September 18, 2023
If you’re like almost half of Americans, you have a great side hustle bringing in extra cash in addition your full-time job. Whether it’s freelancing, side gigs, or pet sitting, many of us find it helpful to make money on the side. Here are some tips for putting that extra money to good use.
Pay Off Debt
OK, this one isn’t fun, but one of the best reasons to have a side hustle is to pay off debt. Credit cards, auto loans, student loans — there are plenty of things that might be holding you back from stuff you want to put your money toward (like a house, retirement, or more hats for your succulent, Henry).
Start by sorting your obligations into good vs. bad debt so you can prioritize.
Start by sorting your obligations into good vs. bad debt so you can prioritize. If you have medical or credit card debt, choose a payoff strategy that works for you and stick to it. Consolidation can simplify things by combining all your debt into one monthly payment. If you choose to use a balance transfer to consolidate, check out our tips for choosing the right balance transfer card.
If your car loan is the issue, think about refinancing for a lower APR or smaller, more manageable monthly payments. And speaking of refinancing, it’s possible to refinance student loans, too. Once you have a plan for your debt, it’s time to attack it with your extra income.
Paying Off Student Loans Early
Paying off debt is usually a good thing, but it isn’t always smart to pay off your student loans early. Credit cards, personal loans, and medical debt usually have higher interest, so in most cases you want to pay those off first. If you’re struggling to make your federal student loan payments, contact your lender to change your repayment plan or suspend your loans temporarily.
Credit cards, personal loans, and medical debt usually have higher interest, so in most cases you want to pay those off first.
Sure, you can use a personal loan to cover a vacation, but you’ll have a better time knowing your trip is already paid for with the extra cash from your side job. Use our tips to save money for travel and get there even faster!
Or put your rewards travel credit card to use for those great upgrades and use the money from your side hustle to pay it off. (No one says you have to carry a balance to enjoy awesome rewards.) Once your bags are packed, read through "6 Smart Ways to Travel Cheaply" to maximize your savings while still having a blast.
You’ll have a better time knowing your trip is already paid for with extra cash.
Cover Home Improvements
Homes require maintenance. According to the Bureau of Labor Statistics, the mean annual spending for maintenance, repairs, and insurance in the U.S. comes to $2,335. Putting off repairs can lead to more damage and greater costs down the line, but it isn’t easy to shell out so much at once.
You can use a HELOC or personal loan for home repairs, but that means taking on debt and paying interest on what you borrow. Funding those repairs with your side hustle instead could save you thousands of dollars.
Funding home repairs with your side hustle instead could save you thousands of dollars.
Buy Your Dream Car
Whether it’s a cherry red ’75 Chevy or just something a little newer, a side job is a great way to pay for a new (or new-to-you) car. In addition to making money on the side, there are other simple steps you can take to afford the car you really want. You can also put the money toward maintenance and improvements on your current car if you want to give Ol’ Betsy a life well beyond the 100,000-mile mark.
Fund a Passive Income Stream
Why work more when you can make your money work instead? Setting up a passive income stream takes effort and financial investment on the front end, but as it matures it can become lucrative, especially if you continue nurturing it.
Don’t have a passive income stream? No worries! There are lots of ways to get started.
Enjoy a Hobby
Today, it’s easier than ever to learn a new hobby. Curious about quilting? Always wanted to take up Tae Kwon Do? Use that sweet side hustle cash to cover startup costs, pay for lessons, or even visit a convention to connect with like-minded enthusiasts.
If you’re all about hustle, you can even learn to monetize your hobby through affiliate marketing, selling digital or handmade products, or monetizing your hobby blog.
Monetize your hobby through affiliate marketing, selling digital or handmade products, or monetizing your hobby blog.
Take Classes for Work
Learning new skills is a great way to get ahead at work. Of course, learning new skills can cost money whether you’re using a subscription-based online learning platform, buying books, or taking courses at the local college. Using your side hustle money to cover those costs is a great way to reinvest it. Who knows? It might even translate into a raise, promotion, or great new career.
Use your part time job or side gig to stash extra cash for your golden years.
Save for Retirement
When your fav high school fashions are back in style, it’s a sign you’re getting old — ahem, old enough to think about retirement. Hopefully, you’re saving enough to get the full 401(k) match your employer offers, but nothing says you have to stop saving there. Use your part time job or side gig to stash extra cash for your golden years.
If you don’t get an employer match or you’re looking for a supplement to your 401(k), we have a rundown on other retirement options, including an IRA Basics article. Remember, each dollar you save today will be worth much more in a few years through the magic of compound interest, so don’t wait!
Clearly you know how to make the dough. Now you know how to spend it! Give yourself a pat on the back and relax knowing you’re putting your hard-earned money to good use.