Many of us have had that moment where we think, “I simply need to earn more money.” If you are feeling the pinch of rising expenses plus a static income, you might consider getting a second job to boost your monthly take-home pay.
This pursuit is on the rise in America. According to the most recent U.S. Census data, the number of people holding multiple jobs is approaching 8%. That figure, however, may not capture the full impact of the Gig Economy, and all of those who sometimes hop behind the wheel of an Uber or otherwise do freelance work.
Working more than one job can definitely add to your bank account, but it can also be a challenge. To help you better understand the pluses and minuses of moonlighting, read on to learn:
• What is moonlighting and how does it work?
• Why do people take on a second job?
• What are the pros and cons of a second job?
• How can you make moonlighting work?
What Is Moonlighting?
Moonlighting is defined as taking on a secondary job in addition to a primary full-time job. (Typically, second jobs were done at night, by moonlight, after one’s day job.) That extra job might require you to be on-premises, or it could be a project that can be done from home.
These days, some people use the term loosely. You might hear someone say, “I moonlight editing college application essays” or “I moonlight now and then at a catering company.” The hours may be variable and flexible, but it’s an additional form of employment that brings in money.
Generally, as long as moonlighting doesn’t impact an employee’s performance while they’re on the clock, employers will allow moonlighting. However, company rules, such as a non-compete policy, could bar full-time employees from moonlighting jobs in similar industries.
Having a second job can accomplish a variety of goals, from paying down credit card debt to funding a new car purchase to creating financial freedom if you’re a young person still living at home.
How Does Moonlighting Work?
Moonlighting jobs can take many different forms. Typically, it’s a part-time job in addition to full-time work. It may or may not be related to your primary job. For instance, it could include any of the following possibilities:
• Waiting tables on the weekend, outside of a 9 to 5 job
• Working as a music teacher in a school, but teaching private music lessons after hours
• Taking on gig work, like food delivery, outside of working hours
In some cases, moonlighting may offer some of the best ways to make money from home. In your spare time, you might tutor, design websites, edit copy, make jewelry, analyze data, or do any number of other tasks.
Having a second job or moonlighting typically involves dedicating some time and energy to the pursuit on a regular basis. In this way, it differs from passive income ideas, which could include buying stocks and receiving dividends or renting out a room in your home.
Reasons Why People Take a Second Job
People may take on moonlighting work for any of the following reasons:
• Financial. Bringing in more income could help pay off debt faster.
• Personal. A moonlighting job may allow someone to explore an area of interest more seriously or provide an antidote to a boring but profitable day job.
• Professional. People who moonlight may learn new skills that benefit them in their full-time work or help them switch industries entirely.
Recommended: How to Earn Residual Income
Pros of Working a Second Job
While working two jobs will take more of your time and energy, there are definitely benefits to doing so. Here’s a closer look at the pros:
More Money
No surprise here: One of the most immediate (and most sought-after) benefits of moonlighting is earning additional income. Having some extra cash can help when you’re budgeting for basic living expenses, especially in times of high inflation.
Beyond that, the additional cash can allow you to do anything from paying off debt faster to building an emergency fund to starting a travel fund.
New Skills or Benefits
Have you been thinking about switching to another line of work, like retail? Working in a store on Sundays could let you see if it’s a good fit. Or is there a project, like web design, that you dream of becoming your full-time career? Freelancing at that pursuit a few nights a week might lay the foundation. Moonlighting work doesn’t necessarily have to be related to a person’s full-time job, so it can be a great tool to explore a hobby or interest with less risk. You can build your resume and hone your talents.
Moonlighting work may also provide benefits a full-time job doesn’t. If someone is passionate about art, they may take a moonlighting job at an art store to score an employee discount, saving them money on their hobby.
Less Financial Stress
If you’re anxious about money, join the club. One recent survey found that a stunning 90% of Americans say that money influences their stress level. An additional job could be a way to achieve financial security, as you’re not relying solely on one employer for all of your income.
The money you make moonlighting might be a way to pay off debt faster without using savings, whether that means whittling down your student loans or a credit card balance. You could save it and decide where to keep an emergency fund in case an unexpected major bill comes along. Or you could funnel the funds into a retirement account. In any of these situations, the extra money can help increase your financial fitness as well as your peace of mind.
