What You're Missing Out on if You Have One Job
The days are long gone that you get everything you want in life from working at one company. Not only might your needs and wants change but benefits aren’t like what they used to be, oh man I sound old. Pensions are rare and the days of a household having one working parent and one stay at home parent without financial stress are gone.
There are so many benefits to making a little bit of extra money outside of your day job, let’s dive into just seven of the reasons and then we’ll explore how you can make more money!
Protection for you and your family
If 2020 taught us anything, it’s that our jobs are not guaranteed. Losing your job can be out of your control and it can also be out of your company’s control. It doesn’t matter how great an employee you are. So let's protect ourselves and our families. If your hours are reduced at work or you don’t get that annual bonus, don’t let your lifestyle or your goals suffer.
Limitless income
When you start working for yourself, your income is tied to you, not the limits to your job title at work. If you are selling custom earrings for example, you can make more money as you make more products, share them online or attend artisan fairs. When you take the reins and start acting, not reacting, your options are endless. I don’t say that to sound cliché, I say that because it’s true.
Making money while you sleep
Selling without having to physically be in a specific space is magical. This is how you see so many people making money while on vacation or waking up to “you have a new sale” email. When you can streamline your side hustle to be online and available to consumers 24/7, your income ceiling is limitless. Go create a website or post your products on social media and start selling while you sleep.
Exploring a hobby
Have you ever wanted to start something but was afraid for some reason? Turning a potential hobby into a side hustle is a great way to test the waters. I didn’t start flipping furniture because it was a dream I had. I started because I loved buying vintage pieces but quickly had too much furniture for our tiny house (I was also spending more money than I wanted to). So I started selling furniture that I didn’t mind parting with as I bought new pieces. I sold my coffee table when I found one I liked better and I did the same with my dining room table. I quickly learned that I could make money at the same time that I was updating my house. Start small and start with an area you are already interested in, you don’t have to go all in right away.
Reaching your goals faster
When you have a side hustle and you are intentional with that extra income, you are able to reach your goals rather quickly. It doesn’t matter if you are trying to pay off debt, build an emergency fund, go on that family vacation or stop the paycheck to paycheck cycle. This was a big motivator when I was paying off my student loans. Since I was working extra I was able to still go out to eat and go on vacation because my extra income was all going towards debt.
Flexibility to work when you want
A huge perk of being an entrepreneur is that you get to work when you want. You get to decide if you are maxed out at your day job and need a break or have some free-time and want to dive in. Don’t create unnecessary stress by over committing yourself. Complete tasks you need to get done for your side hustle when you are up for it, and stop when you are over it. If you find that you are never really in the mood, choose a new side hustle, that might not be the one for you.
Potential to go full time
When I started Money Gal Coaching, I wanted to show people how I got out of debt and how anyone could do it. I never imagined this would be a career change for me. But since I started with a passion that I did in my spare time, I was able to find something that I loved that I can turn into a long-term full-time passion. When you can turn your hobby full-time, work becomes fun and less of a chore because you do what you love and you get to create the rules.
Ok so you have decided to go after your hobby or increase your income, but what should you be doing? There are so many options, here are just a few but take some time to think about what you love doing and how you can make money at it.
Turning Junk Around the House Into Cash!
If spending this much time at home has taught us anything, it’s that we have a lot of crap!
Seriously, how many knickknacks, items in a drawer, old electronics in a closet or old clothes does someone need?
I personally think that if Marie Kondo’s sparking joy movement would have landed on Netflix shortly after the ever-so-amazing Tiger King, we would be in a much better place physically and emotionally with our homes.
