Did you know that millions of Americans have a side hustle today?
If you haven’t started your side hustle yet, what are you waiting for? Are you afraid of failure? Not sure if you’d make any money? Can’t decide on which side hustle to try?
If you are having trouble deciding, consider these statistics:
- 50% of workers enjoy their current full-time job;
- 76% of workers LOVE their side hustle!
- 1 out of every 6 side hustlers earns over $500 a month!
- 5.4% of side hustlers make over $1,000 a month!
Those are pretty impressive statistics and reason enough to give a side hustle a try! What do you have to lose?
Don’t know where to start? We’ve got you covered.
Side Hustle Basics: The Fundamentals
What is a Side Hustle?
A side hustle is basically just a side gig. It’s typically a supplemental job that offers you side money aside from your full-time job.
Why are Workers Taking on a Side Hustle?
Many side hustlers are taking on side jobs to make extra cash. Some are doing it to save up for a big purchase, like a house or boat. Others are doing so in an effort to replace their full-time job, which they don’t enjoy doing.
Benefits and Challenges of a Side Hustle
What are the Benefits of a Side Hustle?
The most obvious benefit of having a side hustle is the extra money. However, for some entrepreneurs, it’s not about the money. Instead, there are more intrinsic rewards that come with a side job.
Forbes explains that a side hustle can give you unpredictable, exciting opportunities that will come to you in unimaginable ways. You have the chance to meet people you would not have gotten to know otherwise.
When you decide to become your own boss, you will have control over your work/life balance. You will have the flexibility to create the lifestyle you want. Once you make your side hustle your full-time job, you are in control of when you want to work, where you want to do it, and who you want to work with.
Doing Something You Love
For many people, a side hustle is more than just making extra money. A side hustle is an opportunity to do something you love, to have faith in something more than a full-time 8-5 job, and to get the chance to make a real difference in the world.
There are many intrinsic rewards to having a side hustle. Whether you fail or succeed, taking on a new adventure can help you explore your true passion in life, while nurturing your creativity and helping you become a more robust problem solver. You will build your confidence as you learn something new.
Boost Your Resume and/or Benefit Your Full-Time Job
As you start a side hustle, you can learn valuable skills and abilities that will make you indispensable. The more relevant the skills are, the more you will become a hot commodity in the current job market. As you build up your resume with your new expertise, other companies may reach out to hire you.
Maintain Job Security
Having a side hustle means you can keep your day job with all its benefits. A side hustle gives you the chance to try out your idea and helps you ease into a second career without fully committing. With a side hustle, you have the chance to look for the right opportunity while creating a plan to switch to self-employment.
The Challenges of a Side Hustle and How to Conquer Them
Fear of Failure
I like what Thomas Edison said about failure; he said he did not fail 10,000 times; he succeeded in finding 10,000 ways it did not work. What a positive outlook!
It’s important to have faith in yourself. Do a side hustle that you love, but realize failure is inevitable, so be ready to bounce back and try again. The journey is the destination. It may just take time to come up with the right side hustle for you.
Like Edison, you may have thousands of bad ideas, but in there, there are probably 10 good ones, so you should just try and try again until you find the right fit. Remember, every writer starts with a blank page, and every freelancer begins without a portfolio or client base. So, give it time.
- Keep an open mind; there’s no such thing as the perfect “side hustle.”
- Give your all, because to stand apart from the competition you have to be the best you can be.
- You will face setbacks; learn from them.
- Even with the smallest side hustle (like a Fiverr gig), do your best.
- Do something! Give it a whirl. Try something new, and keep trying!
- View each mistake as a learning experience. Make the most of it.
- If you don’t succeed, move on to the next idea.
- Remember that there’s no such thing as failure – just things that went unexpected.
- Like Edison said, if you’ve found what doesn’t work, you are that much closer to success.
Check out this website for even more inspiration to conquer your fear of failure. Search the web or look at books from the library for more inspiration and positive mantras that can help you with this challenge.
Lack of Time and Energy
Having a side job takes additional time and money. You are already working a full-time job, usually at least 40 hours a week. This means you need to have the needed time and effort to invest in a side project.
Many people find they do not have sufficient time to devote to a side hustle. You can proactively have a side job and take control of your hours, but it takes a lot of self-discipline.
Unfortunately, with a side hustle, you may have too little downtime – time to sit back and relax. However, if you pick the right side hustle, you’ll be doing something you love!
If it’s something you enjoy doing, using your free time to invest in a side hustle won’t seem that bad. You won’t feel like you’re stretched too thin if you love what you are doing!
Solution: Calculate how much additional time you have to invest in a side hustle. Once you’ve determined how much time you can invest, you should give that amount of time a try by participating in a side hustle.
Try something small and easy like Just Answer, a question/answer website where you get paid to expertly answer questions (see more details below). Devote your calculated amount of time on it as an experiment.
Have you burned out already? You may have pushed yourself too hard, but at least you now know your limits. Use these parameters to measure how much time and effort you have available for a side hustle, so you can find the best one that matches your skillset.
