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Side hustles are getting increasingly popular in the US. Many people work a normal job during the day and then work a part-time job, gig, or other income-generating opportunities in the evening in order to live the American dream.
Some people opt to work as a freelancer or start their own businesses, while others choose to work part-time to build a side income.
It's no secret that working a side hustle has the advantage of allowing you to earn additional money. This extra work may make sense if your primary job doesn't allow you to work overtime hours or take on other assignments to get paid today.
According to a recent Zapier survey of 2,001 adults over the age of 18 performed online by The Harris Poll, this is the case. Many of these side hustles are also new, according to the statistics.
Two-thirds (67%) of Americans who have a side hustle started it in the last three years, and nearly one-third (31%) started in 2020.
As the data shows, one-third of Americans (34%) currently have a side hustle. In 2021, 61.1 million Americans (24%) intend to start a side hustle. The tendency is only expected to continue. In 2021, roughly a quarter of Americans (24%) are planning to start a side hustle, while another quarter (27%) are still confused.
Why Are So Many People Side Hustling?
People are side hustling because of the benefits and perks they are getting from side gigs. Whether it is making ends meet or making a new revenue source apart from a full-time job, some of the major benefits are:
Increase in income
It may be difficult or impossible to improve the salary unless a person is working in sales or in a position where you receive frequent year raises and bonuses. Many companies give a fixed income and do not provide opportunities for advancement or getting a raise.
As the living expenses and regular daily expenses increase worldwide due to inflation, it is difficult to depend on your income in order to make ends meet.
While cash advance apps like Earnin can help, a side hustle can help you add an extra amount to your income. For example, working a side hustle that paid you an extra $200 per week would get you an extra $10,400 per year.
Pay off debts faster
To pay off debt rapidly, some people prefer to perform a side hustle. Due to unemployment, downsizing and basic salary the people are not able to pay their bills or credit debt on time so making extra through side hustling is the solution they found to pay off these debts on time or even before time.
As a result, it gives more opportunities to pay down your debt faster. Paying off your debt sooner can save you money in the long run by lowering your interest payments and helping you better your overall financial status.
More money saved
Another advantage of having a side job is that you may put an extra amount of money into your savings account. This assists people in saving for a major future expense, such as private student loans, a down payment on a home, a new baby or it can be saved for any rainy day when financial situation is not so well.
An interesting fact is that if you ran a side job that brought in an extra $1,200 per month and set aside 100% of it for a down payment on a house, you'd have $14,400 after a year.
The promise of earning passive income, which is cited by nearly half of Americans with a side hustle (46 percent), is by far the most prevalent reason stated. There were also additional financial motivations driving this trend some of them are:
- Diversity of income—33%
- Set aside 25% of income for a specified financial goal.
- Save up the money for purchasing certain thing—23%
Money, however, was not the sole incentive. There are a variety of non-financial motivations to establish a side business that includes:
- 38% of them wants to do something enjoyable or enjoyable for them
- 28 %of people said they want to learn new skills.
- 16% of people want to try out a new company idea.
Despite a strong labor market and a healthy economy, every three out of every ten working Americans with a side hustle say they require the extra money to assist cover the cost of basic living expenditures.
One of the most important findings from Bankrate’s recent Side Hustle Survey of 2,550 respondents is this. Even though the wage rate is increasing, but they are still insufficient to keep up with the rising cost of living for US people.
Although many families in U.S rely on side hustles to make their earning, the most prevalent motivation for workers to embark on gig economy jobs is to have some extra disposable income.
For 34% of the poll respondents is doing side hustle just to have extra cash to spend. 30% are doing it for their common living expense. 27% are doing side hustle in order to have some savings for the rainy day. And no wonder why so many people are skipping vacations these days because the usage of a side hustle for other income is only 5%.
Millennial groups, in comparison to their parents and grandparents, are more likely to have a side hustle. Furthermore, younger folks rely on side hustles to make an extra edition in their income. Around 45% of millennials who have a side hustle claim that it provides at least half of their monthly income.
