We've all heard the timeless mantra that if you work hard, you'll inevitably get ahead. And while that's generally true, sometimes one income just isn't enough. In fact, a 2019 Bankrate survey shows that a whopping 45% of Americans have side hustles, earning an extra $1,122 per month on average.
An even more startling figure: 40% of millennial respondents say they earn more than half their income from side gigs. Whatever your financial reasons for a side hustle — from paying off student loan debt, to saving for a vacation or mortgage down-payment — extra work can significantly boost incomes and strengthen financial futures.
Silvia Roldan-Kulp is one such millennial who engages in side hustles to supplement her income and boost her business aspirations. The 31-year old medical office translator has been a nanny on the side, and is now launching her own hat design and import business, Yaku Wear.
"The extra income from being a nanny helped me afford to travel overseas, put a downpayment on a house, and gave me seed capital to launch my Yaku Wear hat business. When you're just starting out, it's hard to achieve most of those things without extra income."
The Federal Reserve's Survey of Household Economics and Decision making lists selling items online (such as on Ebay or Craigslist), household services (such as yard work and cleaning), and providing personal services (child care, elder care) among the most popular second jobs. Surprisingly, driving for ride sharing services and renting homes or rooms via the likes of AirBnB are much less common side gigs. And very few people seem to be engaging in professional-caliber or career-impacting work on the side.
Silvia Roldan-Kulp is in the minority among workers with side gigs: she hopes to eventually leave her office job and transition full-time into running Yaku Wear.
"I still need the income from my day job, so I'm building Yaku Wear slowly. My free time, weekends and evenings, are being dedicated to my hat business, so that I can bring that dream into fruition sooner."
Our time and ability to make money are precious commodities. Like Silvia Roldan-Kulp, many of us have competing priorities for our time and skills. Clarify your goals and your options by asking yourself a few key questions:
Taking a minute to think through these questions can have a massive impact on how much benefit you get from your side hustle, since these will clarify both your short- and long-term expectations for the extra income source. It'll also allow you to place your side-gig options into two buckets: One for those that simply help generate quick cash and allow you to stay focused on your day job, and another for side gigs that can help you build something bigger.
Being deliberate about why you need the side gig, and what exactly you hope to gain from it, can lead you to the best choice. Silvia Roldan-Kulp says that with her degrees in business and tourism management, she had a plan in mind when she started working as a nanny, and knew it wouldn't be a long-term effort.
"I knew I wanted to start Yaku Wear many years ago, but I didn't have the time or money then. I used my second income stream as a nanny to help me build up to a position where I could have the resources and free time I needed to launch my business."
A side gig can simply generate extra income now, or it can become a successful financial bridge for your future. Like our primary careers, how and where you apply your time and talents is an equally important consideration when choosing a side job. If all you need is fast and easy cash, there are plenty of good reasons for renting out a spare bedroom or driving for a ride-sharing business as a side gig. But if you have longer-term goals in mind, consider how your side gig can complement them. As they say, time is money, and how we spend the former to earn the latter has myriad impacts upon our personal and financial well-being.
—By Janet Alvarez, financial journalist
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.