Lack of the Right Skills
Are you stuck not knowing how to best grow your side hustle? Are you struggling with marketing? Are you missing the technical skills needed for your side hustle? Are you just not feeling ready to take on a new project?
Think about or research the skills needed for the side hustle you wish to pursue; then, do even further research to find the solutions to your problems.
Do you need to type faster? There are dozens of free typing classes online. If you didn’t learn how to type fast in school, it is worth learning. It can save you a lot of time!
Solution: Learn what you need to know about or hire a professional to help you out. Find ways to do things more efficiently, like learning keyboard shortcuts, which can save you a lot of time and energy. Other things you can learn include:
- How to type faster
- Different software programs used in your field
- Courses at an online place like Udemy
- Seek out and find a mentor in your field
Not Enough Start-Up Capital
If you are worried you don’t have enough money to start a side business, you may not realize the facts. Most side gigs don’t cost more than $100 to get started. Many you can start for free!
We’ll look at the many side jobs you can start in this article so you can use one of those ideas to get your feet wet. There will be plenty of examples of free start-ups you can get involved with, so don’t worry about the money.
Solution: Find a side hustle that doesn’t require any start-up cash. Pick one of the free ones listed in this article to get you started. After you have earned a little money from a free side hustle, you can use that money to invest in a higher paying money-making gig.
Not Having the Right Mindset
The autonomy of having a side hustle can be challenging; it takes a lot of self-discipline, but if you have the desire, you can do just about anything you set your mind to. The most important thing is to manage a positive and confident mindset, one that gives you the desire to keep working towards success. If you don’t have the right motivation, you won’t get anything accomplished, and your side hustle will fail.
You must also have a confident drive for improvement, the urge to get better at something that matters. After all, you should enjoy your side hustle, right? It seems that most people do love what they do on the side.
Technology and the world, in general, is changing every day; if you don’t keep up with it and make continuous, small changes to keep up with it, you won’t succeed.
Did you know that the remote workforce makes up about half of the entire workforce? That’s right; everyone is jumping on this gravy train, and if you don’t keep up with the times, you won’t succeed. You have to do better than the competition to make it in this world.
Solution: Instead of keeping the status quo, aim to do better. Strive for the best in life. The better you aim to be, the higher your chances of success will be.
Here are some general tips on how to have the right mindset:
- Support other side hustlers; be part of the community that’s out there for people like you. You can not only make a difference in the life of others, but you will also find inspiration that way.
- Don’t bury yourself in a hole while you work. It’s easy to have no contact with the outside world today; after all, so many people work from home, having side hustles. Make it a regular habit to have contact with others!
- Branch out. Find a supportive Facebook group and search for accountability. Find a seasoned mentor to keep you on the right track.
- Have fun! Since most people love their side hustle, this shouldn’t be hard to do. Enjoy what you are doing, and if it becomes mundane, then it’s time to make some alterations to your side gig.
- Do something that matters. Make a difference. You may find it more rewarding to do something for others than they do!
- Do something in service for a larger purpose. The most incredible intrinsic value is doing something for the greater good!
Lack of Motivation
Are you a perfectionist? Having trouble just getting started? This is a common problem amongst freelancers.
I like how Reed Holfner put it, “If you’re not embarrassed by the first version of your product, you shipped too late.”
What does that mean? Basically, he’s saying that you shouldn’t strive for perfection; instead, as you get started, you need to just send it out; don’t wait for perfection to happen, because if you are a perfectionist, that day will never come.
Solution: Don’t wait for something to picture-perfect, just do your best and get it out there. Let the world give you the feedback you need to adjust your product. Basically, you should handle a product like this:
As you work, to find the right motivation, keep your goals in mind. Why are you doing the side hustle? Find a deep, lasting satisfaction in your side hustle so that you WANT to work; make it an enjoyable experience.
You must have a passion for what you do to make a good amount of side cash! After all, if you don’t enjoy doing something, you will end up quitting it later on.
Make your own opportunities. Don’t sit around waiting for something to fall into your lap; instead, just pick a side hustle and give it a try without further stalling. In other words, believe in yourself and stop making excuses.
Starting a new side hustle can be scary and can lead to lots of frustration. It’s up to you to motivate yourself by looking at the pros in what you are doing. Find a side hustle that you absolutely love doing, and you will find success!
Top Tips to Earn More Money with Your Side Hustle
- Devote more time on your side hustle, your online business.
- Consider spending more of your spare time on your side income.
- Increase your price; get paid more for doing the same amount of work.
- Start a new side hustle to go along with your current one.
- Streamline your work process for your side hustle.
- Gain new clients; advertise your new business; create a blog.
Side Hustle Taxes: What You Should Know
How Will My Side Hustle be Taxed?
Typically, if you make over $400 from your side hustle, you will need to file an income tax return. Since you have to pay self-employment tax and income tax, it is recommended that you set aside approximately 30% of your paycheck for taxes.
Put this amount in a savings account that you don’t touch so that you have plenty of money to pay the IRS during tax season. It’s better to have additional money sitting in that account than to have an unexpected tax bill come up.
How Does Self-Employment Tax Work?
The self-employment tax is 15.3%. It covers what your employer normally would – your Social Security and Medicare.