Generation X are those who were born between the mid-1960s and the early 1980s, 39% of these people do side hustle in order to live the American dream and save money for the future.
The last category is baby boomers, these are the people that rely least upon side hustle which is only 28% because are old people and most of them just want to enjoy their time with the savings they have invested for retirement.
How Much Do People Make from their Side Hustles?
Working Americans class are spending an average of 12 hours per week on duties connected to their side hustle and earn $1,122 per month on average. That means there's a possibility to earn more than $13,000 in a year. That amount of money can be hugely significant for those in need of supplementary income.
However, it all depends on the type of work you're doing and how much demand there is for your expertise. In general, most Americans who work a second job don't make a lot of money. This can be seen through the stats mentioned below
- 73% of Americans are earning $500 of less through side hustle
- 12% are earning between $501 to $1000
- 2% are earning between $1001 to $1500
- 3% earns in between $1501 to $2000
- Finally 6% are earning more than $2000, maybe because of a unique skill or demand in the market
Indeed, if driving for Uber or Lyft, this may help to find extra pay for additional expenses as a result of any side business, such as automobile upkeep. There are other perks associated with full-time employment that are unavailable to workers in the gig economy. Having a side business may mean taking on additional risks and sacrificing access to workplace benefits such as health insurance.
As the pandemic situation is getting overcome and people have observed that a lot of money can be made through side hustling like freelancing, e-commerce, and other online businesses where there isn’t any time schedule of nine to five therefore in 2021 people are shifting toward side hustling more and more.
The stats below also proves the increasing growth of side hustlers' income as compared to 2020.
The data above is a comparison of the percentage changes in the monthly earning of side hustlers from May 2020 to October 2021, earnings have increased considerably well, with approximately:
- 14% of side hustlers making more than $1,500 per month in 2021 which was only 5% in 2020
- 18% of Americans are earning between$1001 to $1500 which was 8% in 2020
- 30% are earning between $500 to $1000 which was approximately 25% in 2020
- 39% is earning less $500 now which was almost 66% in 2020.
How Much Time Do Side Hustles Take?
Labor shortages have affected practically every industry in 2021, since the economy has reopened and the pandemic situation has been controlled. Restaurants are failing to re-staff, and other businesses are experiencing similar issues. While there are a variety of explanations as to why this is happening, the statistics clearly reveals that side hustles is playing a big role in providing people earn in a non-conventional manner
Last year in 2020, only 27 percent of the side hustlers used their earnings to pay their monthly bills and costs. That percentage has risen to 41% in 2021 after the growth and awareness of e-commerce, freelancing and cryptocurrency trading.
People are more reliant on side hustles to supplement their income. It can also be seen that with the rise of the side hustlers in the US, the time period doing the work has also increased. The average amount of time spent on side hustles has risen in 2021, the share of persons spending more than 15 hours per week on their side hustles more than doubled, from 12% to 27%.
The stats show the comparison of the division of time and percentage of side hustlers working on a weekly average from 2020 to 2021:
- 1 to 5 hours: 39% people side hustle in 2020 while, 22% people side hustle in 2021 under this time span
- 5 to 10 hours: 31% people side hustle in 2020 while, 33% people side hustle in 2021 under this time span
- 11 to 15 hours: 17% people side hustle in 2020 while, 20% people side hustle in 2021 under this time span
- More than 15 hours: 13% people side hustle in 2020 while, 27% people side hustle in 2021 under this time span
What Are the Most Popular Side Hustles?
A ton of people are seeking the most popular side hustles to make additional income. There are a ton of side hustle ideas, but which one can actually help you meet your financial goals? Well, the most popular side hustles, according to over 1,700 survey replies from Side Hustle Nation, are:
- E-commerce — including Amazon, eBay, up work, fiver and own internet business — freelancing and consulting
- Investing in real estate, cryptocurrency, stocks, purchasing businesses, and alternative investments
- Blogging, podcasting, online courses, and affiliate marketing are all examples of online business
- Cleaning, knife sharpening, notary services, pet waste removal, and other self-publishing local services
- Software, games for money, and apps that pay
- Jobs in the gig economy, such as Instacart or Lyft
What Are the Highest Paying Side Hustles?
