I have a small dilemma. I am getting more private classes, which is a good thing, but it is causing some bookkeeping problems. Because these classes are a side hustle, I have to provide my own materials. This is not a problem as I enjoy planning my own curriculum and think the materials I create is better than what most schools use. The problem is that these materials are not free. I recoup the costs in less than an hour of work, but it is still money that I am spending. This is causing me to think about how I should track my expenses and income. Now I am just taking it out of my monthly allowance of 10,500 (Taiwan dollars, about 30 TWD to 1 USD) a month. This money is used for entertainment, household items, food, clothing, etc. But when I am spending an extra 700 on books or flashcards, that is 2 days worth of my allowance. The way I see it I have two ways I can approach this.
1. Stay the course and keep tracking it the way I am now. The benefit is that it will force me to think about whether the material is really necessary and will get me used to spending less on entertainment and food a whatnot. The con is that it wont give me an accurate representation of my spending. If I weren't pursuing this side hustle, I wouldn't be spending on these materials.
2. Deduct the expenses for materials from my side hustle income. So lets say this month I earned 10,000 from my side hustle, but spend 700 on materials, I only count 9,300 as income. In my head this works since I would be treating it as a business counts its profits. I am leaning towards this way because it will also let me see if the side hustle is really working. For example, if I ear 10,000 a month from the side hustle but am spending 11,000 on materials it will show that I am losing money.
TLDR - do you track side hustle expenses differently from other expenses? How should I calculate side hustle expenses/income?
Which of these methods would/do you use? Are there any other options that you would suggest?