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Last Updated on January 26, 2022 by Daniella
The job landscape today is much different than ten years ago or even five years ago. We are in the era of side hustles. Do you ever wonder, how did we get here?
I took a look at some side hustle statistics and their driving factors for a deeper dive.
According to this report, one in three Americans have a side hustle.
That means ⅓ of people are side hustling and that number could drastically rise by the end of 2022.
Why start a side hustle?
Money is a big reason for many people (income diversity or passive income) but, it’s not the only reason, according to that report. People also choose to take on a side gig for enjoyment.
The report revealed that nearly half of Americans with a side hustle were interested in starting for passive income potential and interestingly enough, parents are motivated to start a side hustle for non-financial reasons.
Starting a side hustle can solve problems but it can also create them at the same time.
It might shock you to learn that of the number of Americans that have a side hustle, nearly one in three still struggle to make ends meet.
And according to this USA Today article, LGBTQ millennials find it difficult to achieve the American dream by age 40.
The TD Ameritrade study analyzed the differences in how LGBTQ and straight millennials view their financial picture.
Around a third of millennials from the LGBTQ community said they’re likely to achieve the American dream of owning a home, getting married, having kids, with a good job and a 401(k) compared to nearly 50% of straight millennials.
Higher student loan debt, lack of emergency savings, and the above study also showed a sizable pay gap of 12%, showing that LGBTQ millennials earn less than straight millennials. This widens the LGBTQ+ wealth gap.
LGBTQ millennails have bigger financial struggles but, can side hustles help?
People under 35 are most likely to have a side hustle with people of color accounting for the largest groups of workers with a side hustle.
Intuit says in 2017, “gig” freelancers made up about 34% of the workforce and that number is expected to skyrocket to 43% by 2022!
Interesting statistics about side hustles and one thing is clear, they’re here to stay.
If you’re wondering why you’re still in financial distress with a job and a side hustle then this article is for you!
We’re going to discuss how to avoid financial struggle with a job and side hustle, uncovering some common myths about side hustles and sharing an action plan to help you finally take ahold of your finances to strengthen your financial picture.
Let’s dive in.
Starting a side hustle isn’t easy
Starting a side hustle isn’t easy, that’s for sure. It sounds exciting on paper, doesn’t it?
It’s a money-making opportunity and while you’re daydreaming about how much you’ll be making, you aren’t quite thinking about the big picture here.
And even with a side hustle, you may still financially struggle.
This source cites that the average side hustler brings in an extra $1,122 per month working about 12 hours per week.
While an extra $1,000 per month sounds like a dream, ⅔ of people said that the extra money was going to pay their regular monthly living expenses.
Many people take on a side hustle as an opportunity to pursue their passion. They may even hope one day that they earn enough from it to quit their primary job and take on that interest full-time!
If you’re looking for a side hustle to start, check out our free side hustle quiz with curated resources for where to get started based on your side hustle match.
Check out these 5 myths about side hustles and see if you can point out fact from fiction (as well as get a realistic look into side hustles).
5 Myths About Side Hustles
These eye-opening myths about side hustling will definitely put things into perspective.
1. Side hustles will solve your money problems
This is probably one of the biggest myths about side hustles.
Just because you take on an extra gig and you are bringing in additional income does not mean that it will be the solution to your money problems.
A side hustle may not always solve your money issues and sometimes they can even add to the problem, believe it or not.
For example: At the root of money problems is your emotional and psychological relationship with money and that affects your ability to manage your money well. A side hustle can be a distraction from any money problems going on and might give you an excuse to overspend because you have that extra money coming in.
There’s nothing wrong with indulging every now but, you have to make sure that you can actually afford it.
That’s why I think it is important to have a clear goal with your side hustle. Make is specific and actionable.
An example of a specific and actionable goal is “I want to start a side hustle so I can pay off my student loan debt in 2 years” or “I want to start a side hustle to create future passive income streams so I can become work optional in 5 years”.
2. Side hustles are for everyone
This is also false.
Everybody does not necessarily need a side hustle, despite nearly half of Americans that hold one as of 2022.
Look at the big picture when it comes to side hustles. There are pros and cons to everything.
First, some advantages of side hustles include:
- The ability to bring in additional income
- Work from home
- Create your dream schedule
- Wear anything want while working, even pajamas
Those are all amazing draws for picking up a side hustle but there are disadvantages as well.
Here are some of the disadvantages:
- Stressful lifestyle
- Work life balance issues
- Hidden costs
A big disadvantage of a side gig is that it can add more stress to your life. You’re going from working one job to working two (or more) jobs.
It’s all a balancing act and that can cause stress and overwhelm.
There can also be hidden costs associated with certain side hustles that may not be top of mind like if you are a DoorDash driver, for example.