The top three business models among side hustlers generating income more than $1,000 per month are:
Ecommerce
Starting an internet business selling products all over the world using platforms like eBay, Shopify, Etsy, or Amazon.
Approximately half of Amazon sellers earn between $1,000 and $25,000 each month.
The nicest feature about this company model is that it allows people to outsource practically all of the activities such as manufacturing and transportation, for example.
You can hire a firm to print a design on your cap. These businesses may even be able to assist you with the shipment. There are plenty of companies with which you can work to make your dream items a reality.
Freelancing / Consulting business
Freelance services like Upwork and Fiver have revolutionized the way professional assignments are accomplished all around the world.
Web development, programming, and graphic design are in high demand at all times.
Small businesses, in particular, want freelancers to accomplish projects at a reasonable cost. Working as a freelancer might help people capitalize on this opportunity and earn money. The average hourly compensation for a freelancer in the United States is $17.96.
Tutor or consultant
People in the US are making a lot of money through part-time tutoring. Whether they are an expert in algebra or can improve a company's bottom line, someone could profit from that knowledge.
The amount of money side hustlers are earning through instructing or consulting is determined by a variety of factors, including the uniqueness of the expertise or experience.
Tutoring young students, expect to earn between $15 and $25 per hour. Tutors at higher levels can easily charge $30 to $50 per hour. Depending on the business, a top-level consultant can earn $100 per hour or more.
Side Hustle Statistics Summary
One -third of side hustle and gig workers are dependent on their extra income to get by, it's reasonable to infer that people working a side job are on the bottom end of the income scale.
But this isn't always the case. It can be seen that over 56% of poll participants had a bachelor's or master's degree, and one-third of all participants earn $75,000 or more per year.
According to the US Census Bureau, that qualifies as middle class, but in many parts of the country, that isn't enough to maintain a typical lifestyle today due to inflation, expenses and unemployment in the COVID-19 pandemic.
Americans either transfer employment every couple of years to a firm that pays a better salary, or they take up a side job in the hopes of generating enough extra income to cover the gaps.
This survey tells the percentage of how many side hustlers need to tax on their side hustling from their income.
- 20.60% did get unexpected tax bills from their side hustle in 2020
- 79.40% did not get any unexpected tax from the side hustle in 2020
Side hustlers should set aside some percent of their side hustle income for taxes and keep track of all connected expenses and receipts because if not then side hustlers may get charged with an unexpected expense at the end of the year if they don't set aside some of the earnings to pay taxes.
In short, I believe that side hustles are beneficial because they allow individuals to gain the benefits of independent work while maintaining the steadiness of a typical job, avoiding the big drawbacks of relying solely on gig labor. They also provide people with a sense of empowerment and leadership by allowing them to shape the task according to their own way and its setting.
But one can get a lot of benefit from side hustling and can live the American dream only if there is a good balance between full time work and side hustles, completely relying on one thing may not be much beneficial.
References
- https://www.nbcnews.com/business/business-news/who-s-got-side-hustle-postgrads-people-earning-80-000-n1013621
- https://www.billacholla.com/side-hustle-statistics/
- https://www.bankrate.com/personal-finance/side-hustles-survey-june-2019/
- https://www.sidehustlenation.com/side-hustle-statistics/
- https://zapier.com/blog/side-hustle-report/
- https://www.forbes.com/sites/jenniferbarrett/2020/10/21/side-hustles-are-closing-the-income-gap-for-many-americans-during-the-pandemic/
- https://careertuners.com/blog/top-paying-side-hustles/
- https://hbr.org/2020/03/make-your-side-hustle-work
- https://dollarsprout.com/side-hustle-statistics-2021/
- https://www.entrepreneur.com/article/378666