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
Cons of Working a Second Job
Taking a second job can surely be enticing for the extra income alone, but that doesn’t tell the whole story. There are some cons to working two jobs that you are wise to consider before you begin moonlighting. For some, the following downsides may prove to outweigh the benefits.
Less Time for Self, Friends, or Family
More work will mean less free time. Losing that free time could disrupt your ability to maintain work-life balance while increasing your stress. Not having time to see friends and family or pursue hobbies could have a negative effect on your wellbeing.
Increased Physical and Mental Tiredness
Working two jobs, whether physically demanding or not, can lead to exhaustion. Without the time to recharge and rest, moonlighters may experience burnout.
Reduced Focus at First Job
If moonlighting leaves you exhausted or distracted, it could cause you to be less successful at your primary job. This, in turn, could jeopardize your main income stream.
Violating company guidelines
Moonlighting can put your main job in danger if you go against existing guidelines. Let’s say you are a lawyer for the Little Beverage Company, and you signed a non-compete agreement. If the Big Beverage Company asks you to review some documents for them as a freelancer, doing so could be problematic.
More paperwork
As you begin earning income for your second job, you will need to keep track of that money, any expenses you incur while working, and what taxes you owe.
Tips to Make Working Two Jobs Work
There are pros and cons of working two jobs. However, if you choose your additional work carefully, moonlighting can be a successful endeavor. Consider these tips when searching for moonlighting work:
• Pick a passion. When a second job is boring, it might be more exhausting. Instead, consider a gig you are passionate or excited about as your moonlighting gig.
• Start small. Taking on too many hours of moonlighting work upfront can lead to burnout. Try starting small, with only a few additional hours a week or even a seasonal position. If it goes well, you can ramp up your hours.
• Double-check employer policy. Before signing up for a moonlighting job, check with policies at your full-time position. There could be non-compete or conflict-of-interest clauses that prohibit employees from working in certain fields. It can be best to follow these guidelines when you’re pursuing additional hours elsewhere.
• Keep good records. It’s possible that your moonlighting job will be handled as a W2, meaning your employer takes out taxes, but it’s likely this is freelance or contract work that involves an IRS Form 1099. Keep careful track of earnings, expenses, and when estimated taxes are due and for how much.
The Takeaway
Taking on a second job, or moonlighting, can be a great way to earn some extra cash when money is tight or you want to save towards a specific goal. This kind of additional work can also help you explore a personal interest that might blossom into a new career direction. However, working a second job, even if it’s a small commitment of hours, can throw your work-life balance out of whack, so proceed with caution to avoid burnout. The goal is to amp up your earning power, not exhaust you.
If you’re looking to bulk up your bank account, take a look at what SoFi offers. When you open our Checking and Savings with direct deposit, you’ll earn a competitive APY, and pay no account fees. Plus, smart features like automatic saving can help make it simple to manage those multiple paychecks.
FAQ
Is it unhealthy to work 2 jobs?
Moonlighting can be challenging for individuals who already struggle with work-life balance. With two jobs, it may be hard to pursue a personal life or relax. It might be wise to start a second job with a small commitment of time, see how it goes, and then gradually add more hours.
How do I survive 2 jobs?
Surviving two jobs may hinge on setting boundaries for both, as well as finding enjoyable work that’s not too physically or mentally taxing. Self-care is obviously important. Another consideration is making sure that you are not violating any non-compete or conflict-of-interest guidelines at your primary job so as not to jeopardize your status.
How does tax work for 2 jobs?
If both jobs are W-2, not contract, the employers will withhold taxes for the employees. However, if for your moonlighting job, you will receive a 1099 as a contract worker, you should set aside and pay your own taxes. Also, taking on two jobs could boost you into a higher tax bracket, which could mean being taxed at a higher rate.
Is it illegal to work two jobs?
Unless explicitly stated in a job offer or contract, it is not illegal to work two jobs. Do make sure you are not violating any non-compete or conflict-of-interest stipulations at your primary job. Also know that most contracts are “at will,” meaning an employer has the right to fire an employee if a second job interferes with their performance.
Photo credit: iStock/Phynart Studio
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK0722023
