Increased Costs Since Switching To Self-Employment

Increased Costs Since Switching To Self-EmploymentSelf-employment has been pretty great these past 9 months.

I’m having fun, I love my flexible schedule, being location independent is absolutely amazing, I love the work I’m doing, and everything overall is good right now.

One thing many people don’t think about is that even though you work from home, your expenses might actually increase. Working from home and self-employment does not automatically mean that you will be saving hoards of money.

Before I get to the part about how certain things have become more expensive I do want to say that for the most part my expenses have decreased in many areas:

  • Clothing. I’m not sure if this is good or bad (does this mean I’ve let myself go? haha), but I definitely spend a lot less money on clothing than I used to. I think it helps a lot that I don’t need much when it comes to professional clothing anymore and that’s where a lot of my clothing spending used to go.
  • Transportation. I spend a lot less in transportation than I used to. I don’t have to drive to work 5 days a week anymore.
  • Food. I don’t spend anywhere near the amount I used to spend on food. Now, we mainly eat at home and it’s cheaper and much tastier.

 

Below are different areas in which my expenses have increased:

Electricity, Gas, and water.

During this past winter, our gas bill was a little bit higher. The same goes for during the summer months so far.

This is because I am home all the time now and I want my home to stay at a comfortable temperature all day long pretty much, and also because I am using more electricity (charging electronics, lights, etc.) than we were when no one was home during the day.

We are also using more water as well. But that could also be attributed to the fact that my sister lives with us and has been at home more.

The electric, gas, and water bills haven’t significantly increased, but I believe I am spending around $30 to $50 more each month in these areas altogether.

Taxes.

I am paying much more in taxes now, and I think it hurts a little more because they aren’t automatically taken out of my paychecks before I can actually see it in an account.

I also have to pay self-employment tax now.

Health Insurance.

Wes and I each used to have health insurance through our employers.

Now, we pay $200 a month for super horrible health insurance. I believe our deductible is somewhere around $12,000, so I know that before our health insurance will even kick in, one of us will have to be seriously ill.

We plan on looking for better health insurance when we plan on having children though. However, I have heard of other self-employed people paying over $1,000 a month for their family’s health insurance, which is a scary number!

Home office.

I’m not completely done with my home office, but I do have almost everything gathered. I have been scouring Pinterest to get an idea of what I want.

A home office costs money. Yes, you can make a home office for cheap, but I am wanting it to be a place where I can get inspired and actually get work done. Luckily, I did get a lot of great gifts at our wedding specifically for my home office, so that will make it cheaper as well.

What other costs do you think would increase if you were to switch to self-employment?

Anything above surprise you?

 

Why I’d Rather Have A Side Hustle Than A Part-Time Job

Why I'd Rather Have A Side Hustle Than A Part-Time JobA few years ago, I decided I wanted/needed a way to make extra money.

I was working full-time as a financial analyst after I graduated from college, but I wasn’t making as much money as I hoped for.

I had a large pile of student loans and the small payments that I was able to make each month just didn’t seem like they were bringing my overall student loan payment down at all.

I believe my student loan minimum payments were around $500 each month, which was a good deal of money when you also added in the fact that I had a mortgage to pay for, food, pets, utilities and more.

It didn’t seem like there was much leftover, and we were hardly saving any money.

One thing I knew that I had though was time. Even though I was working full-time and I was going to classes full-time for my Finance MBA, I knew I still had some extra time where I could work towards making extra money.

The next thing I had to think about was whether or not I wanted a part-time job. I didn’t really know much about side hustling at this time, as it was still a whole new world to me. I had my blog, but I didn’t start it to make money so I was still stuck in the “get a part-time job” mindset.

Below are the reasons for why I knew I needed a side hustle instead of a part-time job:

I needed something with a flexible schedule.

Since I was working around 50 hours at my day job and attending MBA classes around 14 hours each week, I knew I didn’t have much time to fit in a realistic part-time job.

Between commuting, my day job and my classes, I was busy around 75 hours each week. I would leave for work at 7 a.m., get off around 5:30 p.m., then drive straight to my night classes until 10 p.m. each day.

