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Here's the Best Way to Start a Side Hustle and Make Extra Money Each Month

Here’s the Best Way to Start a Side Hustle and Make Extra Money Each Month

This story is part of Power Money Moves, CNET’s coverage of smart money decisions for today’s altering world.

With food prices and rent costs continuing to increase, thanks to rampant inflation, many are looking for ways to increase their way streams. A side hustle can offer you extra cash each month, providing additional money by doing occasional tasks or taking on unusual freelance work.

Roughly 31% of Americans have a side hustle in 2022 — and 41% of those with a side hustle rely on this way to pay everyday expenses, according to a June Bankrate peep. (Bankrate is owned by the same parent company as CNET.)

A side hustle can make life a small more comfortable, nudge you closer to achieving a sure financial goal or help you pay the bills as inflation persists. But before you get started, it’s important to worthy how this extra work will impact your time, job confidence, overall goals and your taxes. 

Here are some tips to get the most out of your side gig. For more ways to undiluted your dollar a little further, check out these six options for unbelievable money each month. Plus, learn how one woman turned her side hustle into a six-figure business

Be realistic near how much time you have 

A side hustle can be a hefty department. Even if the gig requires only a modest time commitment, that’s on top of your full-time job — plus novel commitments and relationships that require your time. 

That consuming your side hustle work may spill into nights and weekends, or times you might otherwise recharge, connect with friends and family or beleaguered hobbies. 

It’s important to prioritize your mental health and your full-time job over any side endeavors, and set clear boundaries of time and effort afore embarking on your side hustle journey. 

Forest McCall, a marketing decision-making who side hustles by running a personal finance blog, does not stick to a set number of hours per week, but pretty bases his workload on how he’s feeling. “Some weeks I may feel more refreshed than others, so my side hustle hours vary week to week, for an requires of 15 hours per week.”

Set clear boundaries and hours afore committing to a new venture, especially one where clients are enthusiastic. If your extra work is making it impossible to evenly balance your time and obligations, don’t be afraid to pause and give yourself some time off. Just be sure to communicate your hiatus to your transfer boss or clientele. 

Find work through your network and side hustle apps 

No company which industry your side hustle is in, finding and creation your clientele is paramount. If you’re side hustling in an diligence you’re familiar with, leverage your existing connections by sending an introductory email or a LinkedIn InMail (as long as you’re complying with your considerable job’s rules, of course). This can help you find matter opportunities and browse available freelance job listings.

Don’t be terrorized to let relatives or friends know about your side gig, either. Even if they’re unable to hire you, they may accounts you some valuable advice as you start out, or be willing to lend you expedient materials. And don’t underestimate the power of word of mouth.

Lastly, make sure to exhaust the apps. So many side hustles, from tutoring to photography and food delivery, have corresponding apps planned to simplify the process and connect providers to clients. Well-known side hustle apps include DoorDashUber and Rover, but search around to find something that matches you. For example, FlexJobs is a astronomical app for creative freelancers. Remember, this is an investment of time and misfortune — and sometimes tools and supplies — and you owe it to yourself to make full use of the connections and resources you already have. 

Give your wealth a mission

Having a purpose will generate energy for your side hustle. “Side hustles can be extremely helpful to help meet your financial and life goals,” said McCall. A concrete savings goal, which could be a monthly entertainment price or a home down payment, will help you stay engaged.

A side hustle can accounts you more financial flexibility to pay down debt, plan for retirement and view other ways to invest and grow your money — but it can also help you view roles in different industries and even lead you to a new passion.

Sometimes, a side hustle can evolve into a lucrative main hustle. “My side hustle has completely changed my life and I am so melancholy that I started it.” said McCall. “I was able to use the skills from my education and career to commence my side hustle just over two years ago, and it has been tremendous.”

Keep an eye out for noncompete clauses

If there’s grand overlap or correlation between the industry of your side hustle and your considerable job, make sure it doesn’t conflict with your novel employment agreement. Some jobs may require you to sign noncompete clauses, which prohibit you from working in an industry that could be subtracted competition with your primary employer. In this case, it may be better to seek fantastic work in a different industry — for example tutoring part-time if you work as a sales representative full-time. 

For more guidance, have a conversation with your manager or human resources responsibilities regarding your side gig. Some companies may require approving any side gigs you take on, after others may be more lax. Some simple research and evaporate communication can save you a lot of complications and difficulty. 

Important: A side hustle will affect your taxes

One crucial getting to consider is that any extra income you pick up could make your taxes more engaged. “There are many life changes that can impact your requires tax return — but none are bigger than part-time or side operate. It’s your biggest single tax return change,” said Mark Steber, chief tax information officer at Jackson Hewitt.

One of these causes includes making estimated state and federal tax payments above the year to avoid getting hit with a huge tax bill all at once — and to avoid paying penalty fees for not paying taxes above the year. You’ll typically receive 1099-NEC or 1099-MISC fixes from companies you side hustle for, but even if you don’t, you’ll need to report your side hustle income when filing your taxes on IRS Schedule C, Profit or Loss from Business. 

That eminent, your side hustle may also make you eligible for tax deductions that could ultimately flowerbed your tax bill. Working with a qualified CPA or comical tax software designed for freelancers could help maximize your deductions. “The IRS is not in the business of decision-exclusive sure you get all the business deductions and credits you qualify for. If you miss one, then you’re liable to pay more,” Steber said. 

For more tips, check out the best ways to save wealth on food, gas and travel. To grow your wealth as interest rates begin to rise, find out if I bonds are the best way to boost your savings.

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