Side hustles can change your life. Just ask Kevin Ha.

Last year, the income from Ha’s side hustles hit a point where the 33-year-old was able to quit his day job. He now replicates his working salary — more than $5,000 per month — working nights and weekends, while spending most days with his newborn.

“Now I work when I want and I do the things that I want to do,” says the Minneapolis-based lawyer, who blogs at Financial Panther.com. “I still have to work for money. But I work much more on my own terms.”

Changing your life with side hustles

Notably, about half of Ha’s monthly income comes from gig economy apps that are widely available and do not require special skills. Unlike many other professionals who flock to highly-paid consulting and teaching applications, Ha’s main side hustles involve delivery, surveys and room rentals.

In fact, since the pandemic, the bulk of his app-based income comes from food delivery platforms such as DoorDash, GrubHub and UberEats. Delivery apps like these have gone gangbusters since Covid business closures swept the country, Ha notes.

That’s good for him because he temporarily dropped a formerly lucrative side hustle — renting out a spare bedroom through Airbnb — because he didn’t want to take any chances with his new baby. Under more normal circumstances, Airbnb brought in about $1,000 a month. 

However, the key to Ha’s success is not the apps he uses. It’s how he uses them. By being strategic about how he manages his side hustles, he earns far more per hour than most independent contractors. He typically takes home between $30 and $40 per hour, he says. That’s about twice the average hourly pay estimated for delivery drivers at SideHusl.com.

Ha also manages his side hustle income in a way that boosts his ability to make his side hustles life-altering.

Strategy

Ha has 9 tips for using a side hustle to change your life.

It starts with a little introspection. After all, you’ve only got 24-hours in a day and 16 of those hours are likely to be used for sleep and your day job. That leaves just 8 hours for everything else, including family, meals and entertainment.

So, if you’re going to fit a side hustle into those precious free hours, it better be something you like and want to be doing anyway, he says.

1. Consider it a passion play

This is why Ha doesn’t tutor online. To be sure, he could make a good hourly wage with sites like Wyzant, Wize and Varsity Tutors, since he can tackle complex topics, such as preparing for the Law School Admissions Tests. But, he says he spends too many hours at his computer as it is. (His blog accounts for a significant portion of his side hustle income.)

Ha wants his app-based side hustles to involve activities he’d be doing with his free time  — things like riding his bike or walking his dog. That drew him to apps that would allow him to make deliveries on his bike and to dog-walking and dog-watching apps such as Wag and Rover.

The remarkable thing about the rapid growth of the gig economy is there are part-time job options for people with a wide array of interests, from cooking and art to fixing things or writing. If you’re not sure what types of side hustles might suit your unique combination of interests, skills and resources, check out the SideHusl quiz.

2. Be in the Business of You

Once you’ve picked the gig apps you want to work with, you need to train yourself to think like a business owner, Ha says.

The biggest mistake that Ha sees people making is thinking like employees. Thus, when DoorDash or GrubHub asks them to take a delivery, they feel compelled to do it. After all, you rarely say no to your boss.

But, when you are working with online platforms like these, you are generally considered an independent contractor. That means you’re in business for yourself and need to evaluate each offer like it was a business deal, Ha says. If the proposed assignment provides enough money for your time and effort, accept. Otherwise, just say no.

“My acceptance rate for each of the apps is low — 10%  to 40%,” he says. “I take the jobs that make business sense for me. I am not doing the ones that are not profitable.”

At one point, gig economy companies would threaten to block workers who declined too many job offers, says Ha, who has been doing deliveries since 2015. But they rarely do that now.

That’s because many states are scrutinizing gig economy companies to see whether they are better classified as employers, rather than software companies that facilitate self-employment, as the gig companies claim. The more control the gig company has over your work, the more likely they are to be deemed employers. Being designated employers would cost the gig companies a small fortune, so they’re less likely to press their luck in today’s environment.

“DoorDash will put your acceptance rate on the app, but it doesn’t mean anything,” says Ha, who specialized in employment law. “They are not going to kick you off the app for not accepting jobs.”

