Side Gigs: How To Make Money From A Hobby : Life Kit Making money from a hobby takes a lot of work — and strategy. In this episode, host Ruth Tam gets some advice from independent business owners and financial experts about how to make it work.
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Side Gigs Are Demanding. Here's How To Make One Work

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Side Gigs Are Demanding. Here's How To Make One Work

Side Gigs Are Demanding. Here's How To Make One Work

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


This is NPR's LIFE KIT, and I'm Ruth Tam.


TAM: Having a hobby or skill outside your day job can feel like having a hidden superpower. Maybe you dabble in woodworking, play the ukulele or are really good at giving haircuts. But what if you want to share your superpower with others and make a little money off of it?


TAM: How do you take your hobby and turn it into a bona fide side gig? I want to introduce you to someone who's done just that - Ty Johnson. She's a working professional with an alter ego.

TY JOHNSON: I am a lawyer by day. I work for a hotel company. And my side business is - well, I call myself TheDIYAuntie.

TAM: As TheDIYAuntie, Ty hand sews fabric toys for kids.

JOHNSON: I have an Etsy business where I sell handmade alphabet sets, I sell number sets, and I sell name sets where you can get a child's name spelled out, all of which are meant to aid in a child's early learning development.

TAM: Sewing and crafting has always been Ty's favorite way to unwind and de-stress. But after she made an alphabet set for her baby niece, family members were like, hey, this is amazing; you should sell these. And she was like, that's not a bad idea.

JOHNSON: As someone who went through college and then law school, I have student loan debt coming out my ears. And so this is literally the dream - taking something you love - a hobby - and turning it into something that can make you a little bit of money so that I can do things like pay down my student loans or even if I wanted to, you know, go on a trip.

TAM: It sounds great, right? Ty loves crafting. She gets to be her own boss. She sets her own hours and pays herself whatever she likes. What's not to love? The flip side of that dream - working for yourself is still work. In this episode, we're talking about side gigs. Now, starting a side gig requires business, organizational and marketing skills, the ability to meet deadlines and handle your work-life balance and a lot more.

Trust me. I'm a journalist and an artist, and I'm learning this stuff too because, for me, it doesn't all come naturally. That doesn't mean that starting a side gig can't also be fulfilling, fun and hopefully profitable. We'll meet creatives and personal finance experts who will tell you what you need to know about turning a hobby into a small business.


TAM: The first takeaway to starting a side gig is to be honest about why you want to do this in the first place and how much effort it's going to take. Take it from me. I'm a journalist, but when I decided to start selling illustrations on the side, I had to ask myself, why? Do I want to be able to pay off a bill from the money I make? Do I want to break into a new field and have a portfolio of work to show? Or is this all for fun and to get better at something that I love doing?

There is no right or wrong answer, but mulling this over will help you figure out if starting a side gig is worth it for you. Asking yourself why will help you define success on your own terms. It's also going to help you create healthy boundaries in your life because guess what? Working for yourself is probably going to cost you a lot of time and money, especially when you first start out. So here's Ty, lawyer by day and DIYAuntie by night.

JOHNSON: Moments when I usually would - after I log off from work, would be sitting here watching TV, I'm sitting here watching TV and sewing. I'm sitting here watching TV and cutting. So you have to steal the hours from comfort.


TAM: Having a side gig can sound like living the dream, but it doesn't always feel that way. Our friends at Code Switch wrote a great piece about the ugly culture associated with a side hustle and how a gig can quickly turn into a grind. You can find a link to it on our website.


TAM: But this episode is not about working yourself to death to keep up with the capitalist machine. It's about providing tips to treat yourself fairly if you do decide to work for yourself. So that said, after you ask yourself why and factor in how having a side gig will shake up your schedule, it's time for takeaway No. 2. Research your market.

When Ty was just sewing for fun, her niece was her only client. But now she had to market her toys to everyone, and it wasn't enough to just put her alphabet and number sets on Etsy and hope for the best. Ty needed to get a sense for how her products went from her hands to her customers'.

JOHNSON: As a buyer of Etsy, you can go in and search for anything, and something will pop up. And so for me, I started searching for exactly what I wanted to put out there to kind of see what people were doing already and how people were doing it. And so I spent a lot of time reading through people's shops. Like, how did they describe what they were doing? And also, what was their, like, production timeline? Like, if you ordered something, how long would it take them to get it out to you? You know, kind of taking note of all of these things and what kind of things that they post on Instagram - how did they post on Instagram? What did they describe their products as?

