Personal Finance For Side Hustles

If you’re a tried-and-true Millennial, there’s a good chance you’re one of the 31% who have a side hustle. Maybe you don’t call it that—but you pick up gigs here or there, channel Sophia Amoruso, and sell your thrift store finds on Poshmark. Or just love illustrating art prints (and happen to sell them on Etsy, too).

Whatever you call it, if you’re making money on top of your primary full-time job, it’s a side hustle. And it pays: a recent survey from Bankrate shows that for side hustlers, the average monthly income is $1,122. So how are you managing it? For The Good Trade’s personal finance week, here are some tips about how to manage your finances well in the gig economy.

Set Your Goals and Rates

What’s the minimum you’re willing to work for, and under what conditions? This is an important question to consider when you’re looking for opportunities. Think through whether your goals are purely financial (you’ll take any job that pays) or strategic (you want to have fun in addition to making money, get more “serious” about your hobby, or simply learn a new skill). Make sure you keep this in mind when you are looking for opportunities and how you set your rates.  

If your goals are purely financial, you can start by referencing your current base rate at your primary job (or similar market rates, based on your experience) as a ballpark. Personally speaking, the lowest hourly rate for a side project I’ll take has to be a minimum of 1.25 times my current hourly base salary at my full-time job, in order to be worth my time. If you’re not sure what to charge (or are a newbie), it’s okay to start lower to get projects and build a repertoire of experience. Don’t forget there’s also a “price” that comes with the mental energy necessary to pursue side gigs as well, which usually cuts into your evening or weekend hours. What value would you put on your time? 

There’s also a “price” that comes with the mental energy necessary to pursue side gigs as well, which usually cuts into your evening or weekend hours.

Most seasoned freelancers will also evaluate their rates on an annual basis—whether that’s your hourly base or refining the types of “gigs” you do. Especially if you have multiple side gigs, it’s important to think about how much income, learning, or enjoyment the work is still bringing. If your barista job at $11/hour isn’t quite cutting it, but you’ve had an opportunity to become a private tutor for double the rate, maybe it’s time to consider switching up how much time you spend at the coffee shop. That’s just money talking: there are plenty of reasons to pursue side gigs for reasons other than money (for example, if you’ve always wanted to learn how to make latte art!), but if you have a financial goal in mind, you’ll need to be lean about how you value your time. 

Track Your Expenses Meticulously 

There are plenty of free templates for spreadsheets, invoicing, and other tools online to help you keep an accurate log of your hours and purchases.

When you’re doing a side gig, make sure that you are equipped with the right tools in order to track not only your time, but also your expenses. There are plenty of free templates for spreadsheets, invoicing, and other tools online to help you keep an accurate log of your hours and purchases. PayPal and FreshBooks are both great options that have easy-to-follow options for invoicing clients and record keeping. 

Some financial advisors also recommend opening a separate checking account to keep track of the ins and outs of your hustle. These are not just paid invoices, but also any materials you might be using to keep your side gig afloat (co-working space rent, a new computer, desk supplies, etc.). 

This clean-cut divide—plus up-to-date personal accounting—will help you later during tax season when Uncle Sam comes inevitably knocking. If you've been side-hustling for some while, the Form 1099-MISC for self-employed freelancers and gig economy participants alike is no stranger to you. As of 2019, if you make more than $400 net a year, you must pay self-employment taxes. On the bright side, logged expenses will also help you take advantage of tax write-offs. For example, did you know that you can write off the expense of a home office space (that you don’t also use for personal reasons) or mileage on your car that you use for business? So get friendly with the Form 1099-MISC, which employers will provide, and tax deductions.

Reinvest Your Profits

You probably hear the “i” word all the time from your parents or workplace HR bulletins, but when it comes to investing in your side gig, we’re not just talking Roth IRAs and 401(k)s. Rather, instead of just thinking of your extra income as disposable income, it can be worthwhile to scale up and re-invest some of your profits into developing your skills or the business itself. Attend a conference. Take an online class. Invest in some nice equipment—or even if your side hustle is people-facing, maybe nicer work clothes, too.

Instead of just thinking of your extra income as disposable income, it can be worthwhile to scale up and re-invest some of your profits into developing your skills or the business itself.

I intentionally have a tab of my budget spreadsheet titled “Creative,” where I keep track of both expenses and “wish list” items of how I want to grow my skills and side hustle next. Things on there include (finally) splurging for a DSLR camera, website maintenance fees, and registration costs for workshops or conferences I want to attend. While I don’t set a specific percentage of my income to go towards self-development (some experts recommend 3-5%), I do always make sure to keep a running list so I am aware and intentional about it!

Explore New Side Gigs

The gig economy allows us not only to derive our professional growth from one job, but from many, and extend ourselves into new fields. For new moms, people with disabilities, or those who just need a change in scenery to spice things up, having a side gig can be empowering and exciting. 

Depending on your financial or personal goals, there are always new croppings of side gigs you can take on. If your time allows, or your typical freelance work is experiencing a lull, try some new part-time jobs that allow you to branch out in new ways. The Uber-ization of the service economy has plenty of options you can’t knock until you try—dog walking with Wag, hosting an experience in your city with Airbnb Experiences, or the classics like tutoring and babysitting. If it’s winter time, many local retailers are also in high-demand for seasonal workers for the holiday season. What’s important is that you are mindful of your choices and finances.

Do you have any tips for how to manage your money as someone with a side hustle? Comment below! 


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Alice is a California-grown writer thinking on the things shaping urban living, the modern woman, and living a conscious life of impact in light of a bigger world. A graduate of Northwestern University's j-school, she spent time abroad working with a microfinance project in Peru before transitioning into a 9-5 in the global development sector. When she's not daydreaming about opening a social impact coffee shop, you can find her traveling, plié-ing at the barre studio, or curled up with a good book. Follow her latest creative endeavors and musings at The Kind Citizen or on Instagram at @alice.zhng.