226: Taking Control of Your Money (Side Hustle to Main Hustle Pt. 2)
Turning Your Side Hustle into Your Main Hustle
Last week, we kicked off this 3-Part Side Hustle to Main Hustle Series.
Part 1 (episode 225) was all about investing in your personal development foundation by:
Rewiring your mind to win.
Making bold decisions.
Motivating yourself to take action.
I highly recommend you stop listening now and go listen to that first, as it’s all designed to flow in order!
Parts 2 and 3 are about getting your money right!
When you become a master of your money, the game begins to change:
Your relationships with money and loved ones drastically improve.
Your peace of mind and confidence soars.
You set yourself up to take more risks (full-time leap anyone?).
You create a path for financial freedom and generational wealth.
You’re able to invest generously in others and causes you believe in.
Here’s a quick 5 step system for getting your money right:
Set up your budget.
Spend less than you make.
Get out of debt.
Save up a rainy day fund.
Invest in wealth-generating assets.
Today, we will focus on steps 1–3 and specifically on getting started with budgeting, spending, and getting out of debt.
(We’ll tackle 4 and 5, saving and investing, in Pt. 3!)
These areas will radically impact your side hustle pursuits and your dreams of taking shit full-time one day, like they’ve done for my own career.
My goal with this is to help you get control of your money and use it as a tool to create your future side hustle freedom.
But first, let’s talk a little bit about people’s poor relationship with money and the stress it burdens us with.
Money Struggles
Lemme hit you with a few statistics from an Ally Bank Survey and a 2019 Financial Employee Wellness Survey-PwC.
These surveys found that:
Money problems are the #1 cause for divorce.
65% of women and 52% of men said that financial matters cause them the most stress.
35% of employees report that issues with personal finances have been a distraction at work.
49% of those who are distracted by their finances at work say that they spend 3+ hours at work each week thinking about or dealing with issues related to their personal finances.
To recap, basically the majority of people I know listening to this podcast stress out about money…
To the point is it affects their mental health, relationships, and performance at their job.
I also know the majority of listeners to this podcast are probably buried in student loan debt and are trying to side hustle themselves out of a hole.
Trust me, I’ve been there. Like most of you, I don't come from money and have always had a poor relationship with it until recently!
I graduated from a private school called Wartburg College back in 2010.
I was buried in about $80k worth of student loans to get my Fine Art + Design Degree.
I was then tossed into a recovering market where not many design related jobs were available.
Me and my wife’s typical fights and stress all stemmed from our lack of money…
Which is what our parents biggest feuds were fueled by as well.
When digging deeper to the root of the problem, I realized the epicenter of everything came from the lack of financial literacy we’re intentionally not taught growing up.
The Lack of Financial Literacy
We live in a society where going into consumer debt, financing everything, and living outside our means is normalized, encouraged, and rewarded.
Being taught to be financially literate and understand how money works is bad business for those in power.
Banks, the Federal Reserve, corporations, credit card companies, and big institutions can’t profit off those who have their money straight and know how to play the game.
Employees, and the middle class in general, are taxed the most and are also marketed to go into debt the most.
We’re literally trained to become slaves to our money masters, and the system is rigged..
We willingly get trapped under a mountain of debt that ends up feeling impossible to pay back.
You’re taught to go into the hole for a college education in hopes of landing a job to repay that debt. You’re taught to grind ‘till retirement as an employee.
Simultaneously, you’re influenced daily to go into debt for a mortgage, financing furnishings for your home, leasing a car, and swiping that credit card for clothes, food, entertainment, and vacations.
Note: My beef is strictly with consumer-based debt. Getting a mortgage or investing necessary cheddar to jump start your business I’m cool with...BUT only if your spending behavior is in check.
We’re taught to believe that we can have everything we want NOW without having to pay for it until later…
It’s time to get fed the fuck up, break the cycle, and ditch your money masters.
