If you’re not meeting your income goals, it pays to dig deeper and figure out why.
- A side hustle is a great way to boost your income.
- If your earnings have been falling short, it could be because you’re spending too much to make that gig feasible.
Although side hustles are all the rage these days, many people routinely take on side gigs to boost their savings, pay off pesky debts, and work toward other goals. And some people just plain like having extra money they can use to spurge on things like vacations, concerts, clothing, and social events.
No matter your motivation for having a side hustle, your goal is no doubt to make a decent chunk of money from that gig. But if that hasn’t been the case lately, it could pay to take a deeper dive into the money you’re shelling out in the course of working that job.
Are you overspending to make money?
They say it takes money to make money, and that sentiment tends to hold true, at least to varying degrees. Imagine you work a classic office job that requires you to commute for 60 miles a day. Well, you’re going to spend some money on gas for your vehicle, and possibly for things like parking as well. That’s just the cost of bringing home a paycheck.
But there may come a point where you’re spending too much on your side hustle to make that job worthwhile. And so if you’re unhappy with your net earnings, it’s time to reassess the way you do that work and see if there’s a way to cut costs.
Let’s imagine you’re hired as a dog-walker with a rate of $15 an hour. If it costs you $5 in gas to reach the home of a client, and you’re spending another $2 out of pocket for dog treats for the happy little fellow you love to walk, suddenly, your earnings are virtually cut in half.
And oh yeah, there are taxes to consider. So when you make $15 an hour walking dogs on a freelance basis, you’re probably only bringing home more like $11 or $12 when you account for the share you owe the IRS. So when you subtract $7 from that reduced sum, your hourly rate suddenly isn’t looking all that impressive.
A better solution
If you enjoy your side hustle but are frustrated with the fact that it just hasn’t been as lucrative as you’d hoped, it may be time to rethink your approach. Going back to our example, if you’re going to walk dogs for $15 an hour, you may need to limit yourself to clients that cost $2 or less to get to by car. Or, you may decide to only take clients whose homes are farther away if you can walk a few different dogs in the area, because you’re already there.
You might also have to make the tough decision to stop buying treats for your furry friends. Or, you might need to raise your hourly rate. But before you give up on your side hustle, it’s worth seeing what adjustments you can make.
Remember, there’s nothing wrong with enjoying the work you do on the side. But at the end of the day, your foremost goal is probably to make money. And if that’s not happening at the pace you were hoping for, it pays to implement changes that allow you to bank more cash.
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