Side hustling is a very common lifestyle among young people. It refers to a piece of work or job that you get paid for doing in addition to doing your main job. This will help you as a young person to have an extra income or even turn your passion into money. To ensure you succeed in your side hustle, you will need to have financial skills.
Here are some tips to manage your hustle’s finances.
Keep A Separate Account for Your Hustle’s Finances
Have you ever thought of keeping a separate bank account for your side hustles, separate from your personal finances? A separate account for your hustle business will help keep track of your cash flow. Keep clear records of all your expenses, which include:
- Raw materials
- Stationery, printing, and marketing costs
- Software, hardware, and other equipment
- Utility and phone bills.
- Travel Expenses
Be Aware of Your Spending Habits
A deeper look at your side hustle’s income and expenditure will help you manage your business’ finances. Take a good look at your expenses and determine if you are on the right track. If you are spending more than the income you are getting from your hustle, you might need to cut back on your expenses. Categorize your expenses into essential and non-essential expenses. Always ensure that the essential expenses are always covered before covering the non-essential financial obligations.
Ensure You Make On-Time Bill Payments
You may be tempted to hold off on paying certain bills in an attempt to save up on your finances. This can easily lead you into trouble. You are likely to get charged late fees or interest for some accrued expenses. Whenever possible, make those payments as regularly and promptly as you can. If you are facing serious financial hardships, contact your creditors to make alternative arrangements.
When you start your hustle, it is important to identify your “Why”. The reason behind your hustle. Once this is established, it becomes easier to set specific SMART goals. That is to say, your goals ought to be Specific, Measurable, Attainable, Realistic, and Time-Bound. Time-bound goals mean you have a specific time frame in which you wish to attain a certain goal, and this calls for proper management. Understand what time you are available for your hustle, how much time you intend to spend on it daily, and how much time you need to realize short and long-term goals.
Define Your Core Values
What are the qualities and principles you strive to embody in your hustle? Your core values may not be similar to those with a similar side hustle, they are unique to your hustle. It is of paramount importance, therefore, that you define the core values of your side hustle. This will communicate to others what you really stand for as a business. If you stand for no credit advancement, for example, communicate this to your customers. Doing so saves you the struggle that comes of chasing after debtors demanding your money. It saves you the non-monetary cost of debt.
Address Bad Money Habits
Your income from your side hustle might not be much now, but spending every single penny may be considered a bad money habit. There are many bad money habits that you have to do away with to ensure that your side hustle not only grows, but also succeeds. These habits include impulse buying, not budgeting, and heavily relying on credit cards. Such habits can actually bring your side hustle to its knees.
Set Your Goals
The first step towards setting realistic goals is looking at past successes and failures in your business. What do you learn from each of these? Once this is determined, set goals on ways to increase your successes and minimize your failures in your hustle. Your set goals should be specific and achievable. Watch your hustle grow with well-thought-out and executed goals.
Use the Best Financial Products for Your Side Hustle
Making use of financial products such as bookkeeping software not only makes your work easier, but also ensures accurate records in your business. Accounting software such as QuickBooks enables you to keep track of your finances in the easiest way possible.
Plan Your Financial Future
Investing today’s earnings for your future self should start immediately after you start to make an income from your hustle. You may not see yourself retiring soon, but a tidy sum in the later years will help offset bills and give you a comfortable life. A high-yielding savings account is a great place to park some cash for the short term, but you will eventually need to consider some long-term investments as well.
Set Up an Emergency Fund
An emergency fund will help you settle any developing financial obligation you might have in your side hustle. This will cater to instances where the only alternative left is taking out a loan on interest. An interest-free source of an emergency fund saves you money and the hustle that comes along with it.