I Exceeded My $5K Goal: Unlocking extra income
I Exceeded My $5K Goal: Unlocking extra income
Making an extra $5K in a year seemed daunting initially, but breaking it down into smaller, more manageable goals made it less intimidating.
Highlights
Use your strengths: Turn your skills, like writing or tutoring, into extra cash.
Start easy: Join freelance platforms, work in your spare time, and watch your income grow.
Stay focused: Plan smart, track progress, and hit your $5K goal with ease!
The Spark
It was the beginning of a new year, and like many, I found myself reflecting on my finances. Despite a stable income, the thought of earning just a little more kept nagging me. I wasn't alone in this. Many dream of a vacation without dipping into savings, replacing their old car with a newer model, or simply building a buffer for unexpected expenses. An extra $5,000 a year—$400 a month—felt like a goal that could make those dreams tangible without overhauling my life. The question was, how?
Exploring Options
I started by assessing my skills and interests. I've always had a knack for writing, and with years of experience, I knew I could turn this into a side income. But I didn't want to limit myself. I researched other options, digging into forums, reading blogs, and watching YouTube videos of people who had successfully built side hustles. I discovered that many people were leveraging skills they already had—graphic design, tutoring, digital marketing, and even crafting.
The options were clear: on the one hand, I could actively invest my time in a new activity or side hustle to generate money. On the other hand, I could take advantage of some savings I had to start earning some return to supplement my daily income. Generally speaking, we can talk about active income, i.e., income generated from time-consuming tasks related to your job or career, and passive income, i.e., income that you can earn with relatively little effort, such as renting a property or earning money from a business without much active involvement.
Three options stood out to me:
Freelance Writing: Writing is something I enjoy and do well, so it felt like a natural choice.
Tutoring: I had a strong background in English and could help high school students with their essays and assignments.
Graphic and 3D design: Since college, I have learned to use software tools for this sort of project, so why not turn it into a small online business?
After weighing the pros and cons of each, I decided to focus on freelance writing. Some major points for this decision are that it could be done in my spare time and had zero start-up costs. It also does not require a lot of online meetings, which helps me organize my time with my daily work. Plus, it played to my strengths.
How to Start
The first step was to establish an online presence. For writing, I registered on popular freelance platforms like Upwork and Fiverr. I knew that getting my first client would be the most challenging part, so I crafted a compelling profile, showcased some previous projects, and offered a few services at a lower rate to build a portfolio.
To expand my reach, I utilized social media. I created a LinkedIn profile highlighting my skills and started contacting potential customers. It was a slow start, but I got my first gig with consistent effort. After a couple of months, the ball started rolling, and it got to the point where I hardly needed to spend any time on self-promotion anymore.
Passive income
On the other hand, I also decided to organize my finances and take advantage of some savings from the last few years. Let's use numerical examples to shed some light on this topic. A savings account yields about 5% APY in the USA, while treasury bonds average 6%. The S&P yielded 7.5% per annum on average over the last 50 years when adjusted for inflation. If instead of keeping your money under the mattress, you invest it in some of these options, $30,000 in the S&P can turn into an extra $2,250 a year and help you reach your $5K goal.
Financial Planning and Goals
Making an extra $5K in a year seemed daunting initially, but breaking it down into smaller, more manageable goals made it less intimidating. I set a monthly income target of around $400. $400 a month, assuming a rate of $15 an hour, is 27 hours a month. Working an extra hour a day from home every day makes it possible to reach this target without any problems. And if your skills allow you to negotiate a higher rate, the time you spend on your side hustle is considerably reduced. It all depends on your skill level and experience in the area of interest.
I recommend planning your time around your regular work or study, dedicating evenings and weekends to side projects. Managing side hustles requires planning so that tasks and deadlines don't snowball. To stay on track, I used a simple spreadsheet to monitor my income and expenses related to my side businesses and a productivity app like Trello to keep my to-do list in check. This helped me stay organized and motivated me to push harder when I saw the numbers adding up.
The Journey's End
One year and a half after starting this journey, I not only hit my $5K goal but also exceeded it slightly. Along the way, I faced challenges—some months were slower than others, and there were times when balancing everything felt overwhelming. But the key was persistence and being open to learning and adapting.
If you're considering a similar journey, I advise starting with what you know and enjoy. Research your options, set clear goals, and take consistent, small steps toward them. You don't have to quit your day job or completely change your lifestyle; you just need a few tweaks here and there. With dedication and intelligent planning, you can find that extra $5K hiding in the skills you already possess. And who knows? You might even discover a passion that could grow into something bigger than you ever imagined.
