When it comes to budgeting, there’s only so far you can go. Your income needs to grow, and if your workplace isn’t offering a raise, you need to find another way to make money.
Side hustles are a great way to add income to your home. I offer dog walking and pet-sitting services on the side, and I know people who make T-shirts and bags or candles and bath bombs. People head to markets with the items they’ve made to sell them to add just a little extra money to their account.
However, before you spend that money, you need to figure out the best way to prioritize it.
We all hate paying taxes, but they are a necessity. Sure, there are plenty of people who get paid in cash so that they can hide their money, but if you take any money electronically, it’s easier for the government to catch you out. So, in that case, you need to declare your income.
With that, you’ll need to save for taxes. In Ontario, I save 30% of everything I make for taxes. Yes, our taxes are ridiculously high. You’ll want to see what your rate is for your state or province.
Now, what do you do with the rest of your money? Most of the time, your side hustle income is going to go toward debts and savings. The idea is to increase the amount you make so you can live more comfortably.
If you’re in debt, put all the money you make straight to that. You can use the snowball or the avalanche method with this extra money.
You’ll be amazed by how much micropayments can help each month. Once you’ve paid of the minimum for the month, your payments are going toward the principal, so you can then see that debt go down properly.
I know, it sounds boring, but you need to save. I do recommend that you have an emergency fund even if you’re in debt, so if you don’t have that, then you’ll want to work on that before you start clearing debt.
Now that you have your emergency fund and your debt cleared, you can work on other savings. You get to look ahead at a future where you can go on a vacation or where you can even just take a day trip somewhere you’ve always wanted to go.
There’s nothing wrong with treating yourself. I always focus on spending intentionally, but that’s a personal thing after years of spending on anything that I wanted and going into debt. Now that I’m out of debt, I don’t want to spend too frivolously.
But if you want to head out for dinner one night, or if you want to go to a movie with that side hustle income, go for it! Just make sure your budget is in check.
I always give my income a job to do. While my main income pays for my necessities, such as rent, utilities, and food, my side hustle will then have the job of savings and fun expenditures. If you want me to go through how I do that with my budget, then let me know!
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