Author Topic: Side-gig Income?  (Read 3021 times)

sweetpea202

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Side-gig Income?
« on: October 11, 2016, 03:59:58 PM »
I just started an new side-gig and it's turning out to be way more lucrative than I expected. So, now the question is...what should I do with this additional income ($600-900/month). We (husband and I) have no debt except the mortgage and we are already throwing money ($2000/month) into index funds. I started doing this to get experience in something that I want to do later, so the money is really a bonus for me. The thing is that to make the extra money, I need to spend 1-2 hours a day on top of my normal full time job. I'm not a problem doing that now but I'm worried about losing motivation if I don't have a goal in mind. Since it's extra work, part of me wants to spend it on something more "fun" than just investing in index funds. I thought that maybe a good compromise would be to "invest" in some home upgrades/renovations since we'll be selling within the next 1-2 years. Am I just rationalizing a spending spree on new appliances or does it make sense that my extra income could go towards a different type of investment. Is is silly that I want to treat this money differently from my normal income since it's "extra work"? Suggestions, thoughts etc please!
« Last Edit: October 11, 2016, 07:13:26 PM by sweetpea202 »

Shor

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Re: Side-gig Income?
« Reply #1 on: October 11, 2016, 06:12:44 PM »
Even a little bit of extra money can give you a huge step up in luxury or a larger fuel tank for FIRE.
Spend some, save some. So long as your regular income savings is already accumulating fast enough there's really not a huge need to throw everything in to the furnace to FIRE.
1k / mo easily covers all of your food, eating out, entertainment in a single month. You can even save up the extra and either put it toward investing.. or have a super luxury vacation once per year! Wooo! Make it rain!

You have a job, great!
You found a side income that makes good money. Fricken awesome!

While Some personalities can hunker down and toss all of the gains in to the account,
Other people need to be looser with the budget, and then they can keep going for 10-15 more years easily.

thedayisbrave

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Re: Side-gig Income?
« Reply #2 on: October 11, 2016, 06:32:32 PM »
Agreed.  It's ok to spend a little of it :-)

meghan88

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Re: Side-gig Income?
« Reply #3 on: October 11, 2016, 06:47:55 PM »
If you're selling in 1-2 years, perhaps it might be best to think about the return on investment you'd get from new appliances or renovations?  You won't get to enjoy them for very long, and not all renovations will recoup their cost.  Might be better to do some cosmetic fixes and pay down the mortgage with the rest?  Maybe spend it 50/50 between mortgage and renos/appliances?

NestEggChick (formerly PFgal)

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Re: Side-gig Income?
« Reply #4 on: October 15, 2016, 09:37:21 AM »
I think you're right, and agree with the others, that's important to have some fun with the extra money so you stay motivated. Since you need to find balance, try giving some thought to setting specific limits. Maybe a percentage, where 10% (or some other amount) every month goes towards something fun. Or it could be that you have a fixed amount you save, so the first $500 (or whatever amount) goes towards index funds and the rest goes towards something fun. Take some time to think about what would be most exciting for you. A fancy meal out once a week? Saving for a big trip? Starting a new hobby? Make it something you've wanted, and treat yourself. And congratulations on the excellent side gig! Well done!

arebelspy

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Re: Side-gig Income?
« Reply #5 on: October 23, 2016, 06:08:23 AM »
So, now the question is...what should I do with this additional income ($600-900/month). We (husband and I) have no debt except the mortgage and we are already throwing money ($2000/month) into index funds.

...and?  There's no limit to the amount you can save.  ;)

Quote
I started doing this to get experience in something that I want to do later, so the money is really a bonus for me.

Sure, it's unexpected, but it's still money that can be put to use.  There's no rational reason to blow it, or use it any differently than you are with excess money (that 2k/mo) you are now.

Quote
Is is silly that I want to treat this money differently from my normal income since it's "extra work"?

To put it simply... yes.  :)

Some people want to be a little silly, and that's fine.  Others prefer a rational approach, and that's okay, too.

Decide what you want, what your goals are, and go for them.  Then something like this won't even be a question, because your spending will align with your values.

Good luck!  :)
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Metric Mouse

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Re: Side-gig Income?
« Reply #6 on: October 23, 2016, 11:45:05 PM »
If you're selling in 1-2 years, perhaps it might be best to think about the return on investment you'd get from new appliances or renovations?  You won't get to enjoy them for very long, and not all renovations will recoup their cost.  Might be better to do some cosmetic fixes and pay down the mortgage with the rest?  Maybe spend it 50/50 between mortgage and renos/appliances?

At first I thought this was silly, but the more I thought about it, perhaps paying off the mortage isn't the worst thing to do. It'll feel like "splurging" towards a goal, but it's really saving, even though it's probably at a lower interest rate than could be had elsewhere.  Might get the mental benefits of spending with most of the advantages of savings.  Just a thought.

Goldielocks

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Re: Side-gig Income?
« Reply #7 on: October 24, 2016, 12:19:49 AM »
I deposit mine into a secondary savings account, and every two weeks look at it and decide what to do.  Default is to transfer it to investments, but I can just as easily use it for Christmas presents, a small vacation, etc.   I have only spent it once.  It is nice to look at so often, and make the choice, and that is actually the fun part for me.