Michelle has been doing an amazing job with extra income lately. Her blog has been taking off and that’s helping her make a ton of side income every month. Due to this, she’s been getting a boat load of emails about blogging for side income and has even written a few great posts about how to make money blogging. Hopefully her readers have benefitted from her tips and are starting to make money at their own blogs.
One thing she hasn’t covered is what to do with all of that extra income. One of my favorite things about extra income is that it’s not included in the budget, so you can really do anything you want with it. That said, it might not be the best idea to blow it on shopping. So what should you do with your extra income?
Use Your Side Hustle Income to Pay Off Debt
This is probably my number one suggestion for extra income. I make a bit of cash every month through staff writing and my own blog, My Alternate Life. Up until a few days ago, I’ve thrown everything I’ve earned at my debt. This has been a huge boon to me because it’s shortened my debt pay off window. When I first started trying to pay off the $38,000 of debt I’d accumulated through school, my best calculations had me debt free in five years.
Now it looks like I’ll be debt free before my the two year anniversary of Operation Pay Off Debt. This is partly due to me putting all of my extra income towards my debt. Michelle is employing the same strategy to pay off her $38,000 in student loans, and she’s managing to get rid of them amazingly quickly.
Use Your Extra Income to Build Up an Emergency Fund
Using extra income to build an emergency fund and insurance is a great way to use your side hustle to make yourself more secure. While most experts suggest that an emergency fund consisting of 3-6 months of expenses is ideal, very few people actually have this on hand (including me, until I get my debt paid off). Using extra income to fund your emergency fund is a great way to beef it up without having to re-balance your budget.
Take Your Extra Income and Start a “Fun” Fund
This is one of my eventual goals with my emergency fund. Once my debt is paid off, and my emergency fund is fully funded, I plan on shoveling everything I make in side income into a “Fun” Fund. I’ll probably use it for travel and furnishing our 400 sq. ft. house properly. I can’t wait! The best thing about this is that I can have lots of fun without interfering with my other goals, like saving for a house and funding my retirement.
Side Income is Dead Useful
Side income is a great way to achieve your goals faster than you thought possible. My side income has helped me pay off a crazy amount of debt in a very short period of time, which has kept me motivated and interested in those goals. Your side income could work the same wonders in your financial situation, if you’re smart about how you spend it.