8 Key Signs You Need a Side Gig in 2024

We may live in a gig economy, but that doesn’t necessarily mean everyone wants a side gig. Yet the fact is, depending on your financial situation, you may need one.

Financial goals that never quite seem to be in reach, struggling to pay bills and a host of other reasons can signal that your income from a regular job or current side gig just isn’t cutting it.

Financial experts explain the key signs you need a side gig in 2024.

If you’re just eking by on your income every month, with no buffer in the form of an emergency fund, you could probably use a side gig, according to Mike Kojonen, the founder and owner of Principal Preservation Services LLC. 

“An ideal emergency fund covers three to six months of expenses, providing a buffer against unexpected financial shocks,” Kojonen explained. “If you’re unable to build this fund due to your current income, a side gig can be a strategic move to bolster your financial safety net without compromising your regular savings goals.”

Facing significant debt without a clear payoff plan is another strong indicator that you can use a side gig, Kojonen said. 

“High-interest debt can cripple financial progress, and a side gig can serve as a targeted strategy to accelerate debt repayment.”

In his experience, clients who tackle debt with additional income from side gigs often experience not just financial relief, but a boost in confidence and control over their financial future.

Another clear indicator that a side gig is a good idea is when your current savings rate is not on track to meet your retirement goals. Kojonen said that with careful projections, it’s not hard to figure out how much you’ll need to retire based on your current or desired retirement lifestyle.

“If projections show a significant shortfall, securing a side gig can provide the additional income necessary to close the gap. Additionally, the psychological and financial stress of living paycheck to paycheck signals the need for expanded income sources.”

One of the clearest signs it’s time for a side gig is if you’re finding it difficult to pay your bills every month, according to David Rafalovsky, CEO of Oxygen, a comprehensive financial platform. 

“A side gig can supplement your income, providing the extra cash needed to comfortably cover your living expenses. This could range from paying for utilities, rent or mortgage, groceries, and other necessities.”

Everyone has financial goals, whether it’s buying a house, going on a dream vacation, or building an emergency fund, Rafalovsky said. If your current income isn’t allowing you to save towards these goals, a side gig can be the solution. 

“The additional income can be directed towards these savings, helping you achieve your goals faster,” he said. “For example, if you’re planning to buy a car and need to save for a down payment, the income from a side gig can be dedicated to this purpose.”

A side gig isn’t just about the money, however, Rafalovsky said. It can also provide you with new challenges and opportunities to learn. 

“If you’re feeling unfulfilled or stagnant in your current job, a side gig in an area you’re passionate about can bring a sense of satisfaction and growth,” he said. “It can help you acquire new skills, expand your network, and could even open doors to new career paths.”

If you’re consistently relying on credit cards for basic living expenses or to cover emergencies, it’s a clear indication that your current income might not be sufficient, according to David Brillant, a certified specialist in estate planning, trust, and probate law with the Brillant Law Firm, and publisher of the Brillant Law Weekly Tax Digest. 

“In my experience, dealing with tax implications for individuals and businesses alike, I’ve seen how reliance on credit can lead to a precarious financial situation, prompting the need for supplementary income,” he said.

In today’s economy, relying solely on a single source of income can be risky, Brillant said. 

“For example, during the COVID-19 pandemic, many of my clients found themselves reevaluating their financial strategies due to sudden job losses or shifts in their primary income sources,” he said. “Those with side gigs or diversified income streams were better positioned to weather the financial uncertainties.”

Though side gigs may help solve many financial issues, Brillant warned that there are tax implications to consider, too. 

“From a legal and tax perspective, it’s crucial to consider how additional income will affect your overall financial picture, including tax liabilities and estate planning,” he said. “Be proactive in seeking advice on how to effectively structure and manage additional income streams to align with your broader financial goals.”

So long as you put some thought into how you go about your side gig, it might just be the answer to your financial woes.