Picking up a “side hustle”–a part-time something to earn a little extra money outside of your day job–is becoming all the rage right now. Many people including influencers and self-help gurus talk about side-hustles as a way to make more money, while working even more.
Maybe you drive for Uber, run an Etsy shop, or offer up freelance writing or graphic design services in your spare time. Side hustles can add up big in the long run, meaning some serious cash in your disposable spending stash.
But is your side hustle really doing you any favors?
Let’s talk about how you might be able to use your money differently so you don’t need to spend the rest of your life working multiple jobs.
1. Pay Attention to Your Spending Habits
By definition, a side hustle is “extra”–and most people treat it like extra, disposable money, perfect for luxuries you couldn’t normally afford: a new iPhone, that watch you’ve been eyeballing, or even a car payment for a new car.
Those are all great, but if all your side hustle money is funneling straight toward those luxuries, it’s going to disappear like you have a proverbial hole in your pocket.
The new iPhone will become obsolete, the fancy watch will go out of style… you get the picture.
When you treat your side hustle as “extra,” all of the time and effort you invested in making those dollars will end up right out the window.
2. Change Your Thinking
So think of it like this…What if your side hustle wasn’t a side hustle as much as a tool to transform your financial future through investing? Because a side hustle can do just that.
Whether your side hustle is a passion that you hope to take full-time one day or just a way to earn a few extra dollars, you can leverage it to continue working for you in the long run by learning how to invest it. And that means looking at your side job as something weighty, worthwhile, and definitely not just “extra” for little luxuries.
By investing those dollars, whether you’re earning $50 or $500, you’ll set yourself up for an immensely rewarding financial future.
The best possible way to lose your money is to wait until it’s in your hand to make a plan for where it should go. Instead, sit down now and write down your priorities.
What are your personal values and your financial goals? What could you do to set yourself up for a future of financial freedom?
You might want to start contributing more to your retirement fund, diversify your investments, or even invest more directly into your side hustle to grow it into a sustainable full-time job.
No matter where you want to go with your career and finances, having a spending/saving blueprint is the place to start.
3. Pay Yourself First
Your financial goals come first out of every paycheck–side hustle or not. Allocate a percentage of every dollar you earn to go toward your goals, no matter what those goals look like for you. For the biggest possible long-term reward, you should be funneling most of your side hustle earnings toward your goals, and just keeping a little of it as mad money–a well-deserved pat on the back for a job well done.
The moral of the story?
Instead of looking at your side hustle cash as fun money, consistently invest a large chunk of it now and you could completely change your financial future.
If you aren’t sure where you stand on your investing journey or how much money you need to retire, you need my Investing Journey Success Planner. Use it to plan, save and invest at any age.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.