How to Put a Price on a Side Gig

Given that 7.6 million Americans hold down more than one job, there are surely hundreds of reasons people choose to work a side gig. Side jobs can be a way to develop your professional network, immerse yourself in something you love doing, or keep your creative juices flowing. Maybe you’re developing a new skill to further your career. Or maybe you just want to pocket some extra cash.
 
No matter the reason, it takes time and effort to keep a side business going, and you may be wondering whether moonlighting is actually worth it. Here are some ways to help you answer that question.
 
When to keep the gig:
 
•    It’s something you love
If your side gig is what you look forward to when you wake up in the morning, that’s a good indication that it’s worth your while. Maybe your part-time work as a pet sitter gives you joy and makes your life feel meaningful, even though the paycheck doesn’t amount to much.

•    You’re developing valuable skills
Doing work on the side can be a way to broaden your skill set. Maybe your freelance work as a programmer will foster skills that can get you a promotion, or your side business designing websites will make it easier for you to switch careers in a year or two. If your side gig is helping you acquire new capabilities that you wouldn’t otherwise have in your daily work, it could pay off down the line. (And if it is already paying off, in terms of cash in your pocket? Consider stashing the money you earn in a high yield savings account, where it can work toward your goals and be readily accessible if you need it.)

•    It fits into your future plans
Sometimes a side gig isn’t motivated by what it does for you in the present; it’s useful because of its future potential. If a side gig is helping you get to where you want to be eventually, it might be worth the time and effort you invest. This is particularly true if you’re considering a career change. Taking on part-time work in a new industry can help ease the transition between your current role and your future aspirations. Ask yourself where you want to be a few years down the road. Will your side gig help get you there?
 
When to ditch (or rethink) it:
 
•    It’s putting you in the red
Some part-time jobs can be costlier than they seem on the surface. You may have to invest in inventory or supplies or pay rent on a studio space. You may need to expense your own travel or pay to entertain clients. Even if your side gig turns a profit, you may be putting in so many hours that it’s not worth your time. One way to put things into perspective is to calculate how much you’re making per hour. If you don’t have an hourly rate, start scrupulously tracking the time you put into each project so you can figure out your earnings. Does the job still seem worth it?

•    It’s consuming more energy than it gives
If you’re only thinking of your side gig in terms of how much money it nets you, you’re leaving out an important part of the equation. Ask yourself whether it’s taking away from valuable time spent with your family or friends, detracting from your performance at your main job or keeping you from other pursuits. If you—or your relationships—are suffering because of your side gig, it might be time to let it go.

•    It needs a major overhaul
Sometimes it’s not a matter of ditching your side gig, but rather changing it. If your one-on-one art classes aren’t making money, maybe you can start teaching groups to boost your hourly rate. Maybe you can stop renting space and work out of your home. Or maybe you only want to take gigs with completely flexible schedules, so you never miss time with your kids.  

A part-time business can be a great way to take steps forward in your life. Just make sure you have a way out if the side hustle turns out to be a huge hassle.

Michaela Cavallaro funded the down payment on her first home with income from a side gig. Today, she writes about money and investing from her home in Portland, Maine.