Side hustles are controversial. Some people swear by them as a means for getting ahead (myself included). Others are highly critical of them - calling them toxic and arguing that a society that pays decent wages shouldn't need to have a side hustle culture.
Then there are the personalities, such as Gary Vaynerchuk, who live the hustle on daily videos and podcast episodes.
This culture of the side hustle has been growing in popularity, but it's always existed. People have been working second jobs or doing odd jobs for money since the dawn of time. However, today, the side hustle is easier than ever to both find and popularize. The internet and mobile apps have made it possible to earn on your own time - something that's never really existed before.
However, this has led to a culture that might not be healthy.
Let's explore what makes a good side hustle, and understand why working a side hustle might be the best thing for your budget - but also be aware of the negatives as well.
What Makes A Good Side Hustle
When assessing a side hustle, there are three key factors to consider. A solid combination of these factors will help you find the best side hustle for you.
- Earning Potential
- Scheduling
- Growth
With earning potential, you want a gig that pays well (or at least the most you can find). For example, do you take a job that pays $10 per hour, or a side hustle with the earning potential of $50 per hour. Of course, the higher the earning potential, the more lucrative the gig is. But that usually comes at a cost.
The cost is typically scheduling. When can you do your side hustle? Can you do it 100% on your own terms, or do you need to clock in and out on a schedule?
This has always been the drawback of a second job. With a second job, you typically have a schedule, set hours, and need to be there for your shift. The rise of the side hustle has made scheduling more flexible, but some side hustles still require set times and shifts.
For example, you can be a rideshare driver and essentially work whenever - total flexibility. However, if you want to deliver food, you likely won't get much traffic in the middle of the night or early morning before lunch.
Finally, you need to assess growth potential. For some, this may not matter at all - it's all about the income today. But for others, you may want a side hustle that can grow and maybe help you achieve other goals - like a career change or even early retirement.
How Side Hustles Can Be The Best Thing For Your Budget
The key factor here across all side hustles is money. You're doing this to get paid - and that payment can be the best thing for your budget.
According to Northwest Mutual's 2018 Planning and Progress Study, the average American has $38,000 in personal debt - excluding a mortgage! Only about 23% of Americans say they have no debt. But here's the scarier part. About 20% of Americans say they are spending 50-100% of their monthly income on debt repayment.
That leaves no room in the budget for basic household expenses, let alone discretionary spending. And it usually means more debt is coming. This is where the side hustle can be impactful.
According to a Student Loan Hero report on monthly budget expenses, American household's spend the following on their debt:
- $365 per month on a used car loan
- $351 per month on a student loan
- $156 per month on credit card payments
And not everyone has every payment - these are averages. But what if you could not only minimize your debt payments, but use extra money to pay them?
What if you could earn that extra $200 - $600 per month to close that gap on your loan, or credit card, or car payment? It's possible - and that's why a side hustle is so useful.
You can budget and cut spending as much as possible - but your spending will never be $0. With a side hustle, your income potential is limitless.
Finding Side Hustle Opportunities That Make Sense
They key is finding side hustle opportunities that make sense for you and your situation. There are side hustles where you can earn as little as $10 per month, to awesome side gigs that pay over $1,000 per month!
What will work best for you goes back to thinking of the formula that makes a good side hustle.
Do you need high earning potential now, or can you wait and grow something (like a blog). If you need income today, you might be limited in what you can do - or at least what you can grow.
Do you need huge flexibility in your schedule of when to work, or can you work set hours? Once again, this may limit your side hustle choices.
A lot of people dismiss side hustles like ride sharing - saying the net earnings per hour are low. And you may be right - but note that you actually have net earnings, that you earned on your own terms, that you now have money you previously didn't have.
So, while a side hustle might not be glamorous, it can fill the gap in your budget to help you achieve your financial goals.
Don't Dismiss The Negatives
Let's not act like side gigs are all extra money and no work. There are negatives involved.
If you drive or deliver, you have your own expenses to cover - gas, maintenance, extra wear and tear on your vehicle.
You have tax implications on your earnings. You are self employed for most side gigs, meaning you might get an unexpected tax bill come tax season. You also have write-offs and a more complicated tax situation to begin with.
There's also a huge burnout factor. Working more is tough on people - especially if you've already put in 40-50 hours per week at a day job. It can also be challenging for families (though I've seen my fair share of food delivery drivers using their family to assist them or at least be along for the ride).
Final Thoughts
You likely won't get rich side hustling (though it does happen). But a side hustle can be that tool you need to fix your budget and get back on track financially. Maybe it enables you to pay off debt? Maybe it enables you to save for retirement? Or even a shorter-term goal like buying a new car or house?
Before you dismiss the idea of earning more as a waste of time (or even being toxic), realize that this could be the best thing for your budget.
