Is That Side Hustle Really Worth It? Here's How to Calculate the ROI of Your Time

Is Your Side Hustle Paying Off? Let’s Break It Down

We all know someone who's always hustling. You might have a friend who drives for Uber during the day, runs an Etsy shop at night, or flips sneakers on the weekends. And sure, side hustles are a fantastic way to boost your income. But before you dive head-first into the grind, let’s hit the brakes for a second…

Is That Side Hustle Actually Worth Your Time?

Have you ever stopped to wonder if your side gig is truly beneficial or just draining you for little reward? If you’re clocking in hours only to see pennies, it might be time to run the numbers. I promise it’s easier than it sounds!

Understanding ROI: Return on Investment Made Simple

When we talk about ROI, we often think of the money we’ve invested, right? But let’s flip the script for a moment. In the realm of side hustles, your most precious investment is your time.

The primary goal? Figure out how much money you’re actually earning per hour. Let’s break that down into a few manageable steps.

Step 1: Track All Your Time Honestly

It's crucial to account for every single minute you spend—not just the main task at hand. Here’s a checklist for things to consider:

• Commutes: Both ways!
• Prep Time: What goes into getting your hustle started?
• Customer Support: Answering queries and emails.
• Marketing: Posting to social media or advertising.
• Packaging and Shipping: If you’re selling physical products, this adds up too.

Example: If you drive for DoorDash, your workday doesn’t start the moment you pick up that yummy burrito. It kicks off when you leave your home, and it wraps up when you finally park your car after the last delivery.

Step 2: Tally Up Your Costs

Now it’s time to consider those out-of-pocket expenses. It’s easy to overlook these, but trust me—they can eat away at your profits more than you realize.

• Gas and Wear: Costs associated with your car or bike.
• Supplies: Materials for whatever you’re selling or doing.
• Platform Fees: Don’t forget about service charges for apps.
• Promotional Costs: Any money spent on advertising.

Don’t let these costs surprise you at the end of the month!

Step 3: Do the Math (It's Easier Than You Think)

Ready for the formula? Brace yourself—it’s not as scary as it sounds! Just take your net income and divide it by the total hours worked.

Here’s an example:

Let’s say you made $300 last weekend selling handmade candles. But first, count the time and costs:

• Total Hours: 15 hours (from making to marketing to delivering)
• Costs: $75 spent on supplies and delivery gas

Now, here’s the breakdown:

• $300 - $75 = $225 (that’s your net income)
• $225 ÷ 15 hours = $15/hour

That’s alright—certainly better than nothing! But if you can freelance for $30/hour, it might have been better to skip the candles and dive into that instead.

Step 4: The Big Question—Is It Worth It?

Now that you have a clearer idea of your real hourly rate, it’s time for some tough questions:

• Do I even enjoy this hustle, even if it’s not paying what I hoped?
• Is it helping me build new skills, a brand, or future opportunities?
• Should I be investing my time in a higher-paying gig or perhaps a course that could lead to more lucrative opportunities?

Remember, it’s not always about immediate cash. Some hustles can pay off in the long run. Others might just lift your spirits on a tough day. But knowing the numbers empowers you to choose wisely.

Bonus Tip: Test New Hustles for 30 Days

Before diving into a new gig, why not give it a month-long test drive? Track your time, earnings, and your feelings about the work. Evaluate at the end of the month if it’s worth your continued investment.

A Real-Life Example

Let me share my personal experience. I once thought flipping vintage furniture would be a goldmine. I got excited about the art of restoration and thought I’d make big bucks. But after tallying my time spent driving to pick up furniture, refinishing it, and communicating with buyers, it worked out to maybe $8/hour.

Sure, it was fun! I got to flex my creative side. But was it worth it financially? Not really. I quickly pivoted to freelance writing on Fiverr, using the same time but earning double the pay. That’s when I started noticing a significant uptick in my income.

The Bottom Line: Value Your Time

Your time is your most invaluable asset. Before you dive into a side hustle, make sure the numbers are in your favor—or at least that the work brings you joy or valuable future opportunities.

Hustle smart, not just hard.

And if you need help comparing various side hustle ideas or tracking your earnings, stay tuned! FinanceCesar.com will be rolling out tools and guides to make your hustle journey smoother.

Disclaimer:
This content is for informational purposes only and should not be considered financial or investment advice. Always do your own research or consult with a licensed financial advisor before making any investment decisions.