Balancing work and enjoying life doesn’t have to be a struggle. You can start by creating an income stream from a passion of yours. With some time and effort, it could grow into your main income. I have found that by starting out as a side income, you give yourself permission to experiment and try out new ideas compared to experimenting with your ‘main’ job.
Some Work Ideas to Consider
We each have our own passions and talents. It’s not as hard as you think to start making some money doing something you enjoy and fill someone else’s need. I accidentally discovered that freelance writing has filled a need with something that I absolutely enjoy doing.
Some people think that to make money you HAVE to have some online venture, but that’s not the case. It can be something that you’ll do out of your home.
Where do you start? Here are some ideas:
- Cleaning Offices or Houses
- Repairing from Your Garage
- Landscaping
- Web Design
- Moving
- Bookkeeping
- Crafts (Crocheting, Knitting, etc)
- Hairdressing
- Pet Grooming
If you don’t know if a particular job is really you passion ask yourself if you have to work at this day and night for the next year or two without making money, would you stick with it?
How will you use the extra income?
If you have money coming in with from your passion, where do you allocate the money? You have to ask yourself where do you want to start off:
- Build an emergency fund of 3 months?
- Pay off all credit card debt?
- Save for a vacation?
- Take classes to grow more proficient in your skills?
I can’t decide for you because this is your life, your passion. You have to decide how you want to use your money.
What I will do next is consider two of those options that I would explore first.
Choosing Between Savings and Debt Reduction
If life were purely based on numbers, then paying off my debt immediately would be the way to go. The problem with that reasoning is bad stuff happens when you least expect it. If you’re putting every last dollar into paying down your debt with no savings set aside, then you’re leaving yourself financially vulnerable.
Bad events keep you in this cycle. How do you solve this? Create a emergency fund for the most likely scenarios you would encounter. How much you should you set aside for this account? That depends on your circumstances. Dave Ramsey suggests $1,000, but I think this is really based on your personal circumstances.
From there, pay your debts down while saving a small percentage into your savings. You’ll build your cushion up, but still pay your debts faster.
Your Thoughts
What about you? What is your passion? What are your financial goals?
Fortunately I am incredible at Tiddlywinks, now to find a way of monetizing that talent.
I think anyone can find something of value they can offer to others whether it be some skill or knowledge. The trick is identifying it and figuring out how to differentiate your offering from the other available options.
As far as where the money goes, its highly dependent on your individual financial situation and goals. In my opinion, Emergency Fund > High-Interest Debt > Savings = Low-Interest Debt.
My fiance and I established and emergency fund of 3 months worth of living expenses. We then proceeded to pay off all of our consumer debt. Next we split our additional funds between paying extra on our remaining debt (student loans) and beefing up our emergency fund until it was at 6 months of living expenses. Now that we’ve hit the 6 month target, we’re maxing out Roth IRA contributions and throwing everything else at our remaining student loan balance.
While the money is a little less accessible, Roth IRAs are a great location to deposit additional savings. The long-term tax benefits are amazing and you still have access to your cash (up to the amount deposited) penalty free if you get in a pinch. Once you miss the deposit window, you can never get the opportunity back. if you meet the income limit thresholds, you can still make 2009 contributions until April 15, 2010!
I’ve been thinking recently that I should just go ahead and try to start a side business helping others do what I do. What I do is adventure. I love to go camping, white-water rafting, rock climbing, hiking, etc. These are activities I’ve been doing all of my life, and the reaction I get when I take others amazes me. What seems so easy to me (the planning and getting there) is completely foreign to others. I think I can set up a business putting trips together.
Then I’ll be able to use the money to replace my current job (I’m a college student, and my part-time job just needs to go), and then putting the extra towards those pesky student loans, which is the only debt that I have.
Great article Laura, and great advice. When I was still working, I started doing freelance computer work. I’ve always been a techy/geek. So I used it to make side income to help speed up the repayment of debt. Eventually my side hustles became my extra savings, that gave me the freedom to tell my boss to beat it.
I think the best advice is for people to pay off the debt first, then create a 6 month living expenses savings. If you have a great side business, at 6 months, you should have enough saved to leave your day job if you think you can make it. Sometimes it might take more savings.
Hi Laura – Thanks for your post. I think we all have some skills that can manifest itself in some kind of income stream.
Mine is teaching tennis if I ever retire or lose my job. My wife is to teach violin and piano. I guess I could always mow lawns, but I might sneeze myself to death!
Those are some sought skills that many people are willing to pay to learn. My family has made some side income with tutoring in Spanish and also teaching the guitar. It’s a great way for them to stay fresh with their skills and make some money.
Great post. I’ve been half-thinking about resurrecting my old PC system builder business out here in my new town. At a minimum, it would only cost about $20 to register a dba name at the county clerk’s office. What has been holding my back is the fact that I haven’t been out here that long and only know about two dozen people. And marketing is not my strong point. In fact, it’s probably in the top 5 for weakest points.
Edward, I’m starting small with my freelance work too. I’m focusing on a sites and clients right now and I noticed as I successfully complete a project, I’m getting more work from clients. I hope it goes well for you with the PC systems business!
Tyler: It’s about starting with the first step: finding something that you love and could generate some income for yourself. For some people, their barrier is getting started and having a plan for side income. In later posts, marketing and business due diligence can be discussed in detail because I do believe they are serious topics to discuss.
If you’re a freelance worker, I’d love to get your thoughts on building your business for a future post.