The self-employment tax is divided as follows:
- Social Security – 12.4%
- Medicare – 2.9%
You can calculate your self-employment tax on Schedule SE: Self-Employment Tax form. Once you have the self-employment tax amount from that Schedule, you can carry it over to your IRS Form 1040 (in the “Other Taxes” section).
You are also allowed to deduct the employer portion (50%) of your self-employment tax on your IRS Form 1040.
How Do Taxes Work for Side Jobs?
Your clients might send you a 1099-MISC (Miscellaneous Income) or 1099-K (Payment Card and Third-Party Network Transactions like PayPal) if they paid you over a certain amount. However, not all clients are required to send 1099 forms, so you must keep good records.
You will need to report your business income and business expenses on Schedule C for your IRS Form 1040. Your Schedule C will help you determine the net amount you made from your side hustle, which you will carry over to IRS Form 1040.
On Schedule C, you will report the amounts you received on your 1099 forms, but you will also need to report any amount that did not come on a 1099 form. In other words, include everything.
For more information about how to report business income and business expenses on IRS Schedule C, check out this article. It explains all about the details of Schedule C, including the following:
- What makes up business income and business expenses?
- Details on whether or not you can claim the home office deduction
- Information on how to file the Schedule C
Note: If you have less than $5,000 in business expenses, you can use Schedule C-EZ, a simplified version of the Schedule C.
How Do I Report My Side Hustle Income to the IRS?
According to the IRS, if you think you will owe more than $1,000 in taxes when you file your tax return, you should be making quarterly estimated tax payments.
If you think you may need to pay more than $1,000 in taxes, IRS Form 1040-ES: Estimated Taxes for Individuals can help you estimate the amount to pay each quarter. If you overpay your quarterly estimated tax payments, the IRS will send you a refund when you file your taxes. It’s best to overpay rather than underpaid, as underpayments can lead to tax penalties.
Businesses who pay workers more than $600 per year are required to file a 1099-MISC form. You should receive this form from them by January 31. If you haven’t received it or are unsure as to the status of it, contact the client to find out what the status is. You may need to do the leg work.
How to Get Started with Your Side Hustle
Where to Find the Best Side Hustle Jobs
There are two ways you can have a side hustle; you can sell something or offer a service of some kind. When you sell something, you can either use something you own as a product or create a homemade item.
If you want to sell something you own or something you are reselling, you can use one of the following places:
- Facebook Marketplace
If you’d like to sell your item a little more quickly, consider these options:
- Consignment Shops (sell your gently used clothes and accessories)
- Garage / Yard / Estate Sale
- Pawn Shop (not highly recommended)
- Antique Shop
If you would like to resell items, consider buying and selling things such as antiques, electronics, collectibles, or clothing.
If you have homemade items, here are a few ways you can sell your creations:
- State Fair Grounds
- Gun / Hunting / Fishing Shows/Exhibitions
- Antique Shops
- Craft Stores / Shops
- Facebook Marketplace
Are you looking for a part-time job? Check out this article for guidance. All of these side hustle ideas can provide you with excellent work from home jobs.
Work from Home Tips: Managing Your Side Hustle
Top Tips for Working from Home
- Set up a productive home office. Put things in a convenient place, where you can reach what you need when you need it.
- Use remote working apps. Some of the best ones include: Slack, Zoom, Toggl, Trello, Google Drive, or Microsoft OneDrive. These are excellent ways to manage your home business, work with teams, and to communicate well with clients.
- Schedule plenty of breaks. It’s easy to work 17-hour days when you are doing something you love. Set a timer after 1-2 hours so that you remember to take regular 15-minute breaks!
- Set ground rules for your home office. If you are working from home and have a family around, set your work hours, and be clear as to what you can and cannot do while working.
- Seek out learning opportunities. There’s a myriad of ways that you can learn new things, such as online classes at Udemy. Continue to grow as a freelancer so you can improve yourself.
Step-by-Step Instructions on How to Start Your Home Business
Let’s go step by step on how to have a successful remote job, a work-from-home opportunity.
Step 1 – Set up your home office. Buy the furniture, office supplies, accessories, and electronics you need to start your home office.
Step 2 – Practice excellent record keeping. Keep all your receipts, utility bills, homeowner’s insurance, direct expense reports related to your home office, such as furniture and supplies.
If you decide to take the home office deduction on your taxes, you will need these records. If you drive for Uber or Lyft, you’ll want to keep an excellent mileage log. Check out this article for the best tips on how to maintain mileage logs.
Step 3 – Choose a side hustle to get started with. Research it thoroughly to make sure it is the best opportunity for you. Find out what you need to do to get started and get moving!
You should now have a massive resource with this article and have learned all about side hustles. We’ve covered the fundamentals of having a side hustle, the pros and cons of being your own boss, ways to make more money doing a side hustle, everything you need to know about taxes, tips for working for home, and more.
Whew! That’s a lot of information. Hopefully, you’ve found it helpful and can get out there and get to work!
If you have any questions about taxes or about running your own side hustle business, don’t hesitate to contact Indiana’s tax expert at Borshoff Consulting!