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.

Successful vs Unsuccessful People

Your habits and mindset has a great influence on your success, success with finances and life. The above infographic has been circulating after MaryEllen Tribby posted it on WorkingMomsOnly.com. It goes through some great tips and habits that you should institute if you want to be successful and some that you should drop to avoid not reaching success (notice I didn't say failure). There are definitely some key elements that should be highlighted.

 

1) Continuously gather knowledge and learn things that will help you move forward. When trying to accomplish a goal, learn all that you can about the subject. Learn about the tools and resources available to you to assist with accomplishing your goal. Unsuccessful people don't actively gather information and don't act on the knowledge that they do have. There's a vast amount of information available to help you master your finances and reach financial success. Actively seek it out and apply the knowledge when you acquire it.

2) Giving to others is necessary. Don't horde what you know and don't try to step on others to reach your goals. Many people have a fear of letting others know what they know, of giving to much away. You want others to help and promote you without doing the same for others? It doesn't work that way. Share information and tools and others will be more likely to do the same with you. If you come across a great resource for saving money, cutting costs, etc share the wealth and let others know. 

3) Accept responsibility for your failure. The fact that this is listed on the successful people side of the graphic says a lot. You cannot reach success without some failures. Don't give up in the face of failure. Learn the lesson and use that failure as a stepping stone to do even better. Say you wanted to pay off your debt and made a plan to do so but along came an emergency and you had to incur more debt. Establish an emergency fund so you'll be better prepared next time and move forward.

About the Author: Dr. Maria James
Maria James has a compassion for people that makes her involvement in Heal a Woman to Heal a Nation a sure fit. She is a biomedical scientist who is public health conscience and has always worked for the betterment of others. While an undergraduate student at Johns Hopkins University she co-founded an organization called STOP, which taught basic self-defense to women and children. Her has a passion for diverse communities led her to live in Costa Rica for three weeks to learn more about the culture and community. Maria also continues to pursue her other interests which include, Spanish and finance. Maria also founded the business Pocket of Money, LLC which provides tools and tips to help you take control of your money and live your best life.

5 End of The Year Tax Tips

Now is the time to save on taxes before the end of the year. Owe, just right, or refund. That’s the game for taxes. We would like for it to be just right (own nothing and receive nothing). However, most of us fall into the owe the government or refund from the government groups. With the tax rules for benefits and deductions changing almost every year, it can be hard to keep up and get it just right. Well, there are some common ones that haven’t changed. Yes you have until April to file taxes; however, there are steps you can take now to put more money towards your financial goals and save on taxes.

1) Increase contributions to retirement accounts.

Try to max out your tax-deferred retirement accounts before the end of the year. If you’re employed this will likely be a 401(k) or equivalent account. The maximum contribution is $18,000 or $24,000 if you’re over 50 years old. If you can’t max out you contribution, at least contribute enough to receive your employee match if offered by your company. Not sure if you have an employee match or how much it is? Contact your benefits office or HR.

You can also contribute to your Traditional IRA (individual retirement account). Contributions made to your Traditional IRA are not taxed. However, you will pay taxes on withdrawals. You can get a tax break now and allow the money to grow tax-free. Once it’s time to withdraw hopefully, you’ll be in a lower tax bracket and won’t have to pay as much taxes on the withdrawal of your money.

If you’re self-employed, outside of an IRA you may also have a solo 401(k). You can contribute 20% of your income up to $53,000. You can make tax-deferred contributions up until your business files taxes.

2) Withdraw distributions from a traditional IRA.

According to the IRS, when you’re over 70.5 years old, if you don’t distribute at least the minimum required amount then you’ll be punished with a 50% penalty on the amount you should have withdrawn. Yep, the government can take half of the minimum required distribution (RMD) if you don’t take it out. If you are the beneficiary of an IRA you also have to take out the RMD.

3) Delay the bonus.

