How to Decide if You Should Launch Your Side Hustle
Before you launch a side hustle you should first evaluate if the opportunity cost of hustling is less than the profit you’d actually reap.
It’s 2019, and we all live insanely busy lives.
That said, in an era of wage stagnation, expensive housing,
You have to evaluate if the opportunity cost of hustling is less than the profit you’d reap.
I’m actually not a huge proponent of giving up all of your free time for side hustling.
When you tell me Beyonce has the same number of hours in a day as I do, I laugh in your face.
Not because Beyonce doesn’t work hard and kill it, but because our lives and the freedom we have to
But from personal experience, I do know that sometimes you hit a period in your life where hustling is absolutely necessary to get by or to accelerate you towards your financial goals.
Here are some basic ways to evaluate if starting a side hustle is going to benefit you—even if your schedule’s got you feeling too stressed to be blessed.
1. You’re having trouble meeting your financial goals.
Maybe you’re in debt. Maybe you’re struggling to pay your bills as you live paycheck-to-paycheck. Perhaps you’ve been wanting to take that amazing vacation for years, but just haven’t been able to get the cash together. You might know it’s good to save for retirement, but haven’t put a penny into an IRA because who has the money for all that?
Whatever your financial goals are, if you’re not meeting them, it’s time to consider a side hustle. If you’ve got time for it, awesome.
If you’re not sure how you’re going to fit it on your plate, read the rest of this article as there may be other things you can do before giving up more of your time to work.
2. You’ve cut all the costs.
There’s a good chance you’re not meeting your money goals because of mismanagement. No judgement. Money management is a behavioral science that involves math—which is to say almost all of us struggle with it in one way or another.
The very first thing you need to do is take account of how much you’re spending every month, and where that money is going. After you’ve tracked that, you can work to create a budget that either fits your spending habits, or cuts down on some of your spending.
Maybe you really don’t spend money on unnecessary items. If that’s the case, look at your necessary expenses and see if you can negotiate any of them down.
This most commonly works for cable and internet providers. With your electricity or gas bill, you may be able to choose another provider who will generate your electricity for a lower price. If you’re still with a major cell carrier, looking at cheaper alternatives such as Cricket or MetroPCS may just save you a bundle.
After you’ve locked that savings in, make sure you’re actually saving the difference every month. There’s no point in lowering your bills if the money you’re saving ends up going towards Ruby Tuesday visits or drinks with friends instead of your emergency fund or retirement account.
3. You’ve already asked for a raise at work.
So you’ve cut down costs as much as you possibly
Assuming you’re a good employee, you can put together a pitch for why you think you deserve a raise and present it to your boss.
While some workplaces will allow you to do this throughout the year, workplace etiquette at other employers will dictate that you wait until your annual review. If that’s the case, that’s fine—just make sure your boss knows you want to talk about compensation in your review.
Otherwise, they may have already doled out raises across their workforce before they even sat down with you, and you might not be happy with your percentage increase.
4. The opportunity cost of hustling is less than the profit.
You’ve cut all the costs. You track your spending. You stick to a budget, and you got turned down for a raise at work.
Well, it’s time to consider a side hustle, friend. Even if you don’t think you have the time to do it. If you don’t find the time, you may not reach your financial goals.
Here’s the thing, though: You have to evaluate if the opportunity cost of hustling is less than the profit you’d reap.
If you’ve got kids, maybe the cost of getting a sitter so you can go out to get that extra dough seriously cuts into your profits. At that point, maybe missing out on that limited time with your kids isn’t worth it—financial goals be damned.
If you have a disability that would make the drain of taking on a hustle worse for your health, taking on the extra work may not be worth the extra pay.
Whatever your situation, try to objectively evaluate the pros and cons of taking on extra work. It’s your life. There are circumstances that make a side hustle unviable even if you have a great financial need. But if you’ve got nothing other than, “I just really don’t want to,” realize that you might be sacrificing your financial goals because you don’t feel like putting in the extra elbow grease.