How to make a side job work

From barista to blogger, it's not uncommon these days for millennials to have a side job to earn a little extra money and still set their own hours.

In fact, many young people who aren't working two jobs want to be. One third of millennials said, ideally, they would want part-time work coupled with freelancing on the side, according to a recent report by employment site FlexJobs.

"The millennial generation has far more options for part-time, freelance and other flexible work than previous generations," said Sara Sutton Fell, founder and CEO of FlexJobs.

"Millennials have grown up with technology and mobility in a way that really provides less attachment to 'one way of doing things,' i.e. a full-time job," she said.

As it turns out, people looking for part-time work that pays decently and offers a flexible schedule have many options. Choices include driving for a ride share company like Uber or Lyft, or working as a freelance Web developer, according to employment site Monster.

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But before you start submitting applications and spending that extra cash, here are a few things to consider:

Find the best fit for you. If you have an interest in crafting, you could create your own Etsy shop, said Monster career expert Vicki Salemi. "Consider things that you aren't necessarily thinking about like a (paid) focus group or DJ-ing on the weekends."

And remember that while some of these positions do not always offer steady income, "by doing side jobs you develop your muscle to hustle," Salemi said. Being able to multitask well is an asset you can carry over into other areas of your life, she said.

Blogger typing on a computer
Vivek Prakash | Reuters
Blogger typing on a computer

Your side gig should also have purpose, said Catherine Seeber, a financial advisor at Wescott Financial Advisory in Philadelphia. Are you building your resume? If so, it would make sense to pick an opportunity that adds to your "repertoire of experiences." Do you need health insurance?Starbucks, for example, provides options for part-time employees, Seeber said.

It's also a great opportunity to set up a retirement plan with the extra income, said John O'Meara, a financial advisor at Inner Harbor Advisors in Baltimore. To get started, consider "a SEP, Simple or Individual [401](k) that could defer some, or nearly all, of the income you generate from the side job from income taxes," he said.

Another tax advantage is that the expenses you incur as a result of your side job are deductible from your income, said Edward Leach, a financial advisor with Highland Planning.

For example, if you open an Etsy shop and have $5,000 worth of expense costs associated with acquiring the materials, then earn $15,000, you can claim $5,000 as a business expense and only pay taxes on the $10,000 worth of earnings. Just be sure to keep an accurate record of those strictly work-related expenses and account for them on a Schedule C at tax time.

Lastly, it's called a side job because it is on the side of your regular job so it should not interfere with your primary source of employment in terms of time, productivity, or energy level. "Time management is key because you don't want to jump in and overcommit yourself," said Salemi. "The whole key is to make extra cash and have a life so you aren't working 24-7."

"Make sure the side job, or side hustle, is fairly compensating you for the time you are investing, " said Leach. On the flip side, it isn't all about the money though.

If you are gaining "valuable experience that can help you excel in your current career, it is well worth it," he said.