Author Topic: How should I track side hustle income/expenses?  (Read 1718 times)

johnintaiwan

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How should I track side hustle income/expenses?
« on: March 23, 2014, 06:19:42 AM »
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?

phred

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Re: How should I track side hustle income/expenses?
« Reply #1 on: March 23, 2014, 08:03:11 AM »
Door #2

You have business expenses which you should keep separate from your personal expenses.  This will make it easier to figure out your additional income tax from this additional income.

schimt

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Re: How should I track side hustle income/expenses?
« Reply #2 on: March 23, 2014, 08:10:22 AM »
I use categorizing and tags in my mint.com account to easily track things like this.

johnintaiwan

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Re: How should I track side hustle income/expenses?
« Reply #3 on: March 23, 2014, 08:40:11 AM »
Wow quick response! Thanks for the help, looks like the advice is for option #2


Quote
You have business expenses which you should keep separate from your personal expenses.  This will make it easier to figure out your additional income tax from this additional income.

This side hustle is all under the table and will be following the local custom of not informing the government of the extra income. It is just the way things are done here. I have tried to pay before but was met with puzzled looks of why I would let them know that at the tax office. In the end they wouldn't let me report the extra income.

Quote
I use categorizing and tags in my mint.com account to easily track things like this.

I am jealous of everyone who uses mint, but living over here I don't use my CC since there are not many places that will take them, and it is a hassle trying to go between currencies and manually inputting everything. Instead i just use an excel sheet.