7 Bad Habits That Drain Your Side Gig Income

Side gigs can seriously boost your income or, in some cases, even replace it. But be careful, or you could end up limiting or lowering your earnings, something that can make your side hustle feel a lot less rewarding — and a lot more taxing.

From underpricing your services to ignoring tax repercussions, here are some of the top bad habits that could be draining your side gig income.

Undervaluing yourself or underpricing your services is one of the fastest ways to burn out on your side gig and limit your earning potential. It’s one thing if you’re new to the game, but if you’ve got the skills and know-how, you might want to review your rates.

Consider your expertise, certifications, skills and experience. Then, find out what others in your field are charging for the same thing. If they’re charging a lot more, you might need to up your prices.

Regardless of what side gig you’re doing, it’s important to stay on top of your work. This means managing your time well, being accountable and staying consistent.

“Not staying consistent can have a big impact. Side gigs thrive on regular effort. Skipping days or weeks at a time can slow down momentum and impact income,” said James Watts, a side gig expert in the course creation space and founder of Teach.io.

Poor time management can also limit your earnings or even cause you to fall behind on work or lose clients.

“Treating a side gig as an afterthought leads to wasted time and missed opportunities,” Watts said. “Setting dedicated hours for your side gig ensures it gets the attention it deserves and that you make progress.”

Even with a side gig, it’s important to have boundaries to ensure you don’t fall behind or burn out. Having these limits and a realistic schedule can help you maintain a healthy work-life balance.

“As a full-time mom and entrepreneur juggling multiple side hustles, I know firsthand the excitement and challenges of side gigs,” said Echo Wang, an entrepreneur and co-founder of Cool Travel Vibes. “While it’s tempting to let your hustle take over, constantly feeling ‘on’ can lead to burnout.

“Setting clear boundaries, like dedicated work hours, is your best defense,” Wang continued. “Think of your day as a pie — you need slices for sleep, family, hobbies and, yes, your side hustle. Without boundaries, you risk overworking, neglecting your loved ones and, ultimately, both your personal well-being and your side gig’s success.”

When you have realistic limits, you can enjoy your free time, reduce the risk of burnout and keep motivated.

While some side gigs might not require a lot of commitment, it’s still important to be prepared if you want yours to be successful — and to maximize your earnings.

“Having gone through the highs and lows of side gigging, I can tell you that if you want to maximize your side gig revenue, you don’t want to jump in too deep too soon,” said Alex Taylor, head of marketing at CrownTV.

This is especially true for those who want to eventually turn their side gigs into their main sources of income.

“It’s important to approach your side gig with care and pragmatism rather than diving in headfirst,” Taylor continued. “While preserving your main source of income, take your time to test the waters, develop a strong foundation and confirm your idea. This makes the move easier and lessens the financial burden in the event that things don’t work out as planned.”

If you’re not reinvesting at least some of what you’re earning, you could be limiting your potential financial growth, too.

“It’s tempting to pocket all earnings, but reinvesting in tools, education or marketing can help you grow your gig and earn more,” Watts said. “The digital world evolves rapidly. Sticking to what you know without expanding your skills can make your side gig stagnant. Continuous learning keeps you competitive and innovative.”

If you earn at least $400 through a side gig, you’ll have to report it to the IRS when you file taxes. This means you’ll need to keep track of your earnings throughout the year and set aside a percentage for tax purposes. If you aren’t already doing this, you could be hit with a high tax bill, which can significantly reduce your actual earnings.

“Without goals, a side gig can wander aimlessly,” Watts said.

If you don’t have clear goals — short and long term — you could be limiting your ability to earn more money from your side gig. Be sure to revisit those goals every now and again to make sure you’re on track.