Organizing Your Side Hustle Finances in 2019

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Madelin Woods – January 1, 2019


Post personal finances

tldr; Track your expenses, set up some (realistic!) goals, feel confident that you can answer the questions you need to make big important life decisions, and live your best creative life.


I’ve been going through my personal & business finances this week (an actual joy that I indulge in every year— piles of spreadsheets! See my cool hat below.) and thinking about the goals our customers have set for themselves in 2019. I am not a certified financial planner, but I do have a trick or two up my sleeve. Finding a financial planner can be transformational, but remember: you are in control, and nobody will care about your finances as much as you do. Starting with these steps help you get started, so you can set your creative & business goals for 2019 with confidence.

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1. Start tracking your expenses. 💸

ALL of your expenses. This is often the first thing a financial planner will do with you. It can take many hours, so it’s most cost-effective to do this on your own time. I don’t really like most online tools, and prefer the flexibility & control that spreadsheets give you. That said, downloading CSVs from your banks every year is painful (though I have been doing this manually for years).

This year, I started using Tiller, which automates the downloading CSV part. When you’re first starting out, you only get the last 3 months of bank data, so you will need to grab those CSVs one last time. But moving forward, Tiller will import your transactions automatically for you. I’ve also heard good things about YNAB. I personally feel more in control with basic spreadsheets. Whether you use Tiller or not, it’s essentially the same process:

  • I started with Tiller’s basic “Monthly Budget” template. You can also use a blank spreadsheet.
  • Download all of your bank & credit card CSVs from 2018 (1/1/18-12/31/18).
  • Sanitize your data. Make sure all the headers match up (Date, Description, Category, Amount), and the amounts are appropriately negative/positive.
  • Import your transactions.
  • The imports from your bank aren’t always perfect, find & delete any duplicate entries.
  • Define your categories (these may be different depending on if you’re full-time, freelance,
  • small business, etc.)
  • Set up Tiller’s AutoCat tool (this is a HUGE timesaver!).
  • Start organizing and categorizing everything (The hairiest, but the most important step here).

2. Set your goals and make some graphs. 📈

Using the data you just so neatly categorized, you now have a complete snapshot of how you accurately spend your money. You can use this data to: build a realistic budget, define your 2019 goals (ie. spend less money on Uber, and more time on creative hobbies), look at your monthly P&Ls, summarize your tax deductions, start planning for next year based on your goals & spending.

There are a few spreadsheets you’ll want to have set up for every year (and in parentheses, which sheet to look at on Tiller):

  • Net Worth (Balances): How much do you have in the bank right now, and how much do you owe in credit cards, student loans, etc.
  • Yearly Category Spend (Yearly Insights, sort by “Total”): What are your top spending categories? Do they align with your goals? Are you surprised by anything? Where do you need to dive deeper? What can you cut down on? How much did you make & spend this year?
  • Monthly Category Spend or P&Ls (Budget Filter, sort by “Actual”): How much did you spend by category every month? What was that huge expense in July? Am I really spending that much on eating out and plane tickets? Do you need to recategorize anything, or do a deep dive to understand your expenses?
  • Transactions: Your entire transaction history log. Play around sorting by category, by description, by amount, and by date. Does everything look right? Do you have any subscriptions you can cancel? How much are you actually eating out, spending on Amazon, etc? Did any of your expenses surprisingly increase?
  • Projections: You can set this up in a separate sheet. If you want to track side hustle or freelance income, make a basic monthly break down of how much you might reasonably expect to make every month for the rest of the year.
  • Cash Flow: I use this sheet almost like a sketch pad. If things get tight, it can be helpful to lay out exactly how much you have in the bank, when your various expenses/bills are due, and when you can expect your incoming checks to land. Need to pick up a few extra hours of work? Need to wait a couple days to Square Cash your friend for brunch? This will help you figure that out.

If you’re running a business (freelance, ecommerce, Airbnb, etc), it’s a good idea to get a separate credit card and/or bank account. This will help you group your income & expenses and more easily separate your personal and business expenses for taxes & budgeting. You can set up additional P&L sheets for each of your businesses.

3. Insights: The bottom line. 🧐

I look at my finance spreadsheets at least quarterly, if not monthly, throughout the year. This is helpful if you have freelance income and need to start paying quarterly taxes, if you’re making large financial decisions, or if you generally want more control over your spending. Either way, you’ll likely need to reference these sheets when doing your taxes.

Tax deductions

Your accountant (or yourself) will need to know:

  • How much did you make this year?
  • How much of that did you already pay tax on? (W2s vs 1099s)
  • For the income that you haven’t paid tax on, what expenses can you deduct? (This is where categorization is helpful)
  • How much tax will you need to pay this year?
  • Did you start a new business, and have a high tax bill? Go through your expenses, what else can you deduct?
Budgeting
  • Based on how much you earned & spent last year, what’s your “actual” budget?
  • What does your monthly budget mean on a daily or weekly timeline?
  • How much are you setting aside for savings? Retirement? Emergency funds?
  • Start setting some goals, and realign your schedule to account for this.

For example, last year I noticed I spent way too much eating out. I made myself a meal plan and started grocery shopping every week. This year, I’m happily surprised to find out I cut my eating out spending by 70%!

By setting up these simple budgets and financial processes, you’ll have more control over your time and money. Work with a project coach in 2019 to get organized & stay accountable to your creative goals. Visit hellowalden.com to get started.