For many, side hustles are an essential part of their existence. With the cost of living increasing, side hustles become more attractive as a way to close the gap. Many people start to create content as a way to supplement their income. But there are many mistakes people make with regard to these side hustles. Most notably in terms of budget. So what do you need to do so you don’t go over budget? Here are some approaches to fine-tune your finances and maintain a successful side hustle.
Track your income and expenses for a successful side hustle
This should be a no-brainer for any job you have. Whether it’s a side hustle or a full blown business. One of the easiest ways to keep track of your side hustle expenses is to keep a spreadsheet. Consider using Excel or Google Sheets. The spreadsheet so list the date the money was received, the amount, and a short description of how it was received. This will help you keep a running tab of money coming in and going out.
A very common side hustle involves selling products for Avon. To sell Avon, become an Avon Representative. But one of the biggest mistakes people make while working for Avon is buying too many products at the start. The process of working for a company like this involves taking orders and then buying the items for the customers to reimburse you. If you don’t have much money, tracking your income or expenses is critical. Especially if you want this to a successful side hustle.
Price your services properly
Many people who start a side hustle think that they need to be competitive. Therefore they equate this to being cheaper. In order to ensure that you actually make money, you should calculate the costs of providing every aspect of your service or products. I know this sounds like a major “duh” moment. But so many people don’t account for all of their expenses. Especially when it comes to packaging materials! With realistic profit margins, this will give us a far better ability to keep on with our successful side hustle, rather than thinking it is a money pit.
If you aren’t offering a product or service, you may still have expenses to account for. If you are creating content, you will have to think about:
- your time spent making the content
- your expertise in the subject matter
- your camera equipment
- subscriptions you purchase to store or make content like Creative Cloud, DropBox, or Canva
- and your audience size or engagement rate
Don’t sell yourself short for whatever your side hustle is. Value yourself accordingly and the money will follow – even if it takes some time! This is the key to a successful side hustle.
Avoid unnecessary expenses for a successful side hustle
You’ve heard the expression “you got to spend money to make money”. This might be true with big businesses, but side hustles should have modest expenses. If you plan on creating ads for yourself, consider testing a few platforms. Not all platforms yield the best results. As such, it’s no use putting money in ads that don’t help with conversions. But remember to be conservative with your ad spend. Your side hustle should be making you more money than you spending it. If it isn’t, then don’t keep throwing money at it.
Additionally, you may plan on expanding your side hustle’s products or services offerings. Before doing that, take stock of how your current offerings are doing first. If they are selling out frequently, then consider expanding. But if you are just covering your expenses, focus on your current offerings first. Expanding too soon could potentially mean disaster for your bank account.
Separate the business from the personal
A side hustle is exactly that – a SIDE hustle. Not your main hustle. Therefore you have to determine how much time you can invest in it but also understand your financial objectives. If your side hustle ends up affecting you negatively, you will have to cut ties. But if it starts to expand quickly, you may have to consider what that means for you. Can you turn it into a full time job? Are you saving for a specific goal or are you looking to just supplement your income? When you open a separate bank account for your side hustle, you can track your income and expenses accurately. It makes preparing your taxes that much easier.
As much as we want to invest in a successful side hustle we really have to stick to the idea that it is purely on the side not just of our lives, but of everything. And we have to treat it accordingly to make sure that we don’t go beyond what we can realistically afford.