Should I Start A Side Hustle?
With high interest rates, and even higher inflation comes cost of living pressures. For some it’s becoming harder to cut costs sufficiently to make your money go further. As people continue to feel the pinch, we seem to be talking to more people who are looking for new ways to boost their income. One such way is to start a side hustle.
For those who have never heard of a side hustle, this is essentially a side job, gig or second job that you do away from your main day job to give you extra income. Whether that be turning a hobby into cash, delivering pizza or as a social media “influencer”.
Back in the day doing a second job was seen as a desperate measure. Nowadays though, in my opinion its actually being glamorised and portrayed as an aspirational lifestyle choice. I suspect this will depend upon what the side hustle is but a brief search of the internet reveals a long list of possible options for the next big side hustle. So is it all it’s cracked up to be? And is it as big a money spinner as the internet will have me believe?
Showing my age
Side hustle’s are not a particularly new concept and at risk of showing my age, I recall my mum’s friend organising Tupperware parties in the 80’s when her actual day job was something completely different. I can imagine the look of horror on any millennials face as they read this and picture the idea of a plastic box party but trust me in the 80’s it was a thing. The parties certainly didn’t make her a millionaire but she will have earned a few more pennies.
Thankfully side hustles have progressed a little bit since then and we have seen more and more clients talking about turning their hobbies into cash. Examples include the solicitor who makes handmade cards in her spare time, the PA who repairs expensive handbags and a clients daughter who makes beautiful Disney embroidered badges. The increased popularity of websites like Etsy has certainly made it easier to sell goods and gone are the days of being solely reliant on craft fairs.
For some a side hustle will be a way of bringing in a bit of extra cash, and for others it will be a way to change your focus and begin to build a business whilst maintaining stability of your existing employment.
Like with any idea there will be pros and cons.
Financial Security
Producing additional income whether it’s a lot or a little will help improve financial stability, whether you’re doing it to build a holiday fund, repay debts quicker or to simply help with the increased cost of living.
Do something you love
We consider ourselves very lucky because we love what we do but not everybody is in the same position. The benefit of a side hustle is that you can pick something you enjoy doing without worrying about losing your primary income source. It also provides an opportunity to test the water and see if you can build your hustle to a sustainable level. The worst case scenario is you spend time doing something you love and potentially earn a little money from it.
Use your free time more productively
I saw a social media advert the other day for a personal trainer who suggested we work 8 hours a day, sleep approximately 8 hours a day which leaves 8 hours a day for other “stuff”. This resonated with me as he was suggesting there is no excuse for not exercising, you do have the time! My light bulb moment was that even if you knock three hours off for the gym/exercise and eating, that’s still 5 hours a day where I could be a lot more productive. Add in some time at the weekend and hey presto that’s 35 hours a week that is actually free. It’s the equivalent of a whole working week in spare time.
I am not suggesting that you don’t need to rest, read a book or chill out but the PT was absolutely right… I have no idea where those 35 hours go. Surely if I put my mind to it and use that time on a new project, I have the potential to make it fruitful. Better still I could become the dog walker I keep threatening to become!
Flexibility and Freedom
For those who work a traditional 9-5 rigid structure, the freedom and flexibility of working for yourself can be a refreshing change. As it’s your hustle, you are in control, you can flex the time you spend on it dependent upon other life/work commitments.
If you are seriously considering a side hustle then pick something that works with your schedule so that it doesn’t impact your main income source.
Psychological Benefits
Caroline would no doubt tell you I don’t have an off switch and I am known for working a bit too much. If like me you are plagued with “workaholic” syndrome then a side hustle could well give you some balance.
A side hustle that you love and enjoy doing, gives you the opportunity to step away from your day job, clear your mind and help you feel productive.
It’s not always a bed of roses
As with any new business venture building a successful side hustle can take time, money and energy with no guarantee of success. Before jumping in feet first it’s worth thinking about how much time you really have available. Let’s use the PT example from earlier. In theory I have 35 “spare” hours a week to dedicate myself to a side hustle. I can assure you in the real world that 35 hours doesn’t exist, I wish it did because then my ironing pile might disappear and the house would always be clean. I guess what I am trying to say is don’t set yourself up for a fall because everyone needs downtime away from work and side hustles so it’s vital to be realistic about how long things take and the time you really have “spare”.
Non-compete
Depending on the nature of your intended side hustle it is important to check your employment contract to ensure that this will not impact your day job. Some will state that you have to ask permission before starting a side hustle and most will not allow you to work in a sector that competes with your employer or you risk dismissal.
Additional Paperwork
What started out as a hobby can quickly turn into biting off more than you can chew. At the time of writing this blog HMRC will allow you to earn £1000 tax free before you are required to tell them about the extra income. This equates to just over £19 per week. Some side hustles will be excluded from this so it always worth seeking advice and fully understanding the rules.
Assuming you breach the £1000, then you will need to complete a self-assessment and register as self-employed. The extra paperwork can be a bit of a headache. It’s important to keep a track of what you are earning, and you may also need to take out insurances to protect yourself. If in doubt, speak to an accountant so that you are “keeping everything above board”.
Impact on you
Whilst there are some amazing perks to side hustles, having set up a business and spent several years planning, I think both Caroline and I would agree rewarding as it has been, we massively under estimated the stress, time and commitment it would take. Don’t get me wrong I am glad we did it and it was absolutely the right decision but it is only now two years on that we are beginning to get some balance and structure. For someone thinking about a side hustle you will be attempting to do what we have done whilst doing your day job. It’s exciting and it spurs you on but don’t underestimate the impact on your health, wellbeing, your life and ultimately your day job which is helping you maintain the rest of your life.
Whilst not all hustles will make you the next billionaire, they can be enjoyable and of course have the potential to raise a little extra cash. They certainly won’t be right for everyone in the same way that some prefer to be employed and have stability, whereas others prefer the flexibility and freedom that self-employment creates.
As with every business idea, it is vital to be clear on what you want to achieve and be realistic. It can be very tempting to see some success from your side hustle and want to do it full time which is really positive but don’t be tempted to jack in your steady income stream from your main employment unless you have a business plan and savings in place as a back-up. Having stepped from a steady employment into the world of self-employment, take it from me that it can be a joy, but it can also be a bit scary at times!
For more help and advice or to receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, contact Yorkshire Financial Planning on 01482 275540 or complete our contact form here.
