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How to Use First Savings Bank for Your Side Hustle Finances

 

How to Use First Savings Bank for Your Side Hustle Finances

The side hustle economy is booming. From freelance graphic designers and Etsy shop owners to rideshare drivers, online tutors, and weekend photographers, millions of people are supplementing their income — or building entire businesses — outside of their traditional nine-to-five jobs. According to recent surveys, nearly half of all working Americans report having some form of side income.

But while the energy and creativity that go into launching a side hustle are often abundant, financial organization frequently lags behind. Many side hustlers mix their hustle income with personal finances, skip proper expense tracking, and find themselves scrambling come tax season. The result? Missed deductions, unexpected tax bills, and a blurry picture of whether the side hustle is actually profitable.

The solution is simpler than most people think: treat your side hustle like the business it is — and bank accordingly. First Savings Bank offers a range of financial tools and accounts that, when used strategically, can bring order, clarity, and long-term sustainability to your side hustle finances.

This guide walks you through everything you need to know — whether you're just launching your first side gig or looking to bring more structure to an already-thriving hustle.




Why Your Side Hustle Needs Its Own Banking Setup

Before diving into specific products and strategies, it's worth understanding why separating your side hustle finances from your personal finances is so important.

Clarity and visibility. When all your income and expenses flow through a single personal account, it becomes nearly impossible to accurately assess how much your side hustle is actually earning — and spending. A dedicated account gives you an instant, clear view of your hustle's financial health at any given moment.

Tax preparation made simple. One of the biggest headaches for side hustlers at tax time is reconstructing months of income and expenses from a messy transaction history. A dedicated side hustle account means all relevant transactions are in one place, making it dramatically easier to identify deductible expenses, calculate net income, and work with an accountant if needed.

Professionalism. Receiving client payments into a dedicated business or side hustle account — rather than a personal one — signals professionalism and credibility. It also makes it easier to use payment platforms that require a linked business account.

Legal protection. If your side hustle operates as an LLC or other formal business entity, maintaining a clear separation between personal and business finances is not just good practice — it's a legal requirement for preserving the liability protection your business structure provides.

Habit building. Managing a separate account for your side hustle builds the financial discipline and organizational habits that will serve you well as your income grows — and as your side hustle potentially evolves into a full-time business.

Step 1: Open a Dedicated Side Hustle Checking Account

The single most impactful step you can take for your side hustle finances is opening a dedicated checking account exclusively for hustle-related income and expenses. All client payments, platform payouts, and business income should flow into this account. All business-related purchases — supplies, software subscriptions, marketing costs, equipment — should be paid from it.

When evaluating a checking account at First Savings Bank for this purpose, look for the following:

No or low monthly fees. As a side hustler, keeping overhead low is essential. Look for an account where monthly maintenance fees are waived by meeting straightforward conditions, such as a minimum balance or a monthly direct deposit.

Online and mobile banking access. You need to be able to monitor your account, make transfers, and deposit checks from anywhere — especially if your side hustle keeps you on the move. Robust mobile banking features are non-negotiable.

Mobile check deposit. If clients pay you by check, the ability to deposit remotely via your smartphone saves significant time and eliminates unnecessary trips to a branch.

Low or no transaction fees. Depending on the volume of your side hustle activity, transaction limits could become a concern. Choose an account with generous transaction allowances to avoid per-transaction fees eating into your margins.

Even if your side hustle is small and informal, opening a dedicated checking account costs nothing and delivers enormous organizational benefits from day one.

Step 2: Set Up a Side Hustle Savings Account for Taxes and Reserves

This step is one that far too many side hustlers overlook — often to painful effect. Unlike traditional employment where taxes are automatically withheld from each paycheck, side hustle income is paid gross, with no tax withholding. That means you are responsible for setting aside and paying your own taxes — including both income tax and self-employment tax, which covers Social Security and Medicare contributions.

The self-employment tax rate alone is 15.3% on net self-employment income. Add federal income tax and potentially state income tax on top of that, and many side hustlers owe 25–35% or more of their net income in taxes. Failing to prepare for this is one of the most common — and most expensive — mistakes in the side hustle world.

The solution is straightforward: open a dedicated savings account at First Savings Bank specifically for tax reserves, and transfer a percentage of every payment you receive into it immediately. A commonly recommended guideline is to set aside 25–30% of net income for taxes, though your exact obligation will depend on your total income, deductions, and tax situation.

Beyond taxes, a side hustle savings account can also serve as a business emergency fund — a financial buffer to cover unexpected expenses like equipment repairs, software renewals, or a slow month of income without disrupting your personal finances.

When selecting this savings account, prioritize a competitive APY so your tax reserves are earning interest while they sit, and ensure there are no unnecessary fees that erode your balance over time.

Step 3: Understand and Track Your Side Hustle Cash Flow

Having the right accounts in place is only half the equation. The other half is actively monitoring and understanding your side hustle's financial flows — how much is coming in, how much is going out, and what's left over.

Cash flow tracking doesn't have to be complicated. At its most basic, it involves recording every income payment received and every business-related expense paid, then periodically reviewing your net position. Many accounting tools — including free options like Wave and low-cost platforms like QuickBooks Self-Employed or FreshBooks — can connect directly to your bank account and automate much of this process.