TAM: Like a lot of people, Ty was already on Instagram, but figuring out how to represent her business there was enough of a stretch that she decided to study up.

JOHNSON: There was a webinar about starting a business and also, you know, having a social media presence. And I remember one of the first things that they said in the webinar was, don't worry so much about having the perfect post and kind of having everything perfect from day one. And I think I internalized that.

TAM: Now, Ty's been working at this side gig for less than a year. She's still in the early stages of her business where she's trying out new things and still experimenting. We wanted to know what lessons you pick up if you've been at this for a little longer, so we talked to Lindsay Adams. From 9 to 5, Lindsay's a marketing and communications strategist, but she's also been a freelance fine artist for years. It's her 5 to 9, as she likes to call it. Lindsay also lives with cerebral palsy and is a disability advocate.

LINDSAY ADAMS: I've been kind of drawing and painting most of my life. I had never really thought of doing it full time, you know, but I knew that it was very much a big part of my life and a way for me to express, like, all the nuances that make Lindsay Lindsay, whether that be my challenges with cerebral palsy or, you know, being a Black woman. It's always been my way of kind of giving back to myself but also sharing of myself with others.

TAM: For Lindsay, working as a fine artist was less about making a little side money and more of a conscious decision to grow the part of her that's an artist.

ADAMS: I needed to find a way to really kind of tap into this creativity that I've had my whole life so I'm just not drowning in the corporate space.


TAM: When you're just starting to make money off a hobby, you have to be all things at once. You're the product manager, the research and development department, the marketing associate, the communications director. You handle quality control, shipping and handling, customer service. But Lindsay says that when you've been working on a side hustle for a while and know what your strengths and weaknesses are as an entrepreneur, you don't have to do it all.

ADAMS: If you have the means, it's OK to outsource. You know, there are people who are masters at you know, who do it full time. They live and breathe it. If you're creating the copy for your website, like, someone else might be able to write about your work and market it in a way that you don't necessarily see because you're so close to the product.

TAM: As she progressed as an artist, Lindsay identified that she needed an assistant to keep up with email, so she hired one. This may not be the move for someone who's just starting out, but it's nice to know that if things become busy enough, you may not have to do it all yourself. The part that's hard for both Lindsay and Ty - pricing products and managing money. I asked Lindsay about this, and even though she's been creating and selling fine art for years, she assures me it's still tricky.

ADAMS: Pricing is - if it's not harder than the technical skill of - you know, of art, it is right up there at a close second.

TAM: Her advice - don't get intimidated.

ADAMS: You have to price it in a way that you take yourself and your time seriously. That way, others will as well. If you're spending 15 or 20 hours on a project, how much do you kind of want to take home? And then looking at cost of material, you know, cost of having to have your website, cost of marketing and then time.

TAM: Of course, pricing your time fairly is going to vary depending on what you're doing with your time. For Ty, it was easy to price for materials because she bought them herself, but pricing her time was a different story.

JOHNSON: My side hustle is very manual labor intensive. I'm creating something with my hands. And I think figuring out the cost of my labor and how much I would need to charge in order to, I guess, appropriately compensate myself for that labor is so much more difficult. I have people on one side - they're saying, you know, you're charging too much - people on the other side saying, you're charging too little. So, you know, I kind of had to be my own financial adviser and accountant in that regard to kind of figure out, OK, how do I strike the balance of, you know, appropriately compensating myself but also charging people a fair price?

TAM: So whether you're making kids' toys, painting someone's portrait, teaching piano, tutoring math or selling homemade jewelry, pricing is weird and super awkward. But there's got to be a way to think about it that doesn't make you feel uncomfortable. So I called up my friend Phil Zelnar. He's a designer by trade, but his side gig is being a financial coach. He says there's a reason pricing is difficult.

PHIL ZELNAR: It's more like you're solving a riddle than applying a formula.

TAM: Phil says pricing can differ depending on whether you're making a product versus offering a service.

