Side-Hustle Income? Here’s how to manage that.

I have found that having a side-hustle is a lot like winning the lottery or receiving a large inheritance. Many people don’t know how to manage that amount of money when it starts coming in.  A side-hustle is no different.  We grow accustom to a certain level of income, and then, pow!, we’re getting this extra money and it feels like Christmas.  This is a great feeling, but if we don’t learn to control our emotions, we’ll end up just like most of the ones who win the lottery, empty-handed.  Here are 3 ways we can ensure we don’t blow every last penny and, instead, use it wisely to our benefit.

BUDGET, BUDGET, BUDGET

I can’t stress how important this is to do and do consistently.  It doesn’t matter if you make $1,000 a month or $50,000 a month, you HAVE to have a budget.  If you don’t know how, read “Do you know where your money is going?” to learn how to do a budget, and grab our budget form available to download.  Here’s why a budget is so critically important, especially when your side-hustle starts working:

  1. You know what’s coming in and you know where it’s all going
  2. “Unexpected” surprises (like Christmas, birthdays, children growing out of clothes, etc.) are now not such an emergency because you’re planning for them.
  3. When new income comes in, you can still live on the same budget and take care of that pesky debt, savings, or retirement instead of blowing it on pointless things.

Budgeting brings so much release of pressure when you’re doing it every month.  I really enjoy the freedom and such little stress we have when it comes to finances, and a budget is a huge part of that.  We put in how much should be coming in every month, and we knock it down to the penny and know where it’s all going.  If extra comes in, it’s like a bonus, but we sit down and talk about where it should go instead of just going out and spending it on anything and everything we always wanted.  Getting out of debt is critical for us and that’s where 95% of any extra money typically goes in any given month.

 

Save for Overhead

A lot of people don’t understand running a side-hustle does usually cost money.  If you’re in network marketing, you have a product to purchase every month, if you’re in manufacturing, you have to buy supplies, and if you’re in almost any and all types of business you have to plan for marketing, utilities and/or bills you’re using to get your self out there and seen so people buy from you.  These expenses are called overhead, and if you’re not planning for overhead while your side-hustle is bringing in money, you could be dooming yourself to fail.  Budgeting is a large part of this.  You can run a side-budget for your side-hustle and account for your overhead versus your income.  This is called a Profit & Loss statement or P&L.  Make sure you don’t doom your business before it really takes off by spending every last penny you make without considering your overhead and save for a rainy day. There will be times when you don’t make enough to cover the overhead expenses.  This is where a lot of people fall short.

 

Celebrate, but not TOO much

Ever see or known someone who received a large inheritance and/or won the lottery?  I certainly have, and as said before most of them no longer have that money.  Why?  Because they thought they could celebrate…. and celebrate….. and celebrate, until it was all gone and they were right back where they started.  Celebration is a good thing, it keeps morale up, it keeps you motivated, and if you have a spouse, helps them know you’re doing this for them.  The late hours and the missing events because you’re working a side-hustle need to be for a reason, and you need to make sure your family knows they’re that reason.  So take them out to a nice dinner, an amusement park, or a fun vacation, but don’t blow all of your money.  You can set a budget on these fun things too.  While a budget isn’t exactly the most fun thing you can do when getting ready to celebrate, it will save you a lot of heartache when you get back to the real world and still have money in your pocket.  I strongly encourage you to set goals and celebrate them when you reach them, but if, every time you celebrate, you blow all the money that came in, it wasn’t a victory because you’re right back where you started.

 

As you can see, most of these management techniques do go back to a budget, and that’s a critical step in all of our lives.  Learn to budget effectively and you’ll grow immensely. I hope this has helped you prepare for your upcoming successes in whatever side-hustle you’re working on.  I know it has for me and my family.  God Bless.

failtoplan

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