It seems like side income is all the rage. All over the world of personal finance blogs, there are people that are really getting into the idea of making side income. Some are succeeding wildly, others are able to make a few bucks here and there, and yet others are reading everything and salivating at the possibilities of bringing in more money!
That bring up the question, to me at least, of how people plan to handle the extra money. What can someone do with the side income, in terms of his or her own budget or finances?
The way I have been operating, side income is not a primary source of income. The efforts to make it are not insignificant, but they aren’t my main focus in terms of my time. Rather, much more time and energy goes to toward the my actual career and interest in taking care of my family. I say this based on the reality of the situation, though I am captivated by side income and do strongly believe in the importance of multiple streams of income.
Thus, the priorities are clear in terms of what I count on.
Having said that, there are probably many different ways people could handle side income. Here are a few examples that came to mind quickly, in terms of what people could do with side income:
- Pay for regular, daily expenses
- Use it to buy things above and beyond what you could normally afford
- Treat oneself
- Safe for a specific purpose (example: wedding)
- Use it for investments
- Set it aside as truly incremental savings
The latter is what I’m using side income for at this point. Incremental savings, above and beyond anything else put aside.
I look at it this way: If it’s truly side income, and not the main source of income, then I’m not going to count on it. It’s like a special bonus, that is purely upside. If it disappears, I could still function as I would otherwise normally do. Bills would be paid, retirement savings would be set aside. To the extent that the side income can add to this without time earning it taking away from the day job, then it’s all good!
Of course, we all have different situations and approaches to things, so I’m interested in how you handle side income.
Readers, what do you do with your side income? If you don’t currently have much, what would you do with it if you did have it?