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If you’ve spent any amount of time reading personal finance blogs or financial independence blogs, I’m sure you’ve seen plenty of articles about side hustles. When the topic of making more money comes up, starting a side hustle is a common suggestion.
While it’s true that a side hustle can be a great way to increase your income, everyone’s situation is different. In order to determine if a side hustle is right for you, you should be considering several different factors.
In this article, we’ll take a look at those things that you should consider before starting a side hustle, and also some factors that can help you to determine which side hustle might be right for you.
If you want some quick side hustle suggestions based on your own personal situation, try our side hustle quiz. It will ask you a few simple questions and make some suggestions based on your responses.
My Experience with Side Hustles
Before getting too far into this article, I want to explain my own experience with side hustles to provide you with some context. Here’s a quick summary of the significant side hustles that I’ve had in the past.
- Web Design Blog – In 2007, I started a web design blog as a side hustle while working full-time as an auditor. After 1.5 years of consistent work, I was able to leave my job and pursue my blog full-time.
- Photography Blog – In 2012, while working on my web design blog full-time, I started a photography blog as a side project. In 2013, I sold the web design blog and the photography blog became my primary focus (I’ve since sold the photography blog as well).
- Selling on Amazon – In 2015, my wife and I started a side hustle selling private-label products on Amazon. It took off faster than we expected, making more than $100,000 in profit during our first year. In 2017, we decided that we didn’t want to run this business long-term, so we sold it.
Side hustles have had a huge impact on my own career and my finances. I’ve been self-employed as a full-time blogger for more than 12 years now, a business that originally started as a simple side hustle.
Despite the fact that side hustling has been a very positive experience for me, I want to take a balanced approach to this article and look at the big picture.
What Other Ways Could You Use Your Extra Time?
In order to determine if a side hustle is worth your time, you need to consider the alternative uses for that time that you would be dedicating to a side hustle. Just because you can make money with a side hustle does not mean it is the best use of your time.
Work Overtime at Your Job
Do you have a job that allows you to work overtime, and of course, to be compensated for that overtime? If so, you may be better off from a financial perspective by simply dedicating your extra time to your job instead of to a side hustle.
Enhance Your Education or Training
Maybe you can’t get paid to work overtime, but you can use your time to earn a degree, a certification, or complete some sort of training that will make you more valuable in your career. This may lead to a raise or a promotion, or open up more possibilities for you to look for a higher-paying job with a different employer.
In these situations, you won’t be making money right away. You’ll be putting in the effort now with hopes of being compensated for it in the future. That’s fine if you don’t need the money now, but if you’re in a situation where you need to start making extra money right away, this might not be a good fit.
Before I started my side hustle with a web design blog back in 2007, I spent about a year studying for tests to become a Certified Internal Auditor. I did pass the tests and it helped me to get a small raise at my job. My plan was to look for a higher-paying job somewhere else, but during the process of completing the certification, I realized it wasn’t something I really enjoyed and that’s when I wound up launching the blog.
Spend More Time with Friends or Family
Instead of working more, another option would be to have more time with your friends and family. While this isn’t going to increase your income, there is a lot more to life than just money.
Pursue a Hobby
You could also use your spare time to pick up a hobby, or dedicate more time to an existing hobby. There are also many different hobbies that make money and you may be able to combine your hobby and side hustle to make extra money by doing something that you enjoy.
I started my photography blog because of a growing interest in photography. I was far from an expert, but I knew it would be a lot of fun to work on a photography blog and earn money while I was learning and pursuing a hobby.
The last option is to do nothing of value with your extra time. If this is your alternative to a side hustle, then your side hustle is most likely worth the time since you’re not giving up anything for it.
The Benefits of a Side Hustle
Of course, the primary benefit of a side hustle is extra money, but there are other potential benefits aside from that. Here are a few that you might want to consider.
1. Diversification of Income
Not only can a side hustle help you to make more money, but it can also add some diversification by adding another stream of income. Having two sources of income can add some stability and reduce the risk involved with losing your job or your main source of income. Should something happen to your primary income, at least you’ll be able to make something from your side hustle.
In the event of an unexpected job loss, there is also a possibility that your side hustle could be scaled up to completely replace your income. Of course, not all side hustles are capable of being scaled up to a full-time income, but that can be an option with some.
2. Development of New Skills
One of the best things about a side hustle, in my opinion, is the opportunity to develop new skills. This could be a skill that would be useful to you in your existing career, or it could be something totally new and unrelated.
Of course, not all side hustles are going to help you develop your skills (or at least not the skills that you care about). If this is an important benefit for you, be sure that you’re taking it into consideration when you’re choosing a side hustle to pursue.
3. Variety in Your Work
A side hustle can also allow you to get a lot of diversification in your work. Maybe you do have the option to work overtime at your job, but you can’t bear the thought of spending more time doing the same thing. Getting some variety and doing something different can be a great option.