Fueling your car with gas, extra trips to your mechanic for oil changes and added wear and tear on your car are all expenses that you would take on driving your vehicle as a side hustle for extra money.
3. It’s easy to work a side hustle
It’s actually not that easy to work a side hustle, regardless of how simple or routine your tasks might be.
Because, at the end of the day you’re balancing that side job with your primary job and your home life.
It can be a real juggling act like I mentioned above.
That’s not to say that it can’t be done but it’s definitely not easy. So, if you are interested in taking on a side hustle or you’re currently working one, that’s totally fine but just know that it’s not going to be easy and it may take time to adjust to your new lifestyle.
Then, there’s work-life balance. You also have to consider if you start a side hustle based around your passion, that it can add to your workload even more. It’s a dream for many people to have their passion turn into their full-time job. It does not happen for everyone.
4. Your full time job won’t be impacted
Anything you add to your life can impact your job, from getting married to having a baby, starting school for postgraduate education or taking on a side hustle. These are life changes and they will impact your full-time job.
That’s not to discourage you from starting a side hustle, but it’s to make you aware that your job will probably be impacted so you can prepare and adjust accordingly.
You don’t have to tell your employer about your side hustle unless they have a specific policy around working outside the job. We created this great guide to help aid you in the decision of telling your employer about your side hustle.
5. Your home life won’t be impacted
As well, your home life will also be impacted when you start working a side hustle. Because again, taking on a second job impacts your life and your home life is no exception to that.
You’re going to have less time available:
- Less personal time available for yourself, your hobbies and time around the house
- Less time for your family and pets, etc.
These are all changes that are going to happen when you start a side hustle and this will have an impact on life at home.
Your Step-by-Step Action Plan to Stop Financial Struggle Balancing a Job and a Side Hustle
Awareness is the first step in all of this. You know that you’re struggling financially despite holding a job and a side hustle. What can you do about it?
Here’s the step-by-step action plan to help you address this head-on.
1. Get to the root of your financial struggle
Your financial picture is broken. You want to get to the root cause of it and then from there, you can craft a plan to fix it.
Look at your lifestyle.
Make a list of all of your expenses, the minimum payment, balances and due dates.
Make a list of all your income sources including paycheck dates.
Really look at all this information to figure out what’s not working:
- Are you over spending?
- Do you have too many bills for your income?
- Do you run out of money early in the month?
- Are you going further and further into debt?
- Are you behind on your monthly payments or do you have collections?
The good news is, you can do this all yourself, without the help of a professional.
Just look at all the numbers to uncover what’s not working.
To help you with this, I recommend getting a budgeting app.
I like the Mint app because it’s free and easy to use. It groups your spending into categories. You can see where you’re spending most of your money for the month, you can uncover spending trends and habits to get a good look at where your money is going during the month.
Or you can utilize our free budget tracking sheet below.
Sign up to get the free Monthly Budget Planner
2. Lower your bills and lower your budget
Cut your bills down and reduce your budget. This is a quick and effective way to help you start spending less starting today.
Need some help lowering your bills?
Trim can negotiate your bills for you without you having to lift a finger, other than signing up and entering in your bill and bank information.
They do all the heavy lifting for you.
A $12 monthly savings on your cable bill adds up to $144 savings per year!
That’s huge and that’s just the savings from one bill!
Bonus app: If you have a mess of subscriptions draining your budget, look into Truebill to cancel all your unwanted subscriptions.
3. Look at your side hustle
Take a close look at your side hustle to see if it really makes sense for your life.
You’re trading your time for money here so you want to make sure that whatever side hustle you have is truly a good fit for your lifestyle.
Do you work for 20 hours a week to make an extra $1,000 a month? This equals out to about $12.50 per hour.
Could you be making more in another side hustle working the same or fewer hours?
What is the expense of working your side hustle?
- More wear and tear on your car
- Working overnight or long hours
- Being on call
- Travel time
- Family time
Weigh the pros and cons, looking at the big picture to make sure your side hustle makes sense for you.
Money is only one factor. Look at your happiness, stress, and work/life balance, too.
4. Look at your primary job
A side hustle can only do so much.
After all, it is a job that you’re working on the side. It’s meant to supplement your income but if you’re not making enough in your primary job then that could be a big problem.
Consider a career switch or consider continuing education so you can get a degree, license or certification needed to advance your career or pursue a different work industry.
Side hustles are growing year after year. They can truly be a solution for you but, remember to look at the total picture, examine your budget and spending patterns, and take action when it comes to ending the cycle of living paycheck to paycheck, struggling financially.
Do you have a side hustle?
Share what you do on the side in the comments!
- 14 Reasons to Start a Side Hustle (From 14 Different People)
- How My Side Hustle Income Helped Me Buy My First House
- The Only Guide You’ll Ever Need for Including Side Hustles on Your Resume
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