Your side hustle dreams, relationships, and quality of life depend on it.
Here’s my quick story of getting out of debt and steps we took to make it happen...
Eliminating Debt Will Change You
I promise, eliminating your debt will change you...
At the start of 2019, we were sitting on over $100k worth of consumer debt (credit cards, healthcare balances, financed items, student loans, etc.).
In July 2019, Emily and I had a huge fight all stemming from our lack of money.
I was bringing in good side hustle income at that time (around $20-30k) while making $50-60k at my day job before and after my last raise.
However, we were still living paycheck to paycheck and clueless where our hard earned cheddar was going.
That’s when I had my “fed up” moment and took the first steps toward taking control of our money.
I started by listening to Dave Ramsey’s “Total Money Makeover” easily four times and then made Wifey listen to it…
Then I took big action on his 7 Baby Steps:
Save $1,000 for a starter emergency fund. (Personally, I feel $2,000–3,000 is more realistic.)
Pay off all debt using the debt snowball method.
Save three to six months of expenses in a full emergency fund.
Invest 15% of your income toward your retirement.
Start saving for your children’s college fund.
Pay off your mortgage.
Build wealth and give money to charity.
Note: Dave’s way isn’t the only way. I ended up Frankensteining a lot of things I learned from other credible sources and applied it to what worked best for our situation.
We started with Baby Step #1 (saving up a $1,000 emergency fund), then proceeded to Baby Step #2.
We depleted the rest of our laughable savings and threw every extra dollar earned toward attacking our debt via the “Snowball Method” in which I break down later.
Fast forward 1.5 years to September 11th, 2020, at 9:30am…
And that’s the day I paid off the last of our consumer debt after—again—starting January 2019 with $100k+.
(We still have our mortgage, but that’s it.)
Here’s how getting out of debt changed me...
I sleep better at night because I’m not stressed out.
It allowed me to take bigger risks like going full-time.
I can say NO versus saying YES based on fear and scarcity mindset.
I’m able to invest in myself and my family’s financial future.
I can invest in others and make a bigger impact.
I’m overall happier and more confident.
Here’s the ONE important thing that radically shifted my mindset about getting out of debt:
You DON’T always need to make more money...
The game changes when you realize every debt you pay off…
GIVES YOU A RAISE AND INCREASES YOUR INCOME.
5 Steps for Getting Out of Debt
Getting out of a debt requires an assassin-like mindset.
You and whoever you’re attacking this with HAVE to be on the same page.
No one else’s opinion matters, so put up your blinders and get tunnel vision.
Here’s a quick list of things Wifey and I did to accelerate our debt payoff goals:
1. List out all debts
We first started a Google Sheets document (we called it our Freedom Plan).
One tab was dedicated toward listing every debt we had along with monthly amount due, interest rates, etc. that we could easily reference, update, and filter information.
We also had a column for ambitious target payoff dates that gamified this journey.
Because I’m a visual dude, I also designed a “Debt Payoff Chart.”
Every time we hit a milestone, we’d color in a row that showed our measurable progress toward hitting the goal.
We started with Dave Ramsey’s “Snowball Method” where you:
Prioritize your debts by the smallest to largest balance owed (not interest rate based).
Pay minimum payments on all other balances…
Stop contributing to your investments (401k, Roth, etc.) to free up all income.
Then savagely attack the first, smallest debt.
You then “snowball” that previous payment into the second debt on your list.
You continue this method as your “snowball” begins to grow.
This route is great to start with as it gets you easy wins, builds momentum, and trains better behavior/habits.
Note: I personally kept my 401k contributions going and got the full match from my employer as I didn’t want to leave free compounding cheddar on the table.
There’s also the “Avalanche Method” where you:
Prioritize debts based on highest to lowest interest rates first.
Save you the most money in the long run.
Don’t take into consideration the size of your balances.
We started with Dave’s method and found great success. But as I started making bigger chunks of money and got our spending behavior in check, I switched to this method.