At a minimum, aim to review your side hustle account activity monthly. Ask yourself:

  • Is my income growing, declining, or staying flat?
  • What are my largest expense categories, and are they justified?
  • Am I consistently transferring enough to my tax savings account?
  • Is my side hustle actually profitable after accounting for all expenses and taxes?

These regular check-ins keep you informed, help you make smarter decisions, and ensure that no unexpected fees or charges go unnoticed.

Step 4: Use First Savings Bank Tools to Stay Organized

First Savings Bank's digital banking platform offers a range of tools that side hustlers can leverage to stay organized and on top of their finances:

Account alerts. Set up automatic notifications for incoming deposits, low balances, and large transactions. This keeps you informed in real time without requiring constant manual monitoring.

Scheduled transfers. Automate your tax savings transfers. Each time a payment hits your checking account, a scheduled or rule-based transfer can move a predetermined percentage directly into your savings account — eliminating the temptation to spend money you'll owe later.

Transaction categorization. Many online banking platforms allow you to tag or categorize transactions, making it easier to identify deductible business expenses at a glance and generate summaries for tax reporting.

Online bill pay. Use your bank's bill pay feature to handle recurring business expenses — such as software subscriptions, web hosting, or professional memberships — directly from your side hustle checking account, keeping all business payments in one place.

Taking advantage of these built-in tools costs nothing and can dramatically reduce the time you spend on financial administration each month.

Step 5: Plan for Quarterly Estimated Tax Payments

If your side hustle generates more than $1,000 in net income annually, the IRS generally requires you to make quarterly estimated tax payments. These payments are due four times per year — typically in April, June, September, and January — and are designed to approximate the taxes you'll owe on your self-employment income.

Failing to make estimated tax payments — or underpaying them — can result in penalties and a large, unexpected tax bill at year-end. Planning for these payments is an essential part of responsible side hustle financial management.

Here's a simple system that works well for most side hustlers:

First, set aside your tax percentage from every payment received into your dedicated savings account. Second, when quarterly payment deadlines approach, calculate your estimated tax obligation for the period and pay it directly to the IRS (and your state tax authority if applicable) using the funds you've accumulated. Third, after each payment, continue the cycle for the next quarter.

This system transforms tax payments from a stressful scramble into a predictable, manageable routine. And because your reserves are sitting in an interest-bearing savings account at First Savings Bank in the meantime, your money is quietly growing while it waits.

Step 6: Separate Personal and Business Credit

As your side hustle grows, you may find yourself needing to make larger purchases — equipment, inventory, marketing campaigns, or professional development. While it may be tempting to put these on a personal credit card, using a dedicated business credit card or line of credit offers significant advantages.

A dedicated business credit card keeps all business expenses cleanly separated from personal spending, simplifies expense tracking, and may offer rewards or cash back on business-related purchases. It also helps you build a business credit profile, which can be valuable if you ever need to apply for a business loan or line of credit in the future.

Ask First Savings Bank about business credit options that may be available to side hustlers and small business owners. Even if your hustle is part-time, having access to a small business line of credit can provide a financial safety net during slow periods or when unexpected business expenses arise.

Step 7: Think Long-Term — Scaling Your Side Hustle

Many of today's most successful small businesses started as side hustles. If your goal is to eventually transition your hustle into a full-time business, the financial habits and systems you build now will form the foundation of that future enterprise.

As your income grows, consider these next steps in your banking and financial evolution:

Formalize your business structure. If you haven't already, consult with a business attorney or accountant about whether forming an LLC or other entity makes sense for your situation. This can provide liability protection and may offer tax advantages.

Upgrade your banking relationship. As your revenue increases, explore whether a dedicated small business checking account — with higher transaction limits, additional features, and potential access to business lending — better serves your needs than a basic personal or starter account.

Build a business emergency fund. Aim to accumulate three to six months of business operating expenses in your side hustle savings account. This financial cushion gives you the stability to weather slow periods and invest in growth opportunities without financial stress.

Work with a financial professional. As your side hustle income becomes more significant, the complexity of your tax situation and financial planning needs increases accordingly. A CPA or financial advisor with experience in self-employment and small business finances can help you optimize your tax strategy, plan for retirement, and make informed decisions about reinvesting in your business.

Final Thoughts

Your side hustle deserves to be taken seriously — and that starts with treating its finances with the same intentionality you bring to the work itself. By opening dedicated accounts at First Savings Bank, automating your tax savings, monitoring your cash flow, and building disciplined financial habits from the beginning, you set yourself up for a side hustle that is not just creatively fulfilling but financially sustainable and genuinely profitable.

Whether your side hustle is a passion project generating a few hundred dollars a month or a growing enterprise on the path to full-time income, the financial systems you put in place today will determine how far it can take you tomorrow.

Start organized, stay disciplined, and let your side hustle finances work as hard as you do.

This article is intended for educational and informational purposes only and does not constitute financial, tax, or legal advice. Tax obligations for self-employed individuals vary based on individual circumstances. Please consult a qualified tax professional or financial advisor for guidance specific to your situation. Product availability at First Savings Bank may vary; contact the bank directly for current account options and terms.

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