With the gig economy in full swing, you probably know someone with a side hustle — or even have one yourself. After all, there are many perks to having one, including working on your passion project on the side of your regular job, a test run for starting your own business full-time, a way to save money for your emergency or vacation fund, or a great way to put money toward your student loan payments. Plus, with many side hustles, you can do them on your own schedule versus set 9-to-5 work hours. In essence, there are more reasons to have a side hustle than not. Alexandrea Ravenelle, author of the upcoming book, Hustle and Gig, agrees. “When there’s a gap between your income and your expenses, there are two main options: increase your income or decrease your expenses, and a side hustle can be a strategy to increase your income,” she tells Pillar.
Overall, side hustles are becoming more and more popular, according to Jobvite’s Job Seeker Nation Study. In April 2018, on behalf of Jobvite, Zogby Analytics conducted an online survey of 1,509 job seekers in the U.S. between the ages of 18 and 60+. They found that more than half of young workers, ages 18-to-35, have now taken on a side hustle. “It’s not a secret anymore that side gigs — no matter what form they take — have become a smart move, both financially and career-wise,” Rachel Bitte, Chief People Officer at Jobvite, tells Pillar. “The gig economy can provide a much-needed secondary source of income, help workers acquire skills to push closer to their dream job, or even bring a passion project to life (and then monetize it).”
The Importance Of Having A Side Hustle: Start With An End Goal
Bitte says that picking the right side hustle is all about assessing your own goals. She says to ask yourself: Do you have a specific project in mind? Want to start your own business? Acquire some skills to help you land another full-time job? Or just make some extra cash? Whatever it may be, she says that determining what you’re hoping to get out of it is the best place to start when deciding on the right side hustle. “And, aside from offering some reprieve from student loans and rent, the gig economy is the perfect place for entrepreneurial young workers to try out their ideas or add valuable new skills to their resume,” Bitte says. To that end, Jobvite’s survey found that one-fourth of job seekers said they started a side gig to pursue a passion project. As Bitte says, “What could be more fun than transforming your favorite hobby into an actual money-making business?”
Ravenelle agrees about having a desired result in mind. “Develop an exit strategy,” she says. “What are your financial goals?” Ask yourself if you want to do this work just to pay off a bill — or to build up a savings reserve. “Figure out your goal and don’t get pushed into working more than you planned,” she says.
Things To Consider Before Choosing A Side Hustle
With all the side hustles out there, how do you choose one that’s best for you? “Today, the gig economy is booming more than ever,” Bitte says. “In addition to starting your own business, there are ample opportunities for you to pick something you love — whether it be dog-sitting, renting out your space, freelance copywriting, or selling old clothing online.”
Bitte also says there are a few boxes you should consider checking before making the side hustle plunge. She suggests asking yourself: Does it present a better career path for your goals? Are you able to perform both your full-time job and side hustle at the same? Do you have a healthy amount of savings and a contingency plan if things don’t work out? “I say chase your dreams, but always make sure you’ve got a plan B,” Bitte says.
Another aspect to figuring out which side hustle is best for you is choosing a service that classifies workers as employees, Ravenelle says. “Platforms such as Instacart, Hello Alfred, and MyClean pay workers by the hour, withhold taxes, pay the employer’s share of social security and Medicaid, and provide basic workplace protections (in terms of workers compensation and unemployment),” she says. “You may bring home less each week, but it’s a much safer situation in the long-run.”
What To Do With Side Hustle Money
According to Jobvite’s survey, nearly 60% of workers said they picked up a side hustle because they needed the money. So, now that you have a side hustle (or two … or three), you need to make sure to use that money wisely. “The same financial advice you hear everywhere still applies to side hustle money: Pay off high-interest debt and ensure that you have an emergency fund to cover three to six months of expenses,” Ravenelle says. “If possible, deposit your earnings in a separate savings account.” She also says to avoid tapping into this money to pay for daily expenses. “You don’t want to become dependent on working two jobs in order to pay your bills.”
And, Ravenelle says to make sure to document everything. “Keep track of your gig expenses and income down to the cent so you can maximize your deductions, or you may end up making a large tax payment to the government in April,” she says.
Balancing A Side Hustle With Your Full-Time Hustle
If you are working a full-time job and decide to start a side hustle to pay off your student loans, finding a balance between the two is key. “The most important thing to consider is how a side gig can impact your full-time job,” Bitte says. “First and foremost, confirm whether your current company will even allow it; that way, you can avoid getting fired or sued.” She says that although you may not be required to tell your boss, it’s a good idea to anyway, to avoid any potential conflicts of interest. “Most companies today understand — and probably even expect — that ambitious and hardworking employees could have a side hustle,” she says. “That said, picking up another gig could be invaluable by supplementing your income or rewarding you with new skills.” She says that as long as you’re willing to put in the work, the sky’s the limit on where you can take things.
Speaking of work, Ravenelle says there’s a reason it’s called a “hustle.” “Workers have to be constantly working or looking for work,” she says. “Remember also that platforms regularly pivot or close and workers have no recourse when that happens; the work you love today may not be available in the same quantity or at the same pay tomorrow.” Plus, she says to keep in mind that working a side hustle will cut into your time to relax or see family and friends.
Don’t Forget About Side Hustle Safety
In addition to all the fun — and surplus income — a side hustle can bring into your life, it’s also important to stay as safe as possible when hustling, so to speak. Ravenelle says it’s important to consider some of the situations you may encounter and how you’ll handle them. She says to think about: If an Uber passenger propositions you, or touches you, what will you do? If you feel uncomfortable completing a task for TaskRabbit, what steps can you take? “Ask the platform(s) what to do in the case of a criminally questionable task, or a sexually uncomfortable situation, and spend some time thinking about what you feel comfortable with and what you might do in response,” she says.
In general, protect yourself. “You wouldn’t start a Tinder date in a stranger’s home or car, but add the promise of payment and suddenly people are willing to clean an unknown person’s home or drive them around in their vehicle,” Ravenelle says. She suggests telling trusted friends where you will be, turn on location tracking on your phone, and make plans to check in every thirty minutes to an hour. “Don’t assume that app-based platforms have credit card information and home addresses on clients — it’s remarkably easy to set up a fake account and use a gift card to pay for these services,” she says.
All in all, there are more pros than cons when it comes to having a side hustle. But the only way to know is by trying one out for yourself.