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MARKETANALYST.US / ECONOMY & WORK

4 Signs Your Side Hustle Might Be Here to Stay Longer Than Expected

You should try to have three times your annual pay saved by the time you're 40, and 10 times your annual salary by the time you're 67.
PUBLISHED APR 21, 2024
Image Source: Photo by Buro Millennial | Pexels
Image Source: Photo by Buro Millennial | Pexels

Having a side job can help you make some extra money, which is always handy. But sometimes, you find yourself needing that extra income for a while. According to financial expert Taylor Kovar, "it might mean you need more money coming in if you're always struggling to pay the bills with your main job." Therefore, having a side project could be beneficial. When money is tight, you may have to continue working odd jobs like driving people around, grocery shopping, meal delivery, and dog walking. It's possible that you'll think this additional labor will only be necessary temporarily. However, things could not work out that way. Here are four signs that your side hustle might be sticking around longer than you first thought.

Image Source: Photo by Andrea Piacquadio | Pexels
Image Source: Photo by Andrea Piacquadio | Pexels

As Kovar demonstrates, taking up a side gig might provide you with additional funds to assist with unforeseen expenses or unplanned payments. Your finances may be less stressed with this more money.

It's important to have emergency savings equivalent to three to six months' worth of living expenses. It's a good idea to use the money you make from your side gig to contribute to your emergency fund, but there are other ways to have additional cash on hand as well consistently. If you don't have a lot of money saved right now, don't worry, you're not alone. According to a survey done by the Federal Reserve in 2022, the typical American family only had about $8,000 in their bank account.

Taking on a side gig could help you increase your income if your primary work doesn't offer many opportunities for advancement or pay increases. However, financial expert Angela Ashley warns that if you find yourself in a situation where you simply cannot afford to give up your side gig, that's a dead giveaway that you will be trapped with it indefinitely.

"If you're planning to keep working forever because you can't afford to stop, it probably means you haven't saved up enough, so the side job becomes a must," she explains. She continues, "This could be particularly true if giving up your side gig would mean you couldn't maintain your current lifestyle." Ashley says, "Sometimes, doing side gigs is the only way to make ends meet. It becomes a routine because people get used to a certain lifestyle."

Just so you know, as of late 2023, the typical American worker earned about $1,145 per week, or around $59,540 per year, according to the Bureau of Labor Statistics.

Image Source: Photo by Vanessa Garcia | Pexels
Image Source: Photo by Vanessa Garcia | Pexels

Ashley highlights how hard it may be to make ends meet when you don't have to work as hard to pay off debt and you have a lot of it. She stresses how challenging it may be to manage high-interest debt, like credit card debt. "The cycle of debt often means you need to earn extra money just to keep up," she says. According to Experian, as of February 2024, the average American must pay about $1,225 per month to pay off debts such as credit cards, mortgages, and auto loans. And that's not all—with an average monthly payment of roughly $203, many folks also have school debts to worry about. You may need to continue doing that side gig for some time if your debt is greater than you can manage.

Are you tired of losing control of yourself in the pool of debt? Here are some debt relief options to consider|Pexels|Photo by Mikhail Nilov
Photo by Mikhail Nilov | Pexels

Ashley frequently meets elderly people who either start saving too late or haven't saved enough for retirement. It's an indication that they may need to continue working into old age.

In circumstances such as these, your retirement income from your side gig may wind up being your primary source of support.

"If someone hasn't been putting money into retirement accounts like a 401(k) or IRA, it probably means they haven't been saving up for retirement or haven't made it a priority," she explains. "Without money coming in without you having to work, you'll have to keep working."

A poll conducted in 2022 found that slightly more than half of families were saving for retirement. Additionally, the average retirement account had about $86,900.

According to Fidelity, you should try to have three times your annual pay saved by the time you're 40, and 10 times your annual salary by the time you're 67. Doing a side gig can be a good way to add to your retirement savings. But if you can't save up enough, you might never be able to retire fully.

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