Starting a side hustle can be an excellent way to make money. Whether you have ambitions of growing your savings, paying off debts or simply increasing your earnings, it’s handy to have a side hustle to boost your income.
But what should you do with the extra income coming in? Should you spend it? Save it? Invest it? There are many options available to you, including some you might not have thought of before.
It’s up to you what you do with your additional income, but to give you some inspiration – here are some suggestions for what to do with your side hustle earnings.
Image Credit: Unsplash under Creative Commons
Keep track of it
When you start earning money from your side hustle, it’s easy to spend the money as it comes in. But if you don’t keep track of it, you could soon run into all sorts of problems. There are steps you should take to manage your freelance income, such as opening a separate bank account and setting up payment spreadsheets and invoicing systems. If you don’t keep track of your money coming in, you could find yourself being owed money by your clients and facing some serious issues recovering it.
Keeping track of your freelance income will also help you see how much money you’re bringing in. Your side hustle could be worth more than you imagined, and could even turn into a full-time role if you play your cards right. Monitor how much you’re earning, and take note of any trends that could help you grow your income further.
Report it
Just as you do with your income from your main job, you’ll have to pay taxes on most side hustle income. Unless you choose to pursue match betting, you will need to file self-assessment to declare your earnings. Keep track of any expenses that you incur as a result of your freelance earnings, and seek advice if you’re unsure of how to file your tax return.
Depending on how much you earn, you might not need to pay tax on your side hustle, so it’s worth reading into your rights and responsibilities to help you understand what’s required. Many people with a side hustle or freelance income hire a freelancer to keep track of their income and file their taxes on their behalf, which can be a good investment if you’re overwhelmed by your finances.
Pay off your debts with it
If you’ve got extra income coming into your home, then it makes sense to use it to pay off your debts. Any debts that you have that incur interest are costing you money, so if you want to get out of debt faster, use your side hustle earnings to clear it quicker. Doing this will ease the pressure on your main household income, and will put you in a better financial situation in the future.
Try to avoid getting into the habit of spending more because you’re earning more. If your freelance earnings were to suddenly decrease because of work drying up, for example, you don’t want to become too used to a lifestyle that you can no longer afford. This could lead to further debts and leave you in a worse position than when you started.
Save it
Side hustle income can be a good way to add to your existing earnings, which can help you to save more money. There are different things you can save for, such as holidays, house deposit, home improvements and for your retirement – whatever you want to save for, your side hustle income can help make it happen.
If you’re able to budget and manage your existing earnings, you should treat any additional income as a bonus. Try to make do without it by saving it, and dipping into your savings as and when needed.
Invest it in yourself
If you were running a business, you’d be using your profits to invest it back into the business. With your freelance venture or side hustle, the only thing you need to invest in is yourself. Could some training and development help you enhance your skills?
There are different ways you can invest in yourself. From embarking on further education to giving yourself some time off to pursue your interests, you can use your extra income as a way to boost your happiness and take the time to do the things you enjoy. If you hope your side hustle will turn into something full-time, it could be worth paying to do qualifications or undertake training that will help you make it possible.
Invest it in your future
Being able to invest in your future is one of the benefits of starting a side hustle. You can use the income to invest in property, for example, which will help you to build a beneficial retirement portfolio. Investigate the different options that are available to you to help you save for retirement, helping to ease any concerns you might have about your financial future.
If you’ve been putting off home improvements, why not put your side hustle towards them? Investing in your home can be a good way to increase its value, as well as helping you to make your dream home. From adding extensions to modernising your home, work out what you can afford to do using your side hustle earnings and make it happen.
Do some good with it
When you have very little disposable income, it can be difficult to be charitable or help with good causes. But with some additional money coming in, you could use it to do some good. Help a charity or support a local cause through donations as well as volunteering your time. Volunteering can be a great way to make a difference and can help you grow your networks too.
Becoming successful through your side hustle can be a great example to set to others. Take the lead from successful women like Cynthia Telles, and use your position for some philanthropy. It’ll help you set a good example to others and make sure that you stay humble too.
Share the secrets of your success
More and more people are looking for ways to generate extra income for themselves. The internet offers many possibilities when it comes to making money, and if you’ve found something that works, why not help others make a success of it too? Start a blog, share your advice or write an eBook that allows others to reach their goals and find success on the side.
Treat yourself
It’s good to be sensible with money, but you should also be able to enjoy it from time to time! Making money from a side hustle often involves hard work, so why not reward your hard work by treating yourself? From holidays to home improvements to things you wouldn’t normally buy yourself, set aside a portion of your earnings for treating yourself – you deserve it!
If you’re interested in earning some extra money, take a look at some lucrative side hustle ideas. There are different things you can do, from copywriting to selling on eBay, that could help you grow your income and reap the benefits. Who knows, your side hustle could end up turning into a full-time venture, allowing you to give up your full-time work and pursue a venture that’s right for you. Think you’re ready to give it a go? The sooner you start, the sooner you can start earning more money.
