Having a 9 to 5 job is well and good, but people are increasingly finding themselves having to supplement their income. They say that necessity is the mother of invention, and this situation led to the advent of what is now popularly known as the “side hustle”.
On social media platforms, these side hustles are embraced as using your hobby to earn an extra buck, or it could be a venture that you’re sure will catapult you to the millionaires’ club.
On the ground, however, the situation is anything but. In truth, people pick up a side hustle simply because making ends meet with a single source of income has become taxing.
Financial Reasons
According to a recent report by Betterment, financial reasons are what propel people into this line of business, as opposed to the embellished social media package of earning from your hobby.
Come to think of it, you could still indulge your hobbies without making money from them if you were financially stable, right? So, if we’re being honest to ourselves, let’s cut the sugarcoating and call a spade a spade.
The Betterment study had 1,000 participants of ages 25 and above, all working in what is known as the gig economy. This term refers to the group of people who work on their own terms and maximizing on what wouldn’t have been an income source a few decades ago.
According to Nick Holeman, a financial planner at the investment firm, although most side hustlers praise the flexibility of whatever it is that they do, it shouldn’t get lost on us that they rely on it to contribute to part of their livelihood.
And going by the study, saving for retirement is what drives people into looking for that extra job, roughly about 1 in 3. Of the entirety of side hustlers in the report, a quarter of them are yet to save up $1,000 as part of their retirement package.
These side jobs, the study found out, are increasingly becoming beneficial to people in their golden years. 75% of those aged 55 and over lean on the gig economy to have some work to do even after they leave their formal jobs, and if they can bring some cash in even after retirement, then why not?
For the younger generation, they feel that not even having two sources of income will sustain them in later years, but unfortunately, it’s because they’re not preparing for it. 20% of them also admit that even after hanging up their boots, they’ll still need to work on the side to maintain their already well-established living standards.
The Debt Menace
Do you want to know what else drives people into these extra jobs? Debt. Results from the study show that at least 70% of side hustlers are in it to pay off their debt, in addition to all the other reasons.
Of these, 15% have arrears totaling to over $50,000, and that’s not including mortgage. Shocking much? But sadly, that’s the reality in the US.
40% of side hustlers are burning the midnight oil to pay off credit card arrears, while many others do so to get their student loans behind them.
All the same, Holeman notes that the fact that people can leverage what they earn on the side to meet their financial obligations is a positive trend.