2. List out all expenses
In the same Google Sheets doc, we created a tab that listed all monthly expenses, due dates, amount due, etc.
This gave us a high-level view of where our money was going and let us know how much we needed to bring in to cover everything.
I’m a big advocate for separating life and business expenses.
That’s why I created 2 Expense Lists to reference:
Main living expenses (mortgage, food, gas, etc.)
Side hustle expenses (Adobe, hosting, cloud storage, etc.)
3. Kill subscriptions and dumb spending
Having all expenses listed out helped us pinpoint certain services we didn’t need or could downsize…
For example, we saved money by:
Killing Hulu and FreshBooks subscriptions (remember, Wave Apps is free).
Downsizing our trash can.
Returning our recycling can (there was a recycle station up the street).
Splitting Spotify with family.
Meal prepping versus going out to eat.
Eliminating stupid spending by NOT buying useless “wants” that weren’t “needs.”
4. Setup a budget
Constraints breed creativity in both your side hustle and life.
Having a budget provides constraints that allow you to control where your money goes.
Budgeting doesn’t sound fun, but it’s crucial if you’re trying to get out of debt.
It forces you to live within your means and puts your spending behaviors/habits in check.
Emily loves using Every Dollar App (the free version) to track expenses and misc. spending on entertainment, clothes, investing, etc.
Note: Having a budget and your list of expenses is going to come in clutch when we talk about saving and investing in Pt. 3.
5. We hustled
Finally, Wifey and I got on our grind…
We sold so much stuff on Facebook Marketplace and have easily made probably $10k to date.
She also started making and slanging Elderberry Syrup and holistic based-balms, rollers, etc. with her monstrous Essential Oils stash.
We literally took all the extra money we could and threw it at the current debt we were focused on.
Note: I made a killer episode last year with 30+ Ways to Make Side Hustle Money. It’s also loaded with Smart Money Moves to compound what you’re learning today!
Rebuttal About Investing > Paying Off Debt
There will be some people out there who say it’s better to collect debt and pay the minimums on everything.
They believe, instead, to put all your extra money into investing in wealth-generating assets like we’ll talk about in Pt. 3.
Their mindset is centered around getting a way higher return on your investments like stock market and crypto (Generating returns of 8–100x).
These investments will far outpace inflation and minimum monthly expenses like a mortgage, vehicle, and student loans that have fixed interest rates of 2–4%.
Technically, they are right. But the majority of people’s spending behaviors and habits aren’t disciplined enough to handle this bold lifestyle…
Most people spend with zero thought toward investing into their financial freedom.
If your relationship with money sucks, don’t even consider this route and get your ass out of debt with a budget first.
Overwhelming But Rewarding
Getting out of debt is straight up overwhelming and stressful.
It’s far easier to be ignorant and continue to dig yourself a deeper whole like the majority of people with poor financial literacy.
But, since you’re a listener of this show, I know you’re not about taking the easy path.
Getting out of debt will help you make the full-time leap sooner AND put you in a position to attain time and financial freedom!
No one is going to fix your poor relationship with money for you.
I promise you, gaining control of your money and getting out of debt will transform you.
Everything about you, your confidence, your creativity, and your quality of life will improve.
You owe it to yourself to break away from your slave masters and create the future you want to make some noise in.
Get your money right, and big things will start to happen.
What’s Next After Getting Out of Debt?
You may be asking, “What’s next after getting out of debt?”
What good is being out of debt if you don’t know how to put your army of dollar bills (euros, yens, etc.) to work for you?
That’s why we’re ending this 3-part series next week by breaking down the next steps of saving and investing to attain financial freedom.
Keep an open mind and remember this shit is important. Staying ignorant and disinterested (like I was for years) in your financial future is going to make it extremely hard to get to where you want to be in life!
Your biggest regret—like mine—will be wishing you would’ve jumped on this financial literacy train sooner.
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