5 Ways to Save Money for Your Side Hustle
Most people start side hustles because they want to be business owners and make some extra money — maybe even enough to eventually stop working their day job. But if they’re not careful, their side hustle could actually end up costing them money.
U.S. News & World Report found that some people lose money on their side ventures. Their money was sunk in certifications, workspace rentals, maintenance fees, and self-employment taxes. Add in potential lost productivity from physical exhaustion or distractions, and you may be losing money at your day job, too, in terms of raises, bonuses, or promotions.
That means it’s important to save money before and during the launch of your side hustle. Having a cushion makes it possible to plan ahead, make smart decisions regarding your business, and expand when you’re ready. It also guarantees you’ll take action based on what’s best for your business, not what’s best for your wallet in the moment.
Here are a few ways to help your side hustle be profitable without draining your funds.
- Sign up for automatic savings. A lot of people open checking accounts and savings accounts simultaneously, with the goal of eventually moving money from checking into savings to create a safety net. With 57 percent of Americans having less than $ 1,000 in their savings accounts, it’s clear that doesn’t happen often in reality.
To overcome your best intentions you never fulfill, open an account that has automatic savings set up. Chime has an Automatic Savings program that ensures users automatically transfer 10 percent of their paycheck to savings and have rounded-up amounts added to their savings every time they use their Chime card. In turn, you’ll be saving without doing anything additional, and the best savings are the ones you never see — because you’ve never tempted to tap them.
- Presell your goods and services with advance payment. Harvard Business Review reported that presales can actually boost long-term sales, so this is a great investment in your business’s end game. Best of all, presales ensure there’s a market for your product or service, meaning you won’t be wasting money by investing more in your side hustle.
Presell what you’re working on, whether that’s a webinar, a line of T-shirts, or a translation service. One great way to do this is by offering some sort of sample, from an online portfolio of your work to a case study of another project you worked on. Ask people to not just sign up but commit to your offering by paying upfront. This allows you to anticipate and cover expenses — say, materials or the web designer who’s building your webinar landing page — before using any of your own money.
- Trade services. If you’re just starting your side hustle, you’re likely reliant upon others to help you get started, whether that’s a screenprinting press you rent time at or a photographer friend who helps you capture images for your website. While some people will simply help you out of the goodness of their heart or their excitement to see you succeed, some won’t — and it’s also not a great idea to be indebted to lots of people from the outset.
Instead, work with vendors, distributors, or service providers to establish a trade relationship. If your service translates work into Spanish and your website builder is actually needing translation services for a few clients’ websites, you have a setting ripe for exchange. If your T-shirt business works with a screenprinter whose passion project is a summer camp, offer to design shirts for special camp events in exchange for screenprinting time. These are all ways to staunch the outflow of cash while setting your side hustle up for success.
- Use your blog to profit. In this day and age, you need a blog to propel your business to success — even if you don’t have a big following, sharing your knowledge and experiences with visitors to your site can build your credibility and push them to work with you. But you don’t have to see your blog as a drag on delivering your products or services — it can be its own source of income, too.
By working with affiliate marketers, hosting ads on your blog, and writing sponsored posts or reviews, your blog can bring in money, too. And these can be helpful to visitors — say, a post about a brand of running shoes you highly recommend pairing with your running app — which helps make you “sticky” in clients’ minds. You can use additional income from sponsored posts or affiliate links to fuel your side hustle, making it a money saver rather than a distraction.
- Claim all your small business expenses. While there are some sticky tax details regarding side hustles — like estimated quarterly taxes — there also some benefits, like claiming expenses for your business. A lot of entrepreneurs miss the deductions hidden within the 74,000 pages of tax code, so educate yourself on what you can claim.
If you use your home office, for example, you can claim not just the space, but also the utilities associated with it, such as internet. You can write off equipment you’ve purchased for your side hustle, from computers to cake decorating utensils; you can also write off expenses for travel, including airfare, mileage, or lodging. But you have to track it all in order to claim it. 1tap is a platform that helps entrepreneurs track receipts so they can claim every deduction owed come tax season; it even uses character recognition to eliminate data entry, saving hustlers both time and money.
Side hustles are intended to make money, not bleed you dry. To avoid putting in more than you’re getting out, take advantage of these methods for saving your side hustle money so it can make a profit. If you can avoid worrying about money, you’ll be able to focus on building a strong business — and you may even find yourself no longer needing your day job.