3. Trash the “scarcity mindset”

Another reason that people accept unprofitable work is because they think they need to take loss-leaders to keep getting offered future work, Ha says. 

“That’s a scarcity mindset,” he says. “In reality, if you are in a big city, you are going to get a lot of offers. The world is a big place and there are a lot of people. There is always more out there for you.”

If the job requires too much driving or too much time for too little money, decline the request. You’ll get a better offer if you wait.

4. Seek on-the-way work

One of the ways that Ha has made delivery particularly lucrative is by using his delivery apps when he’s already on his bike. When he worked for a large law firm in downtown Minneapolis, for instance, he rode his bike to and from work. He would flip on his delivery apps as he was walking out of the office. (He’s signed up with six delivery apps — DoorDash, UberEats, GrubHub, Postmates, AmazonFlex and Roadie.) He’d scan them all to see if anyone needed a delivery that was on his way home.

“It was more therapeutic than it was just about money,” Ha says. “I was stressed at work, sitting 10 hours a day at a computer. I figured if I could spend an hour a day, exploring the city while making deliveries on the way home, it was good for my mental health. And I was getting paid to exercise.”

5. Multi-task

Since you are not an employee, you can work with as many apps as you want, Ha adds. The more apps you have, the more likely you can double- or triple-up with jobs that can be done on the same trip. Indeed, since food delivery apps often work with the same restaurants — or many restaurants in the same neighborhood — you may be able to pick up orders for DoorDash, UberEats and GrubHub all at the same time.

Getting multiple orders from different apps usually only happens during rush hours, however. That’s typically noon and after work. Doing deliveries at other hours is far less lucrative and less likely to be worth your time.

6. Watch expenses

Also consider narrowing the geographic range where you work.  Focus on just deliveries that are near your home or that are all near each other. That reduces the time it takes to pick up multiple deliveries and it keeps gas and parking costs low for those doing deliveries with a car.  

The Internal Revenue Service estimates that it costs 57.5 cents per mile to use your car for work. That figure includes the cost of gas and depreciation on your car. Your real costs could be somewhat different. But that’s a good guesstimate to use when you’re trying to figure out whether a delivery is worth your time.

7. Build your emergency fund

There’s nothing guaranteed about side hustle income. Some months it’s great; other months, you’re hard pressed to find work. If you hope to eventually work solely for yourself, you’ll need substantial emergency reserves.

When the pandemic struck, Ha says his side hustle income got slammed. But he has a year’s worth of emergency savings set aside. That made it easy not to worry about being able to make day-to-day bills. He recommends that you build your emergency savings while you still have a day job, and your side hustle income is just extra money.

How much do you need? Financial planners recommend that everyone have at least 3 to 6 months worth of living expenses set aside. However, the more uncertain your circumstances or job, the more savings you need. If you’re the sole bread-winner and are fully self-employed, you may need as much as a year’s living expenses set aside.

8. Avoid lifestyle creep

A lot of people see side hustle income as fun money. They use it to finance lavish vacations and to purchase things that they otherwise couldn’t afford.

That’s fine if you like your day job and don’t intend to ever use a side hustle to change your life. But, if your goal is to give yourself long-term freedom, you have to resist the urge to use this extra money for living expenses, says Ha. It makes the job of earning enough to quit your day job far harder.

“I am not against spending money. Spend money on whatever you value,” he says. “But do it with your income. If you do it with this extra income, it means that you can’t afford it.”

9. Don’t forget the tax man

The other difference between being an employee and being self-employed is that no one automatically deducts taxes from your pay. Thus, you need to set aside enough money from your earnings to pay state and local taxes, as well as levies for Social Security and Medicare. That’s likely to amount to 30% or more of what you earn.

Plan for that, so you don’t get unpleasantly surprised in April. But also know that there are a number of deductions and credits that you can take as a self-employed person that you wouldn’t qualify for as an employee. The IRS has an entire section of its web site dedicated to providing tax tips and help to gig economy workers.