Most of us have stood at this crossroad: Should you smash that debt first or start a side hustle and try to build something? It’s a fair question, especially when your wallet’s looking thin, bills keep rolling in, and you’re chasing a bit more freedom from the 9-to-5 grind.
Here’s the straight talk—there’s no one-size-fits-all answer. But there is a smart way to weigh it up without spinning your wheels or getting stuck in money limbo.
Let’s break it down the way I’d tell a mate over coffee.
1. What Kind of Debt Are We Talking About?
Not all debt is created equal. Before deciding whether to pay it off or hustle on the side, get clear on what kind of debt you’re carrying:
Credit Card Debt—This stuff’s toxic. The interest rates are brutal. If you’re paying 20% interest, every month you hold that balance is money getting torched. Paying this off fast is often the best move.
Car Loans or Personal Loans—These are usually a bit less nasty, but they still bleed you slowly. You might be able to juggle payments while earning extra on the side—if your hustle has a decent chance of paying off.
Student Loans or HECS (for Aussies)— These are often lower interest and sometimes income-based. These can usually take a back seat if you’re building something solid.
Bottom line: the more interest it’s costing you, the more sense it makes to knock it down quickly.
2. What’s the Hustle Opportunity?
Now flip the question. What kind of income potential does your side hustle have?
If you’re looking at something like
- Dog walking
- House cleaning
- Lawn mowing
- Car detailing
- Freelance writing or editing
…these can start fast, with low upfront costs, and you can make your money back pretty quick.
If your hustle needs a bigger investment—say starting an online store, buying tools for handyman work, or building a blog—it might take a bit longer to turn a profit. That’s not a bad thing; it just means you need to be more patient and plan better.
Ask Yourself:
- Can I make $300–$500 a month within the next few weeks from this hustle?
- Do I need to go into more debt to start it?
- How much time can I actually give it each week?
If the answers are promising, it might be worth putting some energy into the hustle while making minimum payments on your loans.
3. Do the Math (Not Just the Feelings)
Let’s be real—money choices feel emotional. But this one needs a bit of plain old math.
Here’s a simple formula to help you decide:
If your debt interest rate is higher than the expected return from your hustle (after costs), you’re better off smashing the debt.
If your side hustle earns more per dollar than what your debt costs you, then it’s worth investing in.
Example:
The credit card is costing you 20% in interest.
Your side hustle makes $20/hour, but you only get to keep $15/hour after fuel and tools.
That’s about $60 saved for every 4 hours of hustling. But if you use that same 4 hours to pay off your credit card, you might actually “save” more in interest over time. It’s not always about what you earn; it’s about what you keep.
4. Can You Do Both?
Plenty of folks think it’s either-or. But here’s a little trick:
Split your energy. Hustle part-time and throw every cent it earns at your debt.
Let’s say you make $400 a month from washing cars on Saturdays. You still keep your day job, you don’t burn out, and that $400 goes straight into knocking out the loan. You’re speeding up the payoff without pulling your hair out.
The bonus? Once the debt’s gone, that $400 becomes your money. You’ve got a working side gig and more freedom to choose what’s next.
5. Watch for the Burnout Trap!
Be careful here: if you’re juggling a high-stress job, bills, family, and trying to start a business on the side, something’s got to give.
Debt can feel heavy, but burnout costs more in the long run. Don’t build your escape route by digging another hole.
If you’ve only got one or two hours a week to spare, that’s fine—start small. Keep it sustainable. Some hustles grow faster than others, but slow and steady still beats quitting in frustration.
6. What’s Your Risk Tolerance?
Some folks can live with a bit of debt hanging over their heads. Others lose sleep the minute they owe anything.
If you’re the type who hates debt with a passion, paying it off first might give you the mental freedom to throw everything into your hustle later.
If you’re comfortable carrying a loan while you grow your income, just be honest about the risk. Starting a business—any business—comes with no guarantees.
7. Tools That Help You Track Both.
Don’t wing it. Use free tools to help you stay on top of the numbers:
- YNAB (You Need A Budget)—Good for assigning a job to every dollar.
- Google Sheets – Just make a custom tracker to log debt payments, hustle income, and expenses.
- EveryDollar or Goodbudget—handy for folks who prefer mobile apps.
Tracking keeps you honest. It’s easy to lose track when money’s coming in from random gigs or going out on tools, apps, and fuel.
Final Thoughts: You’re Still Moving Forward Either Way
Whether you smash your debt or build your side hustle first, both paths are better than standing still. Don’t let choice paralysis stop you from making any move.
If you’re just starting out, here’s a basic plan:
- Pay minimums on your loans.
- Start a low-cost side hustle that pays weekly.
- Use that income to throw extra at the debt.
Once the debt’s down, reinvest in bigger or smarter hustles.
Keep it simple. Keep it steady. And don’t forget—every extra dollar you earn is one step closer to not needing to ask this question ever again.
Got questions? Got a hustle idea that you’re not sure will fly? Chuck me a message or leave a comment on SideHustleQuest.com.
I’ve probably tried something close—or know someone who has.
Until next time, keep it honest and keep it moving.