If your company provides an end of the year bonus, see if you can delay it until after December 31st. The bonus will then apply to the following year, saving you on taxes this year. If you know you’ll be in the same or a lower tax bracket next year this is a great method to save on taxes.

4) Delay receipt of invoices.

As an entrepreneur, you can change the due date of your invoices to the following year. Income not received this year cannot be included in this year’s taxes. Delaying receipt of payments can save you money for this tax year. Again use this trick if you know you’ll be in the same or a lower tax bracket next year.

5) Donate to charity.

Donating to charity is another great way to decrease your tax burden for the year. If you haven’t made your charitable contributions, get them in by December 31st. Be sure to get a receipt of acknowledgement for the donation that shows the monetary value of the donation. If your donation is greater than $250 then you definitely need that receipt. However, if your donation is less you can also use your bank statement or credit card receipt as proof.

Tip for businesses:

Tax benefits can expire and unless you have your pulse on it you won’t know which benefits are expiring. If you have a business talk to a tax professional so that you make sure you take advantage of all the tax benefits for which you’re eligible.

Photo credit: Elvert Barnes

About Dr. Maria James

Dr. 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.

Your Number One Money Blocker

*As Seen On http://pocketofmoney.com/your-number-one-money-blocker/

Want to know the real reason why you aren’t earning the salary you want? Want to know why every time you make some money it goes out just as quickly? Do you wonder why you can’t move to a higher income bracket?

The reason for all of these issues is your money story. It’s your relationship with money. A money story based on lack and limitation will play out in your life repeatedly. Whether you realize it or not, you have an unhealthy relationship with money. This is especially true if you feel anxious or stressed out when you pay your bills.

Take a moment to observe your money relationship. Do you have a love/hate relationship with money? What emotions come up for you when you think about money? Are they positive or negative? How does your body respond? All of the negative reactions are proof that your money story is blocking your prosperity. Just like you, money doesn’t like to be where it’s not wanted and appreciated.

Don’t beat yourself up. It’s not your fault. You were totally unaware of the impact your money story has had on your life. It’s very important that you don’t attach any blame, guilt, anger, or shame to your financial situation. It’s just that – a situation. It doesn’t define you or determine your worth as a human being.

Money is simply an energetic number. The negative energy generated from your money story is transferred to your bank account. Your money story is a melting pot of your parent’s beliefs, societal standards of status, spiritual teachings, and your own personal experiences. The good news is that you can create a new money story for yourself starting right now.

In order to usher in prosperity you have to first become aware of your current money story. Pay attention to how you speak about money. Become aware of the fears you have about losing money or not having enough money. Notice the meaning you attach to money. For example, you may think being poor is more honorable than being rich. Don’t judge what comes up, just let it be. Be an impartial observer.

Second, reflect on where you first heard these ideas about money. Who told you money didn’t grow on trees? Were you told that money is the root of all evil? Did you have a bad experience with a wealthy person? Try to pinpoint when you began receiving these messages about money. Again, do not assign any blame. The people involved were simply repeating what they were taught.

Next, forgive yourself and everyone that contributed to your unhealthy money beliefs. Forgiveness will free you from the past. It’s not necessary to actually tell the person that you forgive them. Forgiveness is felt in the heart. Depending on how intense the emotions are you may have to forgive the same person several times. You’ll know that you’ve forgiven them when you can think of the incident without being pulled back in emotionally.

Finally, you’re ready to create a new money story. The old story and negative emotions must be replaced. Here’s how:
• Focus on feelings of gratitude when you think of and spend money.
• Read the cashier’s name tag and celebrate the fact that you can help him/her to feed their family.
• Make a list of all the amazing things money allows you to do.
• Create new beliefs that are aligned with your values instead of your fears. Like, my relationships strengthen as I earn more money.

Your original money story wasn’t created overnight. It will take consistent effort and awareness to create a new one. Notice the abundance that appears as you do. This may come in the form of money, ideas, opportunities, or support from others. Appreciate however it shows up. Remember, the more you have, then the more you can give to others. You’ll always get back what you give.