ZELNAR: For folks who are creative makers, they're going to be able to find similar products and use that as a baseline for what to charge. They're also going to know kind of like, you know, the costs associated with making the products, so they'll be able to factor that in. It's a little bit of an easier path for them. But when it comes to creative doers - people like illustrators, designers, copywriters - then there are a ton of factors in play - everything from your experience level to how big the client you're working with is to how complicated this particular project happens to be. So over time, it just becomes more intuitive, and you get a feel for how to price in different scenarios.

TAM: When it comes to figuring out how you should value your time, Phil says to start out with how much money you want to make. Think about what's fair for you and fair to the client, and then work backwards.

ZELNAR: So if you wanted to make, say, $65,000 a year as a copywriter - and what you can do is you can take that number and you can divide it by 2,080, which is the number of billable hours in a year, and you'll get to an hourly rate, which, in that case, would be, like, $31.25. If you were doing this in practice, you would want to factor in some other things like whether there are expenses related to the projects that you're doing, nonbillable time, vacation, that sort of thing, and self-employment taxes. But it does get you kind of an area to start with.

TAM: I think that's really great advice. But what if you're having a hard time figuring out what number to start with? That brings us to our third takeaway.

ZELNAR: Don't be afraid to make money.

TAM: That's right. Don't be afraid to make money. That's part of the reason why you're doing this, right?

ZELNAR: As creatives, we tend to be, like, really passionate about what we do, and we don't want to lose the opportunity to do that work. And I think because we enjoy what we do so much, we tend to think that we shouldn't be, you know, well-compensated for it. Doing something you're passionate about and making money doing it - those are not mutually exclusive.

TAM: OK, so say you're actually starting to make money. That's amazing. How do you keep track of it? I asked Lindsay, our freelance fine artist, how she handles accounting. She says there's a phrase graphic design folks say when they're talking about backing up their digital files. Save early, and save often. Lindsay says you should apply the same thinking to bookkeeping. Save your receipts, and keep track of all the paperwork that comes with your business.


TAM: That's our fourth takeaway. Track your finances, and track them often.

ADAMS: So you don't have to go back at the end of each quarter, at the end of each fiscal year to find all those receipts. I think kind of setting up a framework in the beginning, no matter if you're small, big or large - so it's, like, tracking, oh, this is what I did on this day; this is how much it cost is a lot easier than having to scramble in December to, you know - oh, what did I do in February?

TAM: Financial coach Phil says, yes, you can absolutely manage your books yourself, but don't go rogue with the way you organize your numbers. Coming up with your own little system might actually make things harder for you in the long run. So find a basic template, and stick to it. And don't be afraid to bring in a little help if you need it.

ZELNAR: It can be a worthwhile investment up front to bring in a bookkeeper just to help you get a system in place. That way, you're doing things in a standardized way. But once you have the system in place, you can take over a lot of the legwork yourself. It's - you know, a lot of it isn't rocket science. But then you'll always have a relationship with a bookkeeper, and you can fall back on them if something more complicated pops up, like, you need to start running payroll or something like that.

TAM: Even if you don't decide to hire a bookkeeper or an accountant, that's OK. Here's a tip from Phil. Separate your business finances from your personal finances.

ZELNAR: I would suggest to anybody who is going to start monetizing their side hustle that you should, first thing, get a business checking account and a business credit card, and make sure you run all of your deposits and purchases through those account. It's going to make things a lot cleaner when it comes to bookkeeping. You're going to have these accounts that you know everything in there is to do with your business, which will just make tracking a lot easier.

TAM: Don't just open up an account with any bank. Look around for one with fewer predatory practices.

ZELNAR: When you look for business accounts, you need to shop around, and you need to look for a bank that offers a business account that's going to have a low minimum balance that you maintain in order to avoid a monthly fee. Take some time to look around at what different people have to offer. And particularly, look to credit unions and local banks because they often really help out small businesses 'cause they're trying to support their community.

TAM: As challenging as it might feel, keeping track of money is one of the most important things about starting a side gig because the moment you start making money is one of the moments things will start to feel real to you and the federal government.


TAM: That's right. We're talking about taxes. So here's our fifth takeaway. Be ready to pay up.

ZELNAR: As soon as you start monetizing a hobby, you need to think of it like a business because the IRS will think of it like a business. So as soon as you start making money, then you're going to, by default, become a sole proprietor, or if you're working with somebody else, you would become a partner. So at that point, you have a business entity.