When I started my first blog, I worked 40 hours per week as an auditor and I would dedicate about 30 hours per week (evenings and weekends) to my blog. I certainly could have dedicated fewer hours to my blog, but I wanted to grow it as quickly as possible. Working about 70 hours per week was possible for me because of the variety, but there’s no way I would have been able to work 70 hours per week in my auditing job without losing my sanity.
What is Your Goal for the Side Hustle?
In order to determine the best use of your time, you need to consider the context in your own life. Specifically, what is it that you’re hoping to get out of your side hustle? While there are a lot of different possibilities, here are a few common goals.
Make a Little Extra Money
Maybe you’re just looking for a small amount of extra money that you can spend however you want. For example, you might have a goal of making $200 per month that you can use for entertainment. If this is the case, you’ll have a lot of options for your side hustle.
Fill Gaps in the Budget
I talk to a lot of people who use a side hustle to make up for a shortcoming or fill in the gaps in their budget. For example, you might need to make $1,000 per month from a side hustle in order to leave your job and become a stay-at-home mom or dad.
In these situations, you don’t usually need full-time money, but you might need a side income that’s reliable since it’s needed to pay for living expenses.
Possible Career Transition
Some people start a side hustle with hopes that it will turn into something full-time and allow them to leave their current job. This is what happened to me, and I can say from firsthand experience that it’s possible.
Using a side hustle for a career transition could mean leveraging your side hustle to land a new job, or it could involve starting your own business and growing it from a part-time to full-time income.
Maybe the primary goal for your side hustle is simply to have some fun. Making money might be a secondary goal.
Make Sure Your Side Hustle is a Good Fit for Your Goals!
Before you can decide if a side hustle would be a good use of your time, or choose the right side hustle for yourself, you need to understand what your goals would be.
There are a lot of side hustle options out there, but a specific option may be a good or bad fit for you depending on your own situation and your goals.
If your goal is to grow your side hustle into a full-time income in order to leave your current job, you need to be sure that you’re choosing a side hustle that gives you the realistic potential to earn a full-time income.
Flexible side hustles like taking paid online surveys, donating plasma, or charging electric scooters may be a good fit if your goal is to make an extra $200 per month, but they would not be a good use of your time if your goal is to scale up to a full-time income.
One of the reasons why I love blogging as a side hustle is because it offers unlimited earning potential and could be a good fit for any of the goals listed above.
How Much are You Making with Your Side Hustle?
In order to determine if a side hustle is worth your time, of course, you’ll need to consider how much you’re making per hour of work. Some side hustles might allow you to earn minimum wage and others might allow you to earn $100 per hour.
But another factor that you might need to consider here is flexibility. Some of the lower-paying side hustles offer a great deal of flexibility, and you may need that flexibility in order to make it work with your schedule and around your life.
Are You Building a Business?
Although you want to consider how much money you’re making, that can also be deceptive in some cases. If you’ve chosen a side hustle that involves building a business, you might not be making much money now, but the payoff could come later.
When I started my first blog in 2007, I made an average of about $500 – $1,000 per month from the blog during the first year, and I was working 30 hours per week on it.
Let’s say I made $1,000 per month and I was working 120 hours per month. That comes out to only $8.33 per hour. If that was the full story, I’d say $8.33 per hour was not worth my time and there were better things that I could be doing instead.
But after the first year, my income increased significantly and quickly. Another year later, it was more like $30/hour, and it kept increasing from there.
If you’re in a situation where you can afford to have some patience for your side hustle income to grow, and you’re interested in eventually turning it into a full-time career, starting a business is the best option with the highest ceiling.
Are You Building New Skills?
Sometimes you might not be making a lot of money with a side hustle, but you could be developing skills that will allow you to make more in the future. If you’re looking to use your side hustle to help you land a new job, this could be more important than how much money you’re making.
The Financial Impact of a Side Hustle
So far, we’ve looked at details like how much money you’re making per hour or per month, but let’s also take a look at the bigger picture and the long-term impact.
For these calculations, I’m using the compound interest calculator at Financial Toolbelt. If you had a side hustle that earned $500 per month (after expenses and after taxes) and you invested that money and earned a 5% return, you’ll have an extra $34,811 after 5 years. After 10 years it would be $79,240. And after 20 years it would be $208,315.
As you can see, the numbers can grow into something pretty impressive that has a real impact on your finances.
What Side Hustles are Worth Your Time?
In order to determine if a side hustle is worth your time you’ll need to consider:
- How much money you can make with the side hustle
- Your future income potential with the side hustle
- How much you could make doing something else (like working overtime or furthering your education)
- Other benefits that you may get (like getting more variety or incorporating a hobby into your work)
While everyone’s situation is different, here is a look at some specific side hustles that I recommend in certain situations.
If you’re looking to start a business that can grow into a full-time income, consider:
If you’re looking to make $500 – $2,000 per month, consider:
- Any of the options listed above
- Dog walker or pet sitter through Rover
- Delivery driver for DoorDash
- Start a niche website
And if you’re looking to make a smaller amount, like $100 – $500 per month, and you need a flexible side hustle that will fit around your schedule, consider: