Boost Your Income With a Side Hustle You’ll Love

(Image credit: AJ Wattamaniuk (AJ Wattamaniuk (Photographer) - [None])

published 7 May 2019

Ryan Ermey: Whether you're trying to make ends meet or just want a little extra walking around money, you could probably use a SideHusl. Today's interview with sidehusl.com editor Kathy Kristof should get you on track to earning cash on the side, whether you're a skilled worker or just someone willing to walk a few dogs or rent out your house. On today's show, Sandy highlights tax breaks for caregivers in honor of Mother's Day, and we talk dividend stocks and student loans in a new game of financial fact or fiction. That's all ahead on this episode of Your Money's Worth. Stick around.

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Sandy Block: That's right. And first a little story about my mother. When she started out as a newspaper editor in the small town where I grew up, there were actually two newspapers, and her male counterpart was paid more than she was even though he didn't have as much education or experience, was nowhere near as smart as she was, and when she inquired about it, they said, "Well, he's a man and he has to raise a family."

Sandy Block: So, now, if you did that these days I think you would probably get hauled into court, but the fact of the matter is that there is still a gap between what women make and what men make, and there's all kinds of theories as to why that is, but a big one is caregiving. Women are still responsible for the bulk of taking care of not only children, but aging parents, and that often causes them to step out of the workforce and leads to overall lower earnings over time.

Sandy Block: Right. There's a child tax credit worth up to $2,000 per child, and we've talked about that in other podcasts. What you may not know is that you can also claim a credit up to $500 for other dependents, and most likely that might be an elderly parent that lives with you. Now there are some rules about this. Basically you have to be responsible for almost all of the parent's care and finances.

Sandy Block: Right. I think one thing that happens is some women in particular don't go back to work because they look at the high cost of childcare and they think, "It's just cheaper for me to stay home." And I understand that analysis, but in the long term, that can hurt your retirement savings, it can hurt how much you're going to get in Social Security, particularly if your marriage doesn't last. There's a high rate of poverty among divorced women because they stepped out of the workforce and they can't rely on their ex’s income when they retire. So, I think it's helpful to look at ways that you can stay in the workforce and there are tax breaks for childcare. Depending on your income, you might qualify for the child and dependent care tax credit which covers up to $3,000 in childcare expenses for children under 13.

Sandy Block: Another one that we like and we write a lot about is, if your company offers it, it's a flexible spending account for dependent care. This works like a health care flexible spending account. You put that money into a pre-tax account and then you can use it to pay all kinds of expenses for a nanny, pre-school. You can even use it to spend money to pay for summer day camp which, as I understand it, could be quite expensive.

Sandy Block: So, look into these options. The final one I want to mention is something we also write about a lot, particularly around tax time, which is a spousal IRA. Ordinarily you have to have a job with earned income to contribute to an individual retirement account, but if you're married and you are the stay-at-home spouse and your spouse has earned income, he or she can basically contribute to your IRA.

Kathy Kristof: Oh, gosh, the ratings are . . . We take a whole bunch of different things into account. What we try and do is really empathize with the SideHusl, the freelancer, and say, "Okay, what are all the factors that are going to make this good or bad for you?" So, obviously, high on that list is how much you're going to earn. Also whether there are costs involved in earning that money, and so is your net pay decent? What are your working conditions like? Do you have to put yourself or your assets at risk? Are you given complete flexibility over your schedule or is somebody actually dictating the terms, dictating the dress code, all those things. So, all the things that would make any job or any way to make money, good or bad. That's what we factor in to our Husl$cores.

Kathy Kristof: They make a big deal of saying that they have insurance and so everything is fine, and that your car is going to rent out a lot. And that part is true. You can definitely rent out your car regularly if you're willing to do this, but what they don't tell you is their insurance policy is so full of holes that, if this Uber/Lyft driver gets in an accident when say, they're going to the grocery store for themselves, or whatever, driving on the way to a gig they're not actually involved in it, it doesn't cover you at all. And so people have actually lost their $20,000 car because they signed up for this website that pays them $24 a day, or something.

Kathy Kristof: And so, they're long, boring, legal documents but they usually are going to spell out the things that should make you nervous, and everyone is a little bit different, but some of them, for instance, will tell you, "Oh, we reserve the right to kick you off the platform at any point." And, what was the one I was just reading the other day, where it said, "All of the pay that's earned through our site actually belongs to our site."

Kathy Kristof: Yeah. “And so, if we pay you before we decide to confiscate your earnings, well, cool for you." There's no guarantee that you actually get that pay. And it's right there in black and white, and because these guys call these independent contractor positions rather than employee positions, they are not obligated to follow any sort of like the law. There's no minimum wage, there's no overtime, there's none of that stuff. And so, what you're governed by is that contract that's in the terms and conditions. And so, like you said, even though it's time-consuming, if we don't rate a site and you're thinking about working there, you can email me at kathykristof@sidehusl.com and I'll try and put it on our list to review, but other than that, I mean, that terms and conditions document is the most important thing for you to read.

Kathy Kristof: We also look for reviews on a zillion different sites. Better Business Bureau, Sitejabber, Glassdoor, Indeed, ConsumerAffairs.com, complaints bureaus, just all of those places because we want to look for signs that... the trouble spots that we see in terms and conditions are actually affecting people in real life, and almost always, if a site has been in business for a while, you will start to see those complaints.

Kathy Kristof: Oh, there's so many fun, good ones. There really are. I mean, we rate everything, and then some of our staff, including me, will try some of them just to make sure that they actually live up to their billing, and so I signed up for something called Giggster, and Giggster is G-I-G-G-S-T-E-R, and what they do is, it's a site where you can rent out your house, or portion of your house, but instead of renting it out to tourists, you rent it out to filmmakers and photographers and people who want to do special events. Right?

Kathy Kristof: And so, in one day, my house earned $1,455 after commission, and it was just such a fun day because it was just a 10-hour day where they bring in all these people and they're taking photographs for an advertisement, and they're on there, and there are three other sites that do almost identical things, really. Again, great way to make a lot of money in a very short period of time. So, renting your house by the hour, Peer Space, Giggster, thisopenspace, Splacer, they're all great sites to sign up for.

Kathy Kristof: Oh, absolutely. So, if you have wide computer research skills, some of the jobs are specifically online research and that qualifies as private detective, right? So, I mean, that one's really fun. Oh, there is... If you're a cosmetologist, there are a couple where, the site beGlammed is the best that we found, and they have you go out to people's houses and do their hair and makeup for special events, like weddings and showers and television appearances. And that pays between $30 and $90 an hour, which is not half-bad, right?

Kathy Kristof: On some of the platforms, especially some of the really broad ones that I try and find you, and it's like Upwork or remote where they have this kind of broad mandate, they'll find almost anybody a job, right? Those, by and large, I just don't recommend, and one of the reasons why is it's extremely difficult to differentiate yourself from the millions of other freelancers and freelancers from other countries where the cost of living is so low that they don't mind getting a dollar to do a job that's going to take them three hours, and somebody here, of course, is going to go, "Okay, that makes absolutely no sense."

Kathy Kristof: But if you look at the platforms that specialize in what you want to do, so if you, say, want to write for a living, look specifically at the ones that specialize in that, and there's a couple of them that are really great, and there's one called ProBlogger that basically is more of a bulletin board for providing jobs, so there's no... you don't have to pay anything to be on it and you just go and search whenever you feel like it.

Kathy Kristof: The Washington Post has a talent network where you can sign up and, if you're in the right areas, they will find you work. I contently, I leisure write for pay for corporate websites, and they pay decently. There's a screening process but once you've passed their screening process, you really don't have to compete with every human being on the planet. You are just competing with a very small group of people who have the same expertise as you, and that's really the key, is, specialize, specialize, specialize, and stick to your niche, and your chance of finding work is much better and the chance of finding well-paying work is dramatically better.

Ryan Ermey: . . of the standard employers 500 stock index, which, as you remember, is an index that is a proxy for the broad stock market. And not only that but according to our friends at Reality Shares, which is a dividend focused ETF provider, from 1972 through March 2018, funds that raised their dividends posted a 9.8% average annualized return compared to a 2.6 return for companies that didn't pay dividends at all.

Sandy Block: So they created a new standard, a new bankruptcy standard, that says that you have to prove undue hardship to get out from under your student loans in bankruptcy, and that standard has proven so difficult that there've been stories about bankruptcy judges who said, "I really, really want to give you a break, borrower, obviously you're desperate and sad, but the law does not allow me to do it." It's just nearly impossible to get rid, and that's why you're hearing stories about people retiring with student loans and having their Social Security benefits garnished, because they have been unable, they're literally taking these debts to their graves.

Sandy Block: And it's not just federal student loans. The standard also applies to private student loans, which are issued by private lenders, have higher interest rates, fewer relief provisions. So, the takeaway here is, particularly people are going to be graduating in the next few weeks, they usually get six months before they have to start making payments. Take these payments very, very seriously because it is very hard to get out from under your student loans.

Sandy Block: What isn't hard, but not enough people do it, is coming up with a payment plan that you can afford. So what you need to do is get right on this and figure out who you owe to, what your payments are, what your options are, and we'll put all the links in the show notes for these provisions. So, maybe, although it's becoming really hard and you might even qualify for forgiveness if you work in public service, but getting your loans discharged in bankruptcy is not an option for the vast majority of borrowers, and that makes it just that much more important that you stay on top of your student loans.

Ryan Ermey: That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at podcast@kiplinger.com. If you like the show, please remember to rate, review and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.

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Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.