COVID-19’s effect on the U.S. labor market prompted job loss and increased job insecurity in the past year — but over half of American workers currently have or intend to have a second income outside of their primary jobs, according to a recent study.
The 2021 Job Seeker Nation Report by recruiting platform Jobvite found that 53% of surveyed workers have or plan to have a second source of income, compared to just 36% in 2020.
More and more Americans are seeking alternative sources of income to monetize their talents and skills and save up for unexpected emergencies.
Here’s how you can set up a side hustle of your own.
What should you be looking for in a side hustle?
The ideal side hustle is a job that you actually enjoy.
If you have a passion for writing, consider offering your services as a freelancer. If you’ve taken up any arts-and-crafts hobbies during the pandemic, you could capitalize on your newfound skills and set up shop online.
Decide what you’d like to commit to in your spare time and figure out how many hours you’d like to dedicate to it. Ultimately, your new gig should be on your terms, so your schedule can be as flexible as you’d like.
Figuring out how much your services should earn you is a bit more tricky. Do some research and check out what other freelancers typically charge for the same job. As more people commission work from you and your reputation grows, you can increase your prices.
Side Hustle Nation says some of the most popular side hustles include online businesses, like blogging and podcasting, freelance projects and consulting, investing and e-commerce.
Keep in mind that if you want to sell items online using platforms like eBay and Etsy, you still need to report the extra income to the IRS this year.
Of course, all the extra income is going to add up when it comes to filing your taxes. Make sure to report it as well as your primary income on your tax return. There are tax software programs online that also make it easier for you to file returns when you’re juggling multiple sources of income.
If you don’t have the time to commit to a side business, but still need the extra cash, you could even sell some of your old stuff, like books you don’t read or games you don’t play, on a site that will earn you 33% more than other buy-back programs.
How to go about finding one
It might sound daunting to try and stand out amongst millions of workers in the gig economy, but there are online marketplaces and job boards that make starting out a little easier.
Set up a profile and connect with potential clients on an online marketplace for freelancers. Customers can also leave reviews of your work, which help attract more clients.
Or, check out a job board that matches you with employment opportunities that fit your needs and skills.
Look into tips to help you up your game in the gig economy as well.
What should you be doing with the extra income?
Nearly half of side hustle workers were motivated by the prospect of having more extra cash, according to a survey commissioned by app integration company Zapier. Here are some smart ways to use that extra cash.
Pay off your debt: If you’ve got any outstanding debt, you’ll want to conquer that first. Pay off those credit card bills and monthly loan payments in full to avoid adding up on interest and up your credit score. You can even bundle up multiple balances into a single lower-interest debt consolidation loan to make them easier to manage.
Park it in a savings account: Put away some rainy day funds for unexpected big expenses, like out-of-pocket medical bills or major car repairs. If you lose your primary job, you’ll have your side income and your savings to help you get through it until you find something new.
Use it for a down payment: Once you’ve acquired enough experience and made enough money through your side hustle, you could put that extra cash towards a bigger down payment on a home. That’ll cut down on your monthly payments and help pay off your mortgage faster. Just make sure you shop around for the best mortgage rates on the market first.
Start investing: Let your money grow by putting some of it into the stock market. There are plenty of investment apps and services that can help you build your portfolios or even manage your investments for you. You can start small using a popular app that lets you invest your spare change