Finding a part-time job that would have been very difficult. I would have only been able to work on the weekends, and I knew that I didn’t want to work 7 days a week for months or years into the future. I still wanted to keep at least somewhat of a normal life.

This meant that I needed to find something with a flexible schedule.

I decided that online side hustling was something that I wanted to try. Working online was a big positive for me because I would be able to work from home, and I would also be able to create my own schedule.

I could work in the mornings before work, on my lunch break, after I got home from my night classes, and on the weekends.

Having a flexible side job was the best solution for me.

I didn’t want to work for someone else.

Since I was already working for someone else during the day, I knew I didn’t want to continue that with my side hustle. I wanted something that I could have to myself.

I wanted to be my own boss. Also, I wanted something that I could maybe one day grow into a larger business and have it become my career. I didn’t have a game plan in the beginning, but luckily everything turned out exactly how I would have wanted it to.

I didn’t want my income to be limited.

With a part-time job, there is really only so much money you can make. You are usually limited to an hourly rate, and there are only so many hours that you can realistically work.

I knew that if I had a part-time job, there was realistically only two days where I could work – Saturday and Sunday – since I had my day job and my MBA classes usually Monday through Friday. So that would mean that even with the best part-time schedule, I could probably only work 16 hours a week at a part-time job, and it probably would have been at or close to minimum wage

However, with a side hustle, your income isn’t as limited. You can create a product or a service that is valuable to potential customers. You may even be able to create something that is passive that continually earns you money.

The options are endless with a side hustle. There are just so many different ways to make money!

Would you rather have a side hustle or a part-time job? Why?

 

Common Excuses For Not Starting A Side Hustle

Common Excuses For Not Starting A Side HustleI started blogging in August of 2011. Soon after I started blogging, I started to side hustle by providing online services to other website owners.

I was working an average of 90 to 100 hours each week, and this went on for a few years.

I would wake up early in the morning before work, side hustle for around an hour or two, then I would go to my day job as a financial analyst. I would use my hour-long lunch break for my side hustle. I would then get home at around 6 p.m. and side hustle some more. I would side hustle on the weekends as well.

I’m not going to lie, I was probably a little on the excessive side. However, I had many goals on my mind when I was doing all of this.

  • I wanted to pay off my student loans. I had around $40,000 in student loans and I didn’t want them hanging over my head forever. I made a goal to use my side hustle income for my student loan payments. I ended up paying them off in July of 2013, at the age of 24.
  • I wanted to leave my day job. I found that I really loved my side hustles. I loved them so much that I created a plan to leave my day job and focus on full-time freelancing. My last day at my day job was in October of 2013.

So, even if you don’t want to dedicate a full 40 hours a week to a “side hustle,” you can still spend just a few hours a week and possibly earn enough to reach a goal of yours.

Maybe you want to go on a vacation, pay off your student loans, pay off some credit card debt, or just have more spending money in general. A side hustle can allow you to do this.

 

Below are common excuses I have heard for why a person does not start a side hustle:

I’m already too busy.

Many people tell me that they are too busy to start a side hustle or a side job. Yes, some people are honestly busy. I don’t know how some people do it.

However, there are many others out there who say they are too busy when in reality they are not. There are probably time wasters out there that you can cut out of your life so that you can make time for a side hustle.

If you really wanted to have a side hustle, you would find time for it!

It’s really that simple.

There’s nothing out there for me.

So many people give up because they don’t think they will find anything. Yes, in some areas the economy might not be the greatest yet, but I’m sure if you set your heart on it that you could find something.

And, if you can’t find something, maybe you should get out there and MAKE something for yourself. I’m sure there is something out there that you could do where you are providing a service to a family or small business owner (such as babysitting, house sitting, dog walking, freelancing, etc.).

It’s not worth it for me to work for so little.

Sometimes a side hustle won’t make you a ton of money. That is common since you won’t be dedicating your full-time life to it.

Some think that making just a few extra hundred dollars wouldn’t be worth it, so they just skip the whole idea altogether.

If you really need the money though and you want to reach financial goals a little more quickly, then a side hustle may be exactly what you need.

Just spending a few extra hours each week on a side job can add up month by month.

Do you have a side hustle? Why or why not?