![\"woman](\"https:\/\/jasdeepsingh.net\/wp-content\/uploads\/2022\/05\/christina-wocintechchat-com-UIqpEPaiHQM-unsplash-scaled.jpg\" "\\"Christina")
<\/h1>\n<\/h1>\nSide-hustles are an increasingly popular way to increase income and cash flow. There are countless articles about why and how to start one but few on what should you do with this extra income.<\/p>\n
The goal of this article is to open the conversation about how to manage an unstable source of income and what you can finance with a side-hustle.<\/p>\n
Dissatisfaction with your base salary is a common issue in the U.S. Working two conventional jobs tends to bring a few drawbacks:<\/p>\n
A side-hustle typically refers to an activity that you do in your own time, capitalize on talents, and where you are the boss. Many Americans prefer having a side-hustle to the strain of an additional job because it provides a sense of direction and<\/em> additional income.<\/p>\n A sense of purpose is important if you want to move forward in any career path, whether that’s your main job or an extra source of income. Self-directed extra work is generally preferable to working two roles and having no control over your fate in either.<\/p>\n Many people use side-hustles simply to help them cope with their day-to-day expenses. This could mean childcare, health insurance, the cost of living \u2013 not much comes cheap<\/a> these days. However, the ideal use for a side-hustle is to generate a source of income that you can use to plan for your future.<\/p>\n For this reason, it is a good idea to treat income from your extra gig as a ringfenced \u201cfund.\u201d You can use this money to make more money or invest in something that will improve your long-term prospects. From higher education to Forex trading, people find creative uses for their additional earnings.<\/p>\n A danger of using a side-hustle to cover your everyday costs is that many times this additional income isn’t guaranteed. If you work as a freelancer, you’re dependent on newly available jobs. If you work in the gig economy, you’re relying on a business having enough hours to give you \u2013 when it doesn’t have any obligation to give you work. It’s a precarious position to be in.<\/p>\n We don’t all have the luxury of choice. Ideally, you want your main source of income to cover your day-to-day costs, even if that means cutting back in a few areas. You can then treat your additional income as an investment opportunity, and it matters less if work slows down from time to time.<\/p>\n A best practice is to treat any \u201cextra\u201d income to build an emergency fund if the bills are too steep for one month, but also as a guarded savings pot. This means you’re constantly building towards a better future but not sacrificing important short-term issues for long-term goals.<\/p>\n So what are the best finance uses for side-hustle income? Below are a few ideas to guide you towards achievable, useful finance goals.<\/p>\n Opening a savings account in an internet-only bank (see this Investopedia article<\/a> for more information). Almost 40% of Americans cannot cover a $400 emergency expense with cash or savings, so building up a nest egg is crucial. The interest rates are low, though rising, but it is liquid and easy to access. Plan for two-months of expenses to cover emergencies or a period with less work.<\/p>\n Simply seeing your income in separate groups can also help you keep your long-term goals in mind. You could be saving for your kid’s college or your first mortgage, and a ringfence of those savings can help you remember these important objectives.<\/p>\n A higher-risk but more lucrative use of your side-hustle earnings is to turn to investing. This does not mean picking stocks or crypto! These are not investments; they are gambles.<\/p>\n Utilize a free platform, such as TDAmeritrade, Acorn, or Robinhood and choose index funds. Index funds are mutual funds that are built to match the overall layout of the S&P 500. In \u00a0essence, they are a grouping of stocks that should mirror the market\u2019s return. Yes we are in a time of inflation and slowing returns, but the market traditionally returns greater than 6%, even after inflation<\/a>, so after 20 years you can have a much larger nest egg.<\/p>\n You can also go for long-term, safer bets. Hiring a financial advisor may cost you in the short run but pay off in the long run.<\/p>\n If your main business requires regular payments, e.g., if you own a restaurant and need to pay rent, a side-hustle can keep your business liquid until it’s paying for itself. Generating cash flow is a great idea for side-hustles if you’re in the early stages of starting a business.<\/p>\n Changing jobs often means paying for further education. You can finance this with a side-hustle. If you’re considering going back into education, you should wait until your additional earnings cover most of the cost of your educational program\u00a0 rather than planning to work through your education.\u00a0 Working the main job, a side-hustle, and studying all at once is exhausting.<\/p>\n You might discover that you prefer your side job to your regular job. If you realize this, consider reinvesting your earnings into going full-time with your side-hustle. It’s a good idea to reassess your options routinely.<\/p>\n Savings accounts are perhaps the safest place to store additional income while you figure out what to do with them. The best savings account for side-hustle earnings should have the following features:<\/p>\n Side-hustles should be seen as an investment in your future. Whatever you’re planning to do, keep that money safe and make it go further for you! Set goals, save carefully, and get ready to achieve great things.<\/p>\n","protected":false},"excerpt":{"rendered":" Finances for Your Side-Hustle Side-hustles are an increasingly popular way to increase income and cash flow. There are countless articles about why and how to start one but few on what should you do with this extra income. The goal of this article is to open the conversation about how to manage an unstable source […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[3,13],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/posts\/672"}],"collection":[{"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/comments?post=672"}],"version-history":[{"count":1,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/posts\/672\/revisions"}],"predecessor-version":[{"id":675,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/posts\/672\/revisions\/675"}],"wp:attachment":[{"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/media?parent=672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/categories?post=672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasdeepsingh.net\/wp-json\/wp\/v2\/tags?post=672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What Do You Use a Side-Hustle For?<\/h2>\n
Risks of Relying on Side-Hustle Income<\/h2>\n
Best Finance Uses for Side-Hustles<\/h2>\n
Savings<\/h3>\n
Investing<\/h3>\n
Cash Flow<\/h3>\n
Education Opportunities<\/h3>\n
Keeping Your Options Open<\/h3>\n
Best Savings Accounts for Side-Hustles<\/h2>\n
\n
Final Thoughts<\/h2>\n