Found a creative way to make some extra money on the side? Before you get too involved in your side hustle, make sure that you’re not falling trap by any of the following mistakes.
Investing too much money upfront
You should be careful of investing lots of money into your side hustle as it could take you a while to make this money back. People can earn a lot of money from side hustles – however, it’s generally not enough to warrant investing thousands of dollars. You certainly shouldn’t be taking out big loans to fund your side hustle. Only invest lots of money if you’re convinced that you’ll make a large enough revenue.
Failing to do any research
Just as you should do your research when launching a business, it’s important to do your research when starting a side hustle. Whether your side hustle involves selling t-shirts or monetizing a blog, there are likely to be tips that you can read online to help improve your revenue. It’s also important to research your audience so that you know who you’re targeting. Don’t dive blindly into your side hustle as you likely won’t be successful.
Not declaring tax from your side hustle
It’s important to pay tax on any earnings you make. This includes any earnings made from your side hustle. Start by registering with the IRS so that you can obtain your PTIN number and EFIN number – these are necessary when you go to file your tax return. Keep records of all your earnings throughout the year. Then work out how much tax you are due on these earnings. Don’t forget to keep aside some money to pay off these taxes.
Burning yourself out
You should be careful of pouring too much time and energy into your side hustle. You still need time to relax, as well as time to socialise with friends and family. If your full-time job already takes up a lot of your time and your side hustle also proves to be time-consuming, you could find that you end up sacrificing a lot of your free leisure time. This could become draining and you could eventually risk burning yourself out. Make sure that you’re still allocating some free time each day to relax and talk to loved ones.
Prioritizing the wrong income
You should be careful of prioritizing your side hustle over your main job – particularly if your side hustle is only making you a small amount of money compared to your main job. While your side hustle may be more fun, you don’t want to end up neglecting your main job to the point that you get fired or demoted. The only time you should start focusing more on your side hustle is if it’s starting to seriously grow – at which point you may be able to quit your main job and focus on turning your side hustle into a main source of income.