How to Start a Side Hustle (Without Losing Your Mind or Your Money)
Let's be real—who among us couldn't use a little extra cash these days? 👋
(I mean, seriously, my breakfast tacos are becoming little chunks of gold with the price of eggs these days). With inflation driving up costs on everything from groceries to gas, creating a side hustle isn't just nice anymore, it’s necessary to get by. But, it’s easy for a side hustle to become a side HASSLE that’s not actually making money.
So, let's talk about how to start a side hustle the RIGHT way to help you get ahead in your financial journey.
Why Service-Based or Digital Side Hustles Win Every Time
When you're just starting out, the LAST thing you need is to sink thousands into inventory that might not sell. Trust me, I've seen the spare bedrooms full of products and the bank accounts of people who went that route!
Instead, focus on these two types of side hustles that require minimal startup costs:
Service-Based Side Hustles
These options leverage skills you already have:
Virtual assistance
Freelance writing/editing
Social media management
Coaching/consulting in your area of expertise
Website design/management
Tutoring/teaching
Need some help starting your service-based business? Check out my guide below!
Digital Product Side Hustles
These options are created once and sold repeatedly:
Online courses
Ebooks/guides
Templates (social media, email, worksheets)
Presets/digital designs
Printables (planners, worksheets, wall art)
Software tools/apps
Membership sites
The beauty of both these models? You can start TODAY with skills you already have, and there's no inventory sitting in your garage collecting dust (and draining your bank account).
Please note that it is important to choose a service that aligns with your expertise and ability and that you can actually deliver on, otherwise your business will be over before it even starts.
The #1 Side Hustle Mistake (That Will Cost You Thousands)
Want to know the biggest mistake I see side hustlers make? They don't separate their side hustle finances from day one.
I get it! When you're just starting, it feels overdramatic to set up a whole financial system for something that's only making a few hundred bucks. But this is exactly where so many people set themselves up for failure.
Here's what happens: You make a few sales, the money goes into your personal account, you spend it on groceries and bills, and suddenly tax time rolls around and you have NO IDEA:
How much your side hustle actually made
What expenses were truly business-related
How much you owe in taxes (surprise! It's probably more than you saved)
Even worse, you can't tell if your side hustle is actually profitable or if you're just keeping busy.
How to Start a Side Hustle Using the Financial System That Actually Works
Here's your simplified 4-step system:
Step 1: Set Up Separate Tracking
You don't necessarily need a business bank account on day one (though it helps!), but you DO need a system to track every dollar in and out of your side hustle.
This is where my ProfitWay Dashboard becomes your secret weapon. Unlike complicated accounting software, ProfitWay was built specifically for side hustlers and small business owners who need visual clarity without the learning curve.
The dashboard makes it dead simple to see:
Exactly how much you're making from each service or product
Where your money is going (hello, tax deductions!)
Whether you're actually profitable or just busy
Step 2: Price For PROFIT (Not Just Revenue)
One reason many side hustles fail is that people undercharge. They compare themselves to the cheapest option on the market and then discount from there. 🤦♀️
Instead, work backward:
Decide how much you want to earn hourly
Calculate ALL your costs (including taxes)
Add a profit margin (yes, even as a side hustle!)
Then set your prices
This ensures you're creating wealth, not just work.
Step 3: Save For Taxes From DAY ONE
Nothing kills a side hustle faster than a surprise tax bill. When you're self-employed, you're responsible for both sides of employment taxes plus income tax on your earnings.
That means setting aside approximately 25-30% of your profit for taxes.
My Estimated Tax Calculator takes the guesswork out of this process by helping you:
Calculate exactly how much to set aside based on your specific situation
Know when your quarterly payments are due
Avoid those nasty underpayment penalties
Tax surprises are the worst kind of surprises. Trust me on this one!
→ Need a deep-dive on estimated tax payments for small business owners? Check out this post!
Step 4: Schedule Weekly Money Time
Set a 15-minute weekly appointment with yourself to:
Update your income and expenses in ProfitWay
Review what services/products are most profitable
Transfer your tax savings to a separate account
Plan your next week's money-making activities
This simple habit will put you light years ahead of others (and be ready if you ever decide to make your side hustle bigger!)
You Can Make ANY Decision As Long As It's An Informed Decision
That's one of our core values at CBFS, and it's especially true when learning how to start a side hustle.
Some people will tell you to "just start" without any planning. Others will insist you need an MBA and a 50-page business plan before selling a single thing.
The truth is somewhere in the middle: You need enough financial clarity to make informed decisions, but not so much complexity that you never get started.
With a simple system like ProfitWay Dashboard to track your finances and the Estimated Tax Calculator to manage your tax obligations, you can focus your energy on what really matters: providing value and growing your side hustle into a wealth-building machine.
Ready to start your side hustle the right way? Get your Financial Foundations Starter Kit and set yourself up for success from day one!
What side hustle are you considering this year? Drop it in the comments, and I'll share some specific financial tips for your situation!
Cheers to building a wealthy life and business! 🥂
The Profitway Dashboard
This digital dashboard makes it easier than ever to visualize your business finances, set financial goals, and stay on track. Bonus: no expensive software or numbers knowledge required.
More Financial Resources:
Estimated Tax Payments For Small Business: How To Calculate Your Quarterly Payments
Why Reading Your Tax Return (& Not Just Signing It) Is Crucial For Small Business Owners
Disclaimer: While this guide provides valuable insights, it's important to note that every business has unique circumstances. For personalized advice tailored to your specific situation, please consult with a qualified tax professional. Our goal at CBFS is to empower you to make informed decisions that support your business growth and personal wealth-building objectives.
