Everyone with a side hustle needs to know how to manage their money. Not only do you need to keep an eye on your profits, but you need to stay on top of taxes, savings and expenses too. Whether you’ve recently started a side hustle or your endeavour is doing much better than expected, it’s never too early to think about how you should be managing your money. In this blog, you will find some great tips on how to get all your finances in order so you can move forward in the best possible way.
Get your savings in order
Lots of people with a side hustle use their income stream to top up their savings. If you have been putting most of your extra income into the bank without thinking too much about it, it might be time to reassess the account you’ve chosen. Interest rates can change at any point in the year, so chances are the savings account you have is no longer the best one for your needs. Don’t worry though, it’s easy to move money around as long as you’re not locked into a fixed-term agreement. You can even transfer your ISA from last year without it affecting your current year’s allowance. Have a shop around and read the fine print on any accounts you currently have open to understand exactly how you can get more out of your money.
Don’t be afraid to reinvest
If your side hustle is going really well, you might want to consider growing it into something more substantial. It’s normal to worry about investing money into a business, but doing so could help you to drive more money your way, especially if you spend that money on marketing. While it’s always good to have a nest egg for a rainy day, think about things that would help you run your business more effectively and attract your customers. Then, spend your money wisely and watch your side hustle flourish.
Monitor your tax situation
It’s really easy to get caught out by the taxman when you have a side hustle. What might have started as a trickle of income could quickly snowball and push you over the tax threshold without you realising. Make sure you’re always aware of exactly how much profit you’ve made and keep track of your expenses. You’ll also need to learn how to fill out a tax return if your income goes over your personal allowance. Pay close attention to deadlines, as missing them could result in hefty fines you would do well to avoid.
Good financial planning is essential for everyone, but even more so for those venturing out into the world of business with a side hustle. Falling into bad financial habits will only make the road ahead much more difficult and may even be your side hustle’s downfall. Start planning now and prepare for the future so you can be as financially successful as possible.