You don't need to fill out any paperwork for it or whatever. The IRS just knows that you made money, and therefore, you have a small business. And now you're going to be filling out a Schedule C, and that's going to flow on to your personal tax return too so that that income can be taxed. You know, it may feel like I have this hobby, and I just make a few thousand dollars. But from the standpoint of the IRS, you're making money that needs to be taxed.

TAM: So a Schedule C is a form that you attach to your 1040. It basically sums up what you've made as a small business owner and calculates what taxes you owe from that. It's like the W-2 that you get from your employer, but instead of them filling it out for you and sending it to you, you fill it out for yourself because you're your own boss. But what if you're just getting started and you're not even making a few thousand dollars? What if it's more like in the hundreds of dollars at the most? There is actually a minimum that you have to make in order for it to be taxed. But no matter what you're making, you still have to report it.

ZELNAR: There is a threshold that some people get confused by, and that is $400, at which point that income becomes subject to self-employment tax. But again, even if you've only made a couple hundred dollars, you still need to fill out that Schedule C and include that income on your tax return.

TAM: OK. Filling out one extra form a year, your schedule C, it doesn't sound like too big a deal, right? But here is maybe the biggest thing you need to know about side hustles and taxes. You got to make tax payments four times a year. Think about it. When you're employed at a company, the company regularly takes taxes out of your paycheck. When you work for yourself, you need to do that, too, in the form of quarterly estimated tax payments. And you can't just pay all your taxes in April.

ZELNAR: If you aren't doing that throughout the year and you only catch up with this, say, in - at the end of the year or in April, what's going to happen is you're going to end up paying a penalty and interest on all of the money that you should have been giving the government throughout the year. You're also going to probably end up having to write a very big check when you send in your tax return.

TAM: And what about sales tax? This is something you need to pay attention to if you're selling a product.

ZELNAR: So sales tax is something that happens at the state level. And when you sell something, you're going to be expected to collect whatever percentage sales tax it happens to be where you are and then remit that sales tax to the state government. Different states handle it different ways. If you, you know, have collected a very small amount of sales tax, they may only expect you to remit it once at the end of the year. If you're, you know, selling throughout the year and making a fair bit of money, it's probably more likely that they're going to want you to be remitting it on a quarterly or monthly basis.

TAM: OK. That was a lot. Taxes can be so overwhelming. But remember, you don't have to go through any of this alone.


ZELNAR: Try to find a group of peers or somebody that can mentor you, because by sharing their experience, you can learn a lot. And it can be very reassuring when you're trying to make these kinds of decisions. And I think in general, you're going to find that people are more open than you expect when it comes to helping you get off the ground.

TAM: If things get hectic, think back on why you wanted to start the side hustle in the first place, and make sure that answer comes from you and not anyone else.

ADAMS: I still enjoy creating these letters, these numbers, you know, these sets. I really do enjoy it. And I think what also makes it fun is me thinking through ways to better my product and list things that I want to put in my shop. I kind of get inspiration while I'm working on something or even from family members who will say, like, oh, have you ever thought of doing it like this or like that? And I think innovating in that way keeps it fun for me.

TAM: So if you're starting out a side hustle, be honest about the time it'll take to turn a hobby into a side gig. And remember your why. Don't dive in blind. Research your market. Take yourself seriously, but don't pressure yourself to be perfect or to do it all. Paying yourself can be complicated, but work backwards from what you want to earn. And don't be afraid to make money. When it comes to finances, track them early and track them often. And don't neglect your taxes. And last but not least, find a community of people doing what you're doing and look for a mentor who can teach you the ins and outs of your business.


TAM: For more NPR LIFE KIT, check out our other episodes. We have one on credit scores and another and how to set boundaries with family members. You can find those at And if you love LIFE KIT and want more, subscribe to our newsletter at And here, as always, a completely random tip, this time from Anna Adamson (ph).

ANNA ADAMSON: When you do the dishes, put all the folks in the same thing in the dishwasher and all the spoons in the same thing and all the knives. Then, when you take them out, you don't have to sort through them all. It's just one handful. And it goes in the drawer.

TAM: If you've got a good tip, leave us a voicemail at 202-216-9823 or email us at This episode was produced by Clare Marie Schneider. Meghan Keane is the managing producer. Beth Donovan is our senior editor. Our digital editors are Claire Lombardo and Beck Harlan. I'm Ruth Tam. And thanks for listening.

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