Nowadays, it seems like side hustles are the new hobby. And why not? Everyone likes a little extra cash in their pocket, especially if it’s from an activity they enjoy. Whether a side hustle involves using your tech skills to help people set up their computers or selling photos you take cute pups, it can be a great way to build an additional revenue stream.
But beyond that cash, there are other, potentially surprising benefits to having a side hustle. Read on to learn more about them, as you dive into 11 benefits of having this kind of money-making venture.
What Is a Side Hustle?
A side hustle is a job or work, in addition to full-time employment, that helps boost an individual’s monthly income. It can involve ways to make money from home (say, as an online tutor or writer) as well as a part-time job outside the home.
Maybe you do some pet-sitting when people in your town go on vacation. Or perhaps you have a Sunday gig as a barista. Or maybe you hunt for treasures at local yard sales and resell them on eBay or Etsy. These are just a few examples of side hustles, which will vary based on a person’s skills and interests.
Side hustles have become popular in recent years, perhaps spurred by the rise of the Gig Economy, with many people doing freelance “gig” jobs. In fact, one recent survey found that about one in three Americans has some kind of side hustle going, and that most were started in the last three years.
The amount Americans earn via a side hustle varies tremendously, as you might expect. Of those surveyed who earn over $100 a month:
• 36.7% made between $101 and $500 a month
• 19.8% made between $501 and 1,000 a month
• 31.2% made $1,001 to $5,000 a month
• 7.5% brought in $5,000 to $10,000 a month
• 4.7% reported earning over $10,000 a month
Having a Side Hustle: 11 Benefits
An obvious benefit of a side hustle is the potential to generate extra cash each month. But, on top of earning money, there are additional benefits to taking on extra work outside the typical 9-to-5.
If you’re wondering, “Should I start a side hustle?” read on and explore the unexpected benefits below.
1. Improving Ability to Budget
Having a solid budget is a cornerstone of ways to improve your financial health. But getting that budget in place can be a challenge when money is tight, and it’s a struggle to make ends meet each month.
A side hustle has the potential to bring extra income, creating a little wiggle room in your budget. Creating a realistic budget may be easier with some more padding each month.
2. Developing Skills That Translate to Other Areas
Learning new skills is one of the more unexpected benefits of a side hustle. If a side hustler is starting to drive a ride-share, for instance, they may get a crash course in accounting as they learn to manage this income stream. Or if a side hustler’s gig is working weekends at a local café, they could develop important customer service skills they normally wouldn’t cultivate at their day job.
In other words, taking on an additional work endeavor can help you develop a more robust toolkit for future endeavors.
3. Improving Income and Financial Stability
Most people start side hustles to earn extra cash, and that benefit can’t be overstated. Additional monthly income can help give side hustlers a sense of financial stability. It could translate into less stress when the bills are due or even create a little breathing room to start saving and planning for the future.
With surplus cash in the budget, it may be time to set up a financial plan if you haven’t already. While it may be tempting to have fun spending the extra money, those funds could be put to work to help you build wealth.
4. Building a Stronger Work Ethic
Side hustles can be fun, but they are still a job. Spending more hours working can enhance your work ethic. After all, you are devoting what others might consider leisure time to a pursuit that will uplift your financial health. You should recognize your dedication and bask in the self-confidence boost you get along with the additional cash.
5. Improving Time Management Skills
It may be obvious to some, but taking on a side hustle means taking on more work hours. That translates into fewer free hours in the day, which means a side hustle can be a crash course in time management skills as well as cash management know-how.
With more responsibilities on your plate, you will likely get much more adept at being on time, meeting deadlines, and knowing how to pack in leisure activities in the time available. These are skills that will serve you well outside your side hustle.
6. Allowing You to Put More Into a Savings Account
Some start side hustles to help pay off outstanding debt or save for an upcoming trip, but earnings can be used to build up savings.
Once immediate financial needs are met, including bills and debt, surplus cash from a side hustle can go into a savings account. Not sure where to park your cash? Consider a high-yield bank account to help your money grow faster. You’ll likely find one at an online bank.
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Open a SoFi Checking and Savings Account and start earning up to 4.50% APY on your cash!
7. Allowing You to Better Prepare for an Emergency
One of the benefits of a side hustle is the ability to grow an emergency fund faster. As noted above, once immediate needs are met in a budget, extra cash from a side hustle could go into a savings account or help you grow your emergency cash supply.
Financial experts typically advise having at least three to six months’ worth of basic living expenses set aside in an easily accessed account. This gives you a good cash cushion if an unexpected medical or household expense crops us or if you were to lose your job. An emergency fund can definitely help provide a sense of calm in this way.
8. Allowing You to Pay Debt Quicker
If high-interest debt is eating away at paychecks, money from a side hustle can be a huge help. Interest from personal loans or high-interest credit cards can compound quickly, making it harder to pay off as the balance grows. The current average interest rate is almost 19% on new credit card offers, which can mean that those carrying a balance may have a challenging time paying debt down. With limited income, it may feel impossible to get on top of that monthly bill.
Using income from a side hustle to pay off debt could lead to paying it off faster or at least relieving some of the pressure around a budget.
9. Improving Ability to Reach Financial Goals
It may sound small to some, but even an extra hundred dollars a month can help side-hustlers as they work to reach financial goals.
For example, if you’re planning a vacation in the next year but don’t have enough surplus in your budget to save for it, you could take on seasonal gig work and put the paychecks towards the vacation. Without the work, you might not be able to take the vacation.
Beyond small savings goals, a side hustle can help you work towards financial goals like saving for a downpayment or putting more money into retirement.
10. Allowing You to Expand Your Network
One of the less-discussed benefits of a side hustle is the ability to meet new people and expand your network. Whether a side hustle is related to your day job or is something completely different, you’re bound to meet new people and create new connections.
While it may seem trivial, small connections can lead to many benefits, including more work, new friends, or a new career opportunity.
11. The Opportunity to Do Something You Love
A side hustle brings in more money, but it can also reignite someone’s passion for a hobby or activity.
Because it’s outside their day job and not their primary source of income, you can experiment with turning a personal interest into an income source. If you don’t enjoy your side hustle, it can feel exhausting. But working on something you love might not even feel like work.
For example, a nurse might love quilting in their off time and decide to open an Etsy shop. If they were already using their spare time to quilt for family and friends, now they can keep doing what they love and making a profit off the sale of their quilts. It’s a win-win! Who knows? Some side hustles become a person’s main job over time as their network and their skills grow.
The Takeaway
While the biggest benefit of a side hustle is bound to be the extra cash it brings, there are plenty of secondary benefits. From plumping up an emergency fund to meeting new people, a side hustle can be both a key to financial freedom and an avenue for exploration and personal growth.
Looking for a place to stash that extra side hustle cash? SoFi can help with an online bank account that will help your money grow faster. When you open a Checking and Savings with direct deposit, you’ll earn a competitive APY and pay no account fees.
FAQ
Why is a side hustle important?
Having a side hustle can generate more income and help people pursue something they’re passionate about on the side. It also can build your skills and open up new networks and opportunities.
Is it worth having a side hustle?
If someone has a side hustle they enjoy and it generates extra income without taking up every last minute of their day, it may be well worth it. However, deciding if a side hustle is worth it is ultimately up to the individual.
How much does the average side hustle make?
The median amount earned by a side hustle is $200 a month, but many make considerably more. That said, $200 is a nice sum to help pay off student loans or credit card debt faster, or to put towards a vacation fund.
Photo credit: iStock/visualspace
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