We have all known people who are always working at least two jobs at the same time. A housekeeper who sews or bakes in her spare time. The accounts clerk, who has a small stable of private clients and provides bookkeeping services. Moreover, and in this the 21^st century, there has been a growing shift toward gig work, which allows workers greater independence and control of their work lives.

The shift toward gig work and the gig economy is making the adoption of a side hustle more acceptable, particularly among professionals, who in the eyes of most should be making decent money. However, there several reasons why everyone needs a side hustle. In this article, we highlight five benefits.

 

1.  A single income source may not be enough

These days and in many countries around the world, the cost of living has increased considerably over a very short period, but incomes have not increased at the same rate. During this pandemic, the increase in living costs has been more dramatic, as almost every supply chain has been disrupted, resulting in higher supply costs and prices at the cash register.

Depending on the country in which you live, the situation can be compounded when exchange rates are also considered. Again, rising costs, plus a devaluing currency, can increase the prices you pay for goods and services locally. As a result, budgets have become tighter – to ensure that basic expenses are covered – and with not as much wiggle room for discretionary spending.

A side hustle is excellent way to augment your income. When you are struggling to ensure that your basic expenses are covered, that can be a stressful experience. Income from a side hustle can provide you with greater peace of mind – along with a bit more money in your bank account.

 

2.  Good to have multiple sources of income

If there is anything that the pandemic has taught a lot of us is that our jobs might not be as secure as we think. With country-wide shutdowns, and economies grinding to a halt, many businesses had to cut back their operations, which meant either furloughing staff, or laying them off altogether. Hence many households found their monthly income had reduced significantly, or their income became intermittent, or at worse, it no longer existed.

A side hustle could provide a much needed and welcomed cushion, particularly in these uncertain times. For example, although vaccines now exist for the COVID-19 virus, new variations continue to emerge, and shutdowns could re-occur. However, a new and different crisis could occur at any time, and so it is prudent to not have all of your eggs in one basket.

 

3.  Extra money can be used to pay off debt (faster)

With the majority of us carry some form of debt, be it student loans, a car loan, mortgage, or even credit card debt, it can be stressful to ensure that sufficient funds are available to settle the monthly payments. However, wouldn’t it be wonderful to be able accelerate the payments, and come out faster from under all of that debt? Income from a side hustle can help to you achieve this.

Accelerating the payments can be done in different ways, depending on the amount and the rules and structure of the loan. For example, you can arrange to pay more that the agreed amount, and if the loan repayments are being calculated on a reducing balance, you can settle the loan faster, and thus pay less in total. Alternatively, if you have some extra money at hand (thanks side hustle!), you may be allowed to make a lump sum payment against the principal for the loan. When a lump sum is paid, a number of scenarios may occur, including, the size of the monthly payments going forward may be reduced, and/or the number of months needed to fully conclude the loan arrangement may be reduced. In other words, income from a side hustle may give you some options with regard to better managing loans you might be carrying.

 

4.  Extra money can be used for investing

It is becoming increasingly important to have investments, and ideally, a diversified investment portfolio. Unfortunately many of us still think that you need to have a lot of money in order to begin investing. Although that is not the case, for certain types of investment, you do need to have some a healthy amount of funds available.

Although you may be able to allocate money from your main income stream towards investing, it may be modest at best. Income from a side hustle can help you accelerate the rate at which your ‘investment fund’ grows, and allow you to consider, and ultimately secure, a wider range of investment options.

 

5.  Can increase breadth and depth of work experience

Finally, and this point is not directly money-related. In your main job, the odds are that your role and responsibilities are clearly defined, and so the activities that you undertake tend to be limited to that construct. In engaging in a side hustle, you may choose to use the skills that you use for your main job, or try to leverage some of your lesser-used skills, or even a hobby. Nevertheless, and through a side hustle, you are likely to have opportunities to work for different clients, strengthen your skills and capabilities, as well as broaden and deepen your experience.

It is also useful to note that on being in someone else’s employ, they call the shots. They decide how much you get paid, whether you should be promoted, what position within the organisation you hold, what skills of yours they need, etc. Also, many of us get pigeonholed. We are excellent at our jobs, and so the organisation just wants us to do that, and that alone. In having a side hustle, you are likely to feel as if you have a bit more in control of your professional life and future. You can take on challenging assignments, or project that encourage you to grow, and ultimately, to have a more meaningful professional (and possibly more lucrative) life.

 

 

Image: Investment Zen (flickr)