Americans are increasingly turning to side hustles to make more money amid economic uncertainty and persistent high inflation.
Some 44% of Americans are working at least one extra job to make ends meet each month, according to survey from Insuranks, a small business insurance marketplace. The online survey of more than 1,000 adults working at least one job took place from May 31 through June 2.
Another 28% said that they took on a secondary gig due to inflation — the highest the U.S. has experienced in 40 years — driving up costs.
The survey found that those who work a side hustle spend, on average, 13 hours per week on their second job, and bring in an extra $483 per month.
Before pursuing a side gig, people should establish their goal, whether that is to earn more money, explore a creative outlet or build skills that they aren’t using in their full-time job, said Gorick Ng, author of “The Unspoken Rules.”
“There is more to life than just a single W-2,” he said, adding that he sees people using side hustles to fulfill many dreams from financial freedom to learning new skills or having a creative outlet.
If your goal is to make more money, a side hustle might not always make the most sense, said Paula Pant, host of the podcast “Afford Anything,” during CNBC’s recent Own Your Money (… Before it Owns You) event.
If your main job is in a high-paying profession, it may be a better use of your time to go for a promotion or consult within your area of expertise instead of launching a side gig that’s entirely different.
“Choose whatever is the most time-efficient and energy- and spirit-efficient way of earning more,” she said.
Where you are in life should also factor into your decision to start a side hustle, according to Anh Tran, a certified financial planner and managing partner at SageMint Wealth in Orange, California. For example, if you’re a college student, you may have more time to devote to a potential side gig than if you’re trying to start a family.
It’s important to consider the amount of time and effort launching a business will take versus the potential payoff, Tran said.
“What are you going to have to put into it to get a return, and does that make sense for you from a financial standpoint?” said Tran.
On the other hand, if you’re in an industry or occupation where there isn’t a whole lot of financial upside, a side hustle could be an efficient route to earning more.
“At the end of the day, ultimately what matters is the size of the gap between how much you earn and how much you spend,” said Pant. One way of increasing that is to bring in extra income, especially if you don’t want to cut spending.