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Volumes have been written about how to start a side hustle and which gigs could make the most money. What’s talked about less often is how that extra bit of money a month can change your life and put you on the path to good financial health.
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A lot of effort goes into side hustle, but that effort can pay off in the form of financial stability and achieved goals. Here’s how.
Side hustles provide income security
For millions of Americans, the standard monetary advice of saving three to six months of income is a pipe dream, but when the pandemic hit, even those with a big savings cushion quickly realized it wasn’t. was not enough. Unless you are wealthy, it has proven that true financial security can only be achieved through multiple sources of income.
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“A side hustle can help diversify your sources of income,” said Oscar Rodriguez, financial blogger and founder of OssieRodriguez.com. “This is especially important if you rely on a single source of income, such as your salary from your full-time job. Having multiple sources of income can help protect against financial shocks, such as job loss or an unexpected expense.
With a side hustle, you can finally build that emergency fund
Pandemic or no pandemic, money in the bank for emergencies is a key ingredient to good financial health. But with 64% of America now living paycheck to paycheck, according to new research from the Lending Club, that’s just not possible for tens of millions of Americans — unless they don’t. launch a concert in parallel.
“A side hustle can be a great way to help you build an emergency fund,” said Nicole Shi, personal finance blogger and founder of Create Earn Live. “It gives you some financial flexibility if something unexpected happens, like losing your job, so you don’t have to rely on credit cards or other loans.”
A gig allows you to do more than just reduce your debts
According to the New York Federal Reserve, America owes $1.59 trillion in student debt and $15.84 trillion in household debt — and as inflation rises, those numbers keep rising. Millions of households, however, aren’t really paying down their debt – they’re just paying as little as possible to avoid defaults while new finance charges pile up.
With a second income, you can spend every new dollar really tackling the life-threatening debt monster.
“If you have a huge credit card bill that you need to pay in the next few months, a hustle can help you do that without having to drastically change your lifestyle, like moving into your parents’ basement,” Shi said.
With a Side Gig, there are no more excuses not to invest
Lack of funds is one of the most common reasons people give for not investing. While there are options today to get you started with next to nothing, a side gig can give you a dedicated source of seed money to become a nest egg – no matter how big that seed is.
“I have seen many of our clients complain that there is not enough money left to invest on their monthly salaries,” said CT Price, CEO of life goes green. “By starting a side hustle, you can invest… You’ll only be in the power of compounding for years to come.”
Even if you fail, you will gain skills, experience and motivation
Even if you never earn a dime, the simple act of throwing a side hustle can set you up for career enhancement or entrepreneurial success.
“This can be an opportunity to increase your skills, confidence and resilience, depending on which path you choose to take,” said finance, marketing and advertising expert John Cammidge, managing director of JTC Consultants. “For example, working on social media for a small business is a great way to improve your marketing skills. It can give you the opportunity to follow market trends, learn about consumer engagement and discover new ideas.
Side unrests can give new business ventures a fighting chance
If you already have a business in mind, a temporary hustle can give you the financial leeway you need to see it through.
“My business wouldn’t have survived its early days if I hadn’t had a side business,” said real estate investor Brian Davis, founder of Sparks Rental. “New businesses take a lot more time and money than you might think to reach profitability and get started. My business partner and I were running out of leads, and we could have given up and closed shop, but instead we are all went out and picked up side hustles. This side income extended our trail to help us get off the ground towards profitability.
A side hustle can buy your ticket to freedom
Income security. Debt reduction. An emergency fund. Money to invest.
These are all good things to have if you’re working towards a financially healthy life, and a side hustle can buy any of them. However, it can also buy something that is just as important but far more elusive to most people: freedom.
“As a full-time digital nomad for 20 years, a parallel hustle has allowed us to travel the world with a safety net,” said Patrick Schulte, co-founder of Wanderer Financial. “We haven’t put all of our eggs in one basket so to speak, so if anything were to happen to my wife or me that stops us from working, we know we will still have income. This strategy has helped us allowed to sail around the world, to live in motorhomes and buses, and more recently, by trawler in the Caribbean.A parallel stampede is also the perfect precursor to finally leaving this soul-sucking job that you hate.
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