After all, the side hustle gets me more money than my salary.
That is a saying that we hear or have said on several occasions. If you are in this position or are considering it, let us do a social experiment first.
While the books of your side hustle may be showing a profit, are you sure that they capture all the information? When your employees tell you there is a shortfall in stock, do you get money from the business to replenish the stock or pay the fines or do you dip into your employment income to supplement the business? And when you do this, do you remember to record the additional income as an injection of capital or as a loan if you intend to get the money back?
I know that is one paragraph with a lot of accounting terms. So the experiment next month is as follows. If you are seriously considering leaving your regular job to concentrate on your side hustle, how about transferring your full salary for this month into a fixed deposit account for one month (so it can earn interest and is not idly sitting by somewhere.
And how do you deal with your day to day expenses? With the income from your business of course as well as income from your various investments! Use this income to pay your rent, utilities, school fees and other monthly expenses as they come up. If you can do this comfortably, then you are ready to give up the day job. If your income from the business falls short, then you still need your day job.
With this in mind, you can make the decision to leave or not. You might also discover some practices that you would need to give up once you stop your day job.
Author of this article, Susan Nyakiamo has dedicated her life to helping people make better decisions with their finances. She does this by sending email updates, via her website (Suziema) and also via Campus Radio Kenya’s Money Matters segment. Visit her blog and subscribe to her mailing list to learn more about financial management.