Your turn! Comment below and share your new money story.

HWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHN

Sarah Aderson, also known as the Leg-a-SHE Strategist, is an international speaker, best selling author, and product creator.  As the founder of Expand Your Heart, she transforms your services into digital and physical products.  Sarah empowers entrepreneurs to charge what they’re worth so they can leave a lasting legacy.

Sarah’s transformational product line is designed to help purposeful entrepreneurs de-stress, envision their dreams, and boldly declare their desires. She has a flair for packaging your passion into profits. Sarah shows you how to build an empire, not just a business. Get your free 2 Hour Product Creation course at www.expandyourheart.org

Photo credit: TaxRebate.org.uk

Women & Finance: You Have to Have Your Own Money Skills

I was speaking to a woman about money and monitoring expenses when she admitted that she “just let’s her husband handle everything.” When she said everything she meant everything. She had no idea what accounts they had or at which institutions they had them. She of course didn’t have the passwords to any accounts. She didn’t pay the bills and trusted and expected him to alert her if there was anything she really needed to know. I was shocked. Was this really happening in this day and age?
Apparently the number of women who handle the household finances went to 24 percent in 2013 according to Fidelity Investments. Wow only 24 percent. It’s better than it was but is still so low. Women were not as confident about their ability to handle the finances especially not investing and long-term financial planning.  This is especially troublesome since women are still outliving men. Between the 40-50 percent divorce rate and the fact that the life expectancy for women is longer than for men, at some point women will have to be fully in charge of the finances.
Even if you allow your spouse to have full control of the finances at least be well versed in what the household financial situation is. Both spouses should have a vested interest in the financial security of the household. Here are some ways and rules to come together over the finances:

1) The information for any shared household accounts should be known to both parties. Information such as the institution, account number, and account password.  Notice I shared accounts. If you subscribe to the ideology of a separate account for each and a joint account … hey that’s fine. As long as both parties agree and are honest.

2) Design the budget together. This way it’s clear to both parties where the money is going and why. Miscommunication here can lead to differing expectations on spending. If one person is unclear on the actual budget for a specific category then it will be much easier to overspend. Overspending in one category causes you to have to make up for it somehow, usually at the expense of your financial goals.

3) Have monthly finance meetings. Schedule the time on your calendars to sit down and check in on the financial plan and with each other. How well did you stay within the spending plan aka your budget? What needs to be tweaked for next month? How much progress did you make towards your goals? Make sure everyone is on the same page. It doesn’t have to be long, it’s a check in.
Guys, don’t think you’re saving her the trouble or the worry. Include her in the conversation and updates on the money. Women take an interest and do what you need to do to be more confident about financial decisions.

Grow your financial confidence:

1) Read (well continue reading since you’re here) financial blogs and books. There’s a lot of great information out there. Start reading and gathering the knowledge necessary to be an engaged participant in building your financial security.

2) Exercise your growing financial muscle. Go beyond the budgeting and household expenses. Have discussions about the long-term financial planning. Make sure you understand what the plan is for your financial security. Know how you will be able to survive and run your household during retirement. Talk about the retirement goal. Know the nest egg number and how close you are to it. Know the plan of how you will reach that number. Talk about the investment vehicles being used.

3) Attend the meetings or conversations with the financial advisor. Both spouses should be comfortable with this person. If either don’t feel comfortable talking to the financial advisor then it may be time to make a switch. This person is handling your money and investments, you should be comfortable asking any question about your money. No matter how silly you may think the question is! You should be able to ask “hey does money grow on trees?” and get a thought answer that doesn’t make you uncomfortable. You can then say you were just joking.
Both spouses should be involved in the financial security of the household. However, each person should have money management skills of their own.


Photo credit: The Urban Scot







About Dr. Maria James



Dr. 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.