5 things to do with your side hustle money
Written by Cait Flanders
Monday, January 9th, 2017
If you read a lot of personal finance blogs, you're probably no stranger to the term "side hustle."
A side hustle is the work you do on top of your full-time job, in order to make extra money. And typically, you'll read that the work many people do for their side hustle is whatever they're really passionate about.
I started my own side hustle back in 2011, when I got my first freelance writing job. At the time, I was working in the public sector and desperately wanted to get more writing experience. So I worked all day, then spent my evenings and weekends writing blog posts and newsletters for clients.
Eventually, my side hustle helped me land a full-time managing editor job at a startup. And because I continued writing on the side, I even got to a point where I could quit that job and become a full-time freelancer. It was about the writing — not the money — but it didn't take long for me to see all the potential for what I could do with the extra income.
If you're thinking about starting a side hustle this year, here are some priorities you might want to assign for your extra income:
1. Set some aside for taxes
I know, I didn't start this list off with something fun — but I would be a bad personal finance blogger if I didn't mention this first! When you earn money on the side of a day job, the one thing you need to remember is that you'll have to pay tax on it at tax time. A good rule of thumb is to set aside 30%. And even if that hurts at first, remember that the point of earning extra money is to give you some more freedom. Being hit with a huge tax bill that you can't afford to pay won't really feel like freedom.
2. Pay down your debt
Now, if you're currently trying to pay off any outstanding debts, the money you earn from your side hustle could help you reach your goal that much sooner. The first few thousand dollars I made freelancing all went towards debt repayment, which helped me shave months off the time I thought it would take for me to be debt-free.
3. Save for your next goal
The next best thing side hustle income can help you do is save for and reach your financial goals sooner. It could go towards something small like a vacation, or something more long-term, like saving for a home or retirement. Personally, I used my side hustle income to save up an emergency fund that helped give me the confidence to quit my job and become a full-time freelancer.
4. Reinvest in your business
Aside from your personal finances, another thing you might consider doing with some of the extra money you earn is investing it back into your business. That could mean buying software or hardware that could upgrade your processes, taking a course that could help you level up a skill, or even hiring someone to help you.
5. Don't forget to have some fun!
Finally, when you're working this much — and working towards so many different goals — it's important to avoid burnout. Life is still meant to be lived, and you're allowed to have some fun! You could give yourself an allowance to go on a weekly date, save for something special you want to buy, or book a vacation. How you manage your extra money is personal. But again, remember that the point of a side hustle is to get some freedom, so enjoy it when you can!
This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content....
The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.
Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.