Side hustles are often touted as the saving grace of anyone’s financial situation. Personal finance experts, myself included, like to point out that a side hustle can bring in more money and help you reach financial goals sooner rather than later.
But side hustles also take up precious time and energy. Certain side hustles also come with start up costs, like starting a blog. How do you know if you have a smart side hustle- one that is worth the time, energy, and money it takes to get going?
We’ve got three questions you can ask yourself to answer that very question.
1- What is the financial return?
First things first- is this side hustle actually going to make me money? Many people want to turn their interests and passions into their money making side hustle, but you have to be sure that there is a return.
For example, if you love playing the guitar, you might consider teaching guitar lessons to kids. Before you start advertising, do research on the local rates for guitar lessons. Calculate how much you expect to spend on gas to get to the kids homes. Add in any start up costs, like advertising costs, music books for students, or additional equipment you might need. Now that you have these costs, you can set an hourly rate that will cover your costs and bring you profit within the first month of teaching. With this kind of research and set up, you can create a smart side hustle.
2-Does it being me any new skills?
A side hustle can be a great chance at learning a new skill. Maybe this is something you an bring to your day job and use it to leverage a raise, or maybe it opens up new career opportunities in new fields for you.
Consider what learning a new skill, like graphic design or carpentry, will do for your overall skill set. If you can choose a side hustle that will bring you more money at your day job, that’s a real win. If your side hustle can lead to a higher earning position or career, that’s another win!
3-Do I want to spend time doing it?
There are a lot of claims on our time. Between work, family, friends, and just finding time to re charge, there’s a lot competing for our attention. Pick a side hustle you want to spend time on because you enjoy it and it makes you money. Even a ‘good’ gig will feel bad if you don’t want to spend your time doing it.
Does it make sense for you to pick up a side hustle? Maybe! That’s only for you to say. Ask yourself these three questions and make the decision that is right for you. If you’re going to side hustle, make sure it’s a smart side hustle.