A side income refers to work you perform outside of your regular job. So, let’s say you work a 9 to 5 office job but you babysitting on the side, that’s a side income or also known as a side hustle. A Side hustle is a great way to not only add more money to your bank account but that money can be used to pay off debt, start a savings, or use it as your fun spending money!
Instead of focusing on penny pinching every cent you bring in with your regular job the side income will allow you to focus your energy on earning and saving more. Are you looking to pay off student loans, lower your debt or saving for an awesome vacation? A side hustle is for you! The best thing about a side hustle is you are able to try a large variety of things and see what works best for you and your everyday schedule. You don’t need to quit your job or make any crazy long term decisions to start your side hustle since they are generally pretty low-risk. Stick your toes in all your options until you find one that works for you financially.
Here are some tips to help you manage your side income:
- You will have to pay taxes on any side income money you make over $600. PLAN APPROPRIATELY. You don’t want to get stuck with a tax bill at the end of the year.
- Remember to spend less than you make. This is a major key if you want to use your side income wisely.
- Open a new bank account, whether it’s a savings account attached to your everyday account or a completely new one. Pro-tip, when they ask if you would like a bank card for the account say no.
- For your new income set up direct deposit and link it to the new account. This will help eliminate the spending temptations when pay day rolls around.
- Depending on how much your side hustle is bring in, distribute the money appropriately, if you have a mortgage payment, car payment or credit card payment use that money first to contribute to the monthly payment.
- Next, tackle that debt. Use as much money as you to pay down your debt.
- If you haven’t downloaded Digit yet I would get on that. The app is extremely user friendly, making it mindless to use. Not only that is it extremely helpful when trying to start a savings account.
- Use your side income to help you get ahead on payment, add another payment on your credit card or car payment. Not only will this help your credit, it will give you a little cushion if life decides to throw an unexpected expensive at you.
- Finally, use some of your side income for you. This money is to help relieve some financial stress. Use that money for something that you’ve really wanted, or treat yourself to dinner and drinks with friends. You’re working hard, you deserve it!
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