he showed myself, my siblings, and my cousins how to create a simple monthly budget in a notebook to stay on track.
To make sure you’re saving as much as possible from your side hustle, develop your plan or budget and set goals on how you plan to spend your money each month based on these three variables: your income, your expenses, and any remaining side hustle funds.
Can you answer these questions?
- Why are you working to create another stream of income?
- What are your plans for the money?
Know What You want to Earn
First and foremost, don’t rush into starting a side hustle. This isn’t something you want to do just because everyone else is doing it. Take some time and really think about what you want your side hustle income to be.
For example, do you want to start something new from scratch? Or, do you want to simply pick up a part-time job 20 hours per week?
Regardless of which path that you choose, know that the income that you bring in will fluctuate. Therefore, knowing how much money you want (and need) will ensure that you plan accordingly as you start making money on the side.
For example, some questions to consider include the following:
- Is my current income meeting my expenses?
- Is there a goal that I’m working towards to use this money towards?
Set Some Goals
In order to have a realistic idea of what your side hustle will earn you in income, set goals. How much do you want to make? What about savings and other financial goals? A goal is just that: a target. It’s not an expectation; it’s something you can aim toward that also gives you something concrete by which to measure your progress.
And, as a note, make sure your goals vary. Have some small ones so that you can feel good and celebrate rather quickly. But, also have some medium and long-term goals as well.
Create a Plan for Your Money (Budget)
We all make money decisions every day, but if you want to get serious about your money, you have to have a plan. In order to create a successful plan for your money, you need a budget.
Creating a budget is pretty simple: first, list all of your income and subtract all of your expenses.
If there’s anything left over, congratulations—you can save it or spend it however you like!
I would also encourage you to keep your side hustle income separate from your main income.
Track Your Progress
Don’t make like you know where your money is going when you don’t—have an app or some other way of keeping track of what you spend. It might seem boring and tedious, but having data will help make your financial decisions that much easier. It can also save you from overspending and help you to make your money last.
Final Thoughts
As you are gearing up for your side hustles or additional streams of income, remember to have a plan for your money and to also pay yourself first. By paying yourself first and putting aside a chunk of change from each paycheck, you’ll have that much more to work with when it comes to your goals and investing in yourself.
Remember, if you work hard on your job, you’ll earn a living. But, if you work hard on yourself, you’ll earn a fortune. -Jim Rhon
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