Side-hustling can be a thing of beauty — or not.
Jackie Lam, a Los Angeles-based personal finance writer and money coach, has seen the best and the worst of the gig universe.
Side-hustling has worked very well for Lam, who runs the blog Hey Freelancer, but she knows many for whom it hasn’t.
“I hear that a lot from people who are trying to pay off their debt or have some money for savings. And then they just start hating life because they’re working all the time,” Lam said.
If you’re already holding down an office job, your time is a scarce resource so it’s important to use it wisely, expert side-giggers argue. Even when it comes to side hustles, it’s important not to lose track of the age-old question: what’s the bang for your buck?
READ MORE: The gig economy is making cash flow management a nearly impossible task
Side-hustling for a bit of extra money
If the sole purpose of your side-hustling is rounding off your regular paycheque, the key is making sure that the gig fits into your life.
Low barrier to entry
The first question you should ask yourself about this kind of gig is whether the job you’re looking at is going to be easy for you, Lam said.
Make sure you already have the skills and equipment to do whatever job or task you’re considering, she added. You don’t want to have to invest a lot of money or time into simply getting yourself up to speed.
Know your net hourly pay
Many side gigs come with unexpected or hidden costs, said Bridget Casey, who runs the Canadian financial literacy blog Money After Graduation.
“I think people are often surprised by how much they actually have to spend to do a side hustle and don’t usually factor that into the income that it earns,” Bridget said.
In addition to calculating taxes, if a job requires you to buy certain clothes and take public transportation, you should deduct those costs from your pay to get an idea of how much you’re actually going to taking home.
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As a rule of thumb, Casey advises aiming for jobs that pay at least $25 an hour.
“Here in Alberta, the minimum wage is $15 an hour,” said Casey, who is based in Calgary. “So if you can get something paying $25, that’s enough of a buffer.”
Time is another thing you’ll have to keep track of to ensure the job is really worth your while, Lam said. That’s a lesson she learned at her own expense.
When she took up a job facilitating wellness workshops, the hourly rate “looked great,” she said. But she later realized prep work and transportation times were taking up around four hours for every hour she got paid.
READ MORE: 6 painless ways to save $50 a month in 2019
Don’t lose track of your opportunity cost
The third variable to keep an eye on is your opportunity cost, Casey said. What else could you be doing with the time you’re devoting to your side gig?
If you’re a student, for example, “getting a C instead of a B in a class because you had to work 25 hours a week is going to hurt you in your career,” she said.
“That’s a terrible investment.”
Reassess periodically
It may take you a while to figure out exactly how much money you’re making per hour of gig work once you’ve taken into account all the subtle extra costs. That’s why it’s important to periodically reassess whether the job is working for you, Lam said.
Side-hustling with a bigger goal
Lam and Casey have both side-hustled to pay down their student loans faster. Lam used to pair up a job as a proofreader and editor with pet-sitting and exam proctoring. Casey lined up a chemistry tutoring gig on top of a day job. In addition, she would take up odd jobs she found on Kijiji during the weekend.
But both also took up personal finance writing on a freelance basis, which eventually morphed into full-time jobs.
Gigs aren’t always just about the extra income; they can also have a bigger goal. They can be the first step toward becoming your own boss, Lam said.
They can also be useful in developing skills that will help you advance in your regular job, Casey said, and a great way to test out a new career.
For example, if you’re thinking about quitting your current job and becoming a coder, you may want to spend some time building websites for clients on the side, she added.
“Before you jump ship and get a whole new education or try to start at the bottom of the new corporate ladder, why not … get some experience and some connections?”
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