I’m a Financial Expert: 5 Signs You Need a Side Hustle Now
Written by
Martin Dasko
Edited by
Chris Cluff
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With 71% of Americans living paycheck to paycheck, according to a recent GOBankingRates survey, it’s easy to tell why side hustles have become a mainstay in the economy.
While a side gig can be a creative outlet that gives you something to look forward to in your spare time, many people are realizing that they have to pursue one just to get by. Your side hustle can help you pay the bills and provide some flexibility so you can treat yourself more often.
If you’re uncertain whether a side hustle makes sense, The Money Manual founder and CEO Todd Stearn offered the red flags you’ll want to look out for.
Living Paycheck to Paycheck
According to the GOBankingRates survey, nearly 50% of people said they always live paycheck to paycheck, and 21% more said they have to do so part of the time.
If you can barely scrape by with your bills, consider bringing in a new income stream so you don’t continue living like that.
“This is probably the most obvious one,” Stearn said. “If the thought of missing a few days of work with no pay puts you in a panic because you would then have to decide which bills to pay late, you may need a side hustle to help you get ahead.”
A side gig can provide a financial buffer so you don’t constantly stress about paying your bills on time. You don’t want to rely on credit cards to cover your bills because that could put you in debt. Once you get stuck with high-interest credit card debt, it can be challenging to pay it off.
You Can’t Save Any Money
When you’re barely getting by, chances are that you’re not able to save any money. This means you would be in a dire financial situation if you were to experience any kind of unexpected expense.
“When you’re living paycheck to paycheck, everyday bills feel like an emergency,” Stearn said.
You never know when you can get hit with a surprise expense, like a flat tire or medical emergency. You want to ensure that you’re prepared for the worst-case scenario so you don’t end up racking up massive amounts of debt.
“You have a steady income but aren’t meeting savings goals,” added Jeff Rose, CFP and founder of Good Financial Cents. “For example, if you can’t set aside at least 20% of your income for savings, as recommended by some experts, starting a side hustle could help bridge that gap.”
You’re Not Funding Your Retirement
You want to make decisions today that will help your future self. This involves setting aside the funds for your retirement to enjoy your golden years. If you’re not saving up for retirement right now, you’re missing out on the power of compound interest.
“If you aren’t investing money in your future because you simply don’t have it in your budget to spare, you may need more money to work with,” Stearn said.
Your future self will thank you when you fund those retirement accounts because you don’t want to be forced to work well into your golden years.
You Can’t Afford To Treat Yourself
Just because inflation is high and things cost more, it doesn’t mean you can’t still treat yourself. You work hard for your money and want to be rewarded occasionally to have something to look forward to when you’re working away.
“Vacations, gifts for the special events of friends and family, or even the occasional meal out may not be classified as ‘needs,’ but being unable to afford such basic ‘wants’ can be stressful and frustrating,” Stearn said.
A side gig can fund your dream vacation or allow you the opportunity to go out for dinner more often. You get to decide how you spend your extra funds, and you can choose to indulge a little.
Your Main Job Just Isn’t Enough
The experts agree that you’ll want to pursue a side gig if your main gig isn’t enough to get by. The harsh reality is that with the higher cost of living, you could be in a position where you’re not earning enough at your full-time job to achieve your financial goals.
Your side hustle could help you reach your financial goals and give you more options. You never know when a side venture could become lucrative and replace your day job. The goal is to find a side hustle to pursue in your free time to help improve your financial situation.
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