As the federal budget is revealed, how does this impact young Aussies.
Unless you’ve been living under a rock for the past few months, you’ve most likely been aware of the rising cost of living in Australia. Whether it’s been a splashy news headline, or a hefty price tag that’s made your jaw drop to the floor…there’s really been no escaping the constant reminders that we should prepare ourselves for a bit of a rough ride. As we’ve seen some chunky price increases across a wide range of everyday goods, including food, petrol, energy and housing (if you opted for the living under a rock thing…kind of seems like that was a smart choice in retrospect), a large portion of Aussies may have had to reconsider their budget and dramatically cut costs wherever possible. For others, finding additional income streams…more commonly referred to as a side hustle…has been the path a lot of people have opted to take this year.
Data from the Australian Bureau of Statistics revealed that approximately 6.5% of working Australians have a second job, almost 900,000 people. When considering the figures, Millennials and Zoomers make up a large portion of those who have sourced avenues to make additional income. 33% of Millennials and 43% of Zoomers reported having a full or part time job in addition to their primary source of income.
While we know that having a side hustle isn’t always as simple as moving somewhere exotic and capturing your every move on your socials like Emily in Paris (thanks Netflix!), here are some of our tips to help you decide if a side hustle is the right move for you!
Arguably, the best part of taking on extra work is without a doubt that feeling when your phone buzzes to let you know that you’ve been paid. But when it comes to the business of side hustles, it could simply be the joy of learning a new skill, meeting new people, or having an opportunity to work on a passion project! If you make bank doing it, then it makes the hustle even sweeter. The post COVID era (and maybe a little Marie Kondo influence) encouraged a number of Australians to take up a new hobby or skill purely for enjoyment, which has even seen a boost in enrolments for short courses.
When you start up a side hustle, it’s a good idea to determine what route you want to take…will you sell your stuff? Or sell your skills? If you opt to sell your skills or take on a second job, it’s important to keep these 3 things in mind:
It’s important to make sure you check your current employment agreement of your first job, or wherever you earn your primary source of income. If your current employment agreement specifies any on call hours or restrictions regarding taking on additional work…it might be best to avoid playing with fire. Besides…we still need to make those rent or mortgage repayments (the rock sounded appealing when we were thinking about interest rates…but we just don’t think we’d make it).
IIn some instances of taking on additional work, you may or may not need an ABN depending on whether you are a contractor or an employee. Your side hustle could mean that you are considered an employee, and your employer should cover your tax payments. However, in some instances where you may be gigging or freelancing, make sure you check the fine print and terms and conditions of who you are engaging with to double check if you need to register an ABN with the company.
There’s been a number of side hustles that have proven to be quite lucrative where individuals have left their primary jobs to pursue their side business on a full-time basis. Whether that’s your end goal, or you enjoy having a bit on the side for a rainy day…it’s imperative that you keep an eye on your earnings and your tax bracket.
If you’re absolutely smashing it with your hustle and (in the words of our gal Miley) ‘we can’t stop’ from exceeding that bracket, then amazing! But if you’re dancing on the edge, make sure you’re taking it easy and don’t end up financially worse off by owing a big bill when tax time rolls around.
Although the extra income (especially around Christmas time in this climate) can be very tempting, there may be some things to consider if the extra work is having an affect on your primary job or wellbeing. Even though Kim Kardashian seems to think we should all ‘get off our 🍑’s and work’ (ok, so we paraphrased a little), it’s important to make sure you have time to realign your goals and relax from time to time.
If you’re the type of person who takes the opportunity to catch up on work out of hours, you may opt to grab an easy dinner or skip the gym so you aren’t as time poor. The same goes for side hustles. It’s important to regularly check in with your account transactions to see where you may be spending unnecessary money to supplement the time spent dedicated to your hustle. Eg. Takeaways and paying for a gym membership you never have time to use are good places to start.
If you have a highly demanding and stressful job, perhaps a side hustle may be your creative outlet or the time you take to unwind from the pressures of daily life. Where this becomes an issue could be when your side hustle starts demanding more and more of your time and begins to distract from your primary employment. This could potentially also lead to feelings of guilt and a backlog of work from your full-time role…and doesn’t that just sound all too stressful?
As the saying goes ‘what good is having all this money if you can’t enjoy it?’ Whether you’re undertaking your side hustle to combat boredom, top up your account or if you’re saving for something big…make sure to take time to treat yourself. Another thing to be aware of is that you aren’t working yourself silly and tiring yourself out. A side hustle should mean that you are able to make a little extra without sacrificing your happiness or wellbeing.
With all that in mind, there’s a lot to consider before and during your time as you hustle. Whilst side hustles may not be the right move for you right now, there’s always a good case for doing and learning something that makes you happy. At the end of the day, who knows? Maybe you’ll turn your passion into your career.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
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