I don’t keep a list of random odds and ends that I sell, I honestly don’t need to rehash the amount of stuff that I owned at one point. But, by perusing my history on Facebook Marketplace (much better for household items than Craigslist these days) I have recently sold:
An old painting for a neighbor - $40
An extra trash can - $20
A leaf blower - $200
An extra charging hub - $15
An old cable modem - $30
An electronics docking station - $25
A Vikings jersey that I won at bar pre-covid - $75
Our dining room table, I found a cheap one that I liked better - $700
Our coffee table, also found a better one for free that I refinished - $80
That's $1,185 in my pocket that I never would've had otherwise, and I had to do was take a picture and describe the item on Facebook Marketplace.
You get the point. If you find yourself staring at something every day and it doesn’t make you happy or proud that you own that item, get rid of it! There is no rule that you have to keep it.
And if it can bring in some cash, then why not?
Why and How You Should Be Saving With Sinking Funds
A sinking fund is when you set small amounts of money aside each month towards the purchase of a larger item. Wouldn't it be easier to save $100 a month for Christmas and have $1200 by December rather than putting Christmas on a credit card and stressing about it in January? YUP! Or how about that 6-month insurance premium? It's much less scary setting aside money each month rather than sacrificing all your fun money the month it's due.
Sinking funds can be used for anything that is not a monthly expense and becomes a line item in your monthly budget. So for example, in your budget, you will have a line item for your rent/mortgage, groceries and Christmas sinking fund (along with a bunch of other stuff). And each month you are setting money for the Christmas sinking fund aside but you aren't actually spending money in that fund until it get's closer to December.
How do you organize money from all these sinking funds? You can transfer the money into a separate account or keep it in a labeled cash envelope. There are also a few apps that help you organize money into separate categories to make your account balance more clear - Qapital and YNAB are a couple that I recommend. Use whatever makes the most sense for you!
How to Calculate How Much Money Should Be in Your Emergency Fund
Any good emergency fund consists of expenses that continue on during an emergency. While there are a few different scenarios in determining when we can tap into this savings, there is only one way to calculate it and it is pretty simple.
1. Housing - rent or mortgage, it also includes electricity, trash, water and those sort of bills. Netflix is not here, and if times are tough, neither is WiFi.
2. Food - groceries. Don't put your restaurant spending money or brewery adventures in your emergency fund calculations. This is how much money you need to put food on the table for your family. And if members of the house are still working, this includes packing a lunch (no going out to eat at work either).
3. Transportation - let's be realistic, even in a crisis you will need gas to go buy your groceries or to pick up kids from school. Maybe you take the bus, include your bus passes here instead. You aren't accounting for saving for a car in this fund or a repair that you want to get done in the future.
A proper emergency fund consists of 6 months of savings for the above items. Add up expenses for each month, times it by six and there you go! This money should live in a savings account that you have quick and easy access to. You are not trying to gain interest on this money, you are getting prepared for an unfortunate time in your life.
What to Do With Your COVID Stimulus Check
So, this stimulus check. What about it?
First off, check out this link to see the details on how much you may be receiving. Amounts vary but are up to $1,200 for individuals and $2,400 for those filing jointly (with $500 per child also in the mix). If you are behind on child support you won't be seeing a check. You will receive this money via direct deposit or a check in the mail, depending on your last filing method.
What should you be doing with this money? I can tell most of you that the answer here won't be to spend it. There are a few easy scenarios to cover but if you think your situation is a little more unique you can always reach out.
If your job is stable, you are not worried about lay-offs or reduced hours, this money should go towards any debt you may have. Let's say you don't have debt, then it should go towards your savings. If you have a five month emergency fund you can always invest or, my personal favorite, make a donation to an organization that is doing some good right now.
If you are at all questioning your employment then it should go towards your necessities and any leftover funds should go straight to savings. What are necessities? Rent/mortgage, gas for your car, food and utilities. Netflix? Nope. It's only $8.99/mo - nope. Getting food to go because you can't stand to cook anymore? Nope. Birthday gifts for friends because you feel bad they are stuck at home? Nope. Nope. Nope. You lost all or some of your income, it's time to save every penny you can.
Be safe and be smart out there!