Making the Most of My Side Hustle Money

Starting a side hustle instead of simply obtaining a second job is growing in popularity, and it’s not only millenials. According to the Kauffman Foundation Report: 2015 Kauffman Index Startup Activity, people 65-74 years old make up 25.8% of new entrepreneurs. Most begin a side hustle to get extra money or with the aim of turning it into a small business. However, are you making the most of your side hustle money?

  I’ve heard a lot of people call money from their side hustle, fun money. This usually means:

• they aren’t paying attention to how much money they are truly making,
• they don’t know if they’re making a profit, and
• they aren’t disciplined with spending the money.

 Well let me put it like this, if you want to increase the revenue and position your side hustle to become a small business, then you have to treat it like a business. Even, if you have no plans to build a business that will allow you to transition to being a full-time entrepreneur, still treat your venture as a business. At the bare minimum, do the actions below.

 1) Track revenue, expenses, and your time.

You should know how much time you spend on creating and delivering products or services. Also track how much revenue is earned and how much money it costs you to create and deliver the products or service per month. This will allow you to determine if you’re truly making money. You should have a profit, money left over after subtracting the expenses from the revenue.

2) Designate what the revenue will be used to do.

If you feel like you’re drowning in bills or debt, then definitely go ahead and use some the side hustle money to pay those expenses. If the revenue is “fun” money then be strategic and put some of that money towards financial goals, such as completing an emergency fund, investing for retirement, and paying down any debt. You can still have fun, but ensure your financial security as well.

 3) Re-invest back into the business.

If you want to increase the money coming in from your side hustle then you will need to re-invest some of the revenue back into the business. Until you’re making a nice sized profit, reinvest 90-100% of the revenue back into the business. You want to invest in more business training, training in your field, systems for the business, materials etc. You’ll definitely see your revenue increase when you invest money back into the business. The first year and a half in business, 100% of my revenue went back into the business.

 4) Price yourself competitively.

Having the lowest prices is not a pricing or business strategy. Make sure you’re making a profit from each sale. Also check the pricing for your industry and market. How do you compare to others? You want to have competitive pricing, but also make it clear to your potential clients and customers the value in your product or service, which goes beyond price.

Dr. Maria James, The Money Scientist, has expertise with designing income management, debt management, and wealth strategies to help you live your best life. She is the founder of Pocket of Money, LLC and the creator of The Wealth Protocol™. Dr. James has also been a guest financial expert on ESSENCE, WEAA, Madame Noire and more.