The past year has been tough for everyone. But the younger generations seem to be the most affected. According to the U.S Bureau of Labor Statistics, over 30% of 16 to 19-year-olds were unemployed; more than double the rate for those above 25. Unlike during the Great Recession, the coronavirus pandemic seems to have sparked a wave of entrepreneurialism. A 2020 research by Girls With Impact shows that about 50% of Gen Z expect to be running their businesses, up from approximately 40% in 2019. Thus, many are turning to the gig economy. Side hustles can be the best way to boost your income, save more money, and improve your skills. However, to succeed, you need to be adequately prepared. One way to do that is by steering clear of these mistakes when starting.
Picking Side Hustles That Need Lots of Funds
Some side gigs need almost zero initial capital. These are the best opportunities to make extra money since you don't have to spend thousands of dollars upfront.
Some people don't do their due diligence. They also end up picking side hustles that need lots of money to start. This can make the entire process more stressful and can result in wasted money should the project be abandoned along the way.
Underestimating the Importance of Marketing
Many side gigs require you to market yourself. If you're using a platform like freelance sites, chances are you're competing with other service providers. That means you may not get noticed if you don't market yourself. People who don't give marketing the attention it deserves struggle to get business. Others make little income and end up quitting.
Charging Too Little
Many people do consultancy or freelance as side hustles. It's a great way to use your skills and knowledge to make some money. When charging clients, it pays to consider your level of expertise and experience. If you charge too little, you risk not making enough money and feeling burnt out quickly. Experts recommend charging enough to make it worthwhile. And if any client has a problem with your rates, remind them that they're paying for your expertise and time.
Not Considering Your Passion
Apart from startup costs, many people make the mistake of choosing side hustles they don't love. Over time, these gigs feel like a chore and they don't devote enough time and energy. When choosing a side hustle, it's wise to consider your interests and passions. Find an activity that brings you joy. Otherwise, you may not achieve your financial goals because you can easily give up.
Not Spending The Extra Income Wisely
Increasing your income is great. However, it can be more rewarding if you look at what you're doing with that money.
If you spend all that extra income without saving for retirement, building an emergency fund, saving for a vacation, or to buy a house, then you may be doing more harm than good. Use the extra income to better your life.
Quitting Side Hustles Too Early
Starting and running a side hustle is not always easy. There are times when you may get frustrated and feel like giving up. The reality is that side hustles need some time to get into the flow and determine whether it's right for you. If you give up early, you may lose a lifetime opportunity. So, give it time and when the going gets tough, remind yourself why you started the entrepreneurial journey.
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The COVID-19 pandemic may have disproportionately affected generation Z, but many of them have risen to the occasion and embraced entrepreneurship. Many are selling items online, creating content, offering consulting services, and more. If you're one of them, or you're just getting started, please avoid these mistakes to achieve your financial and life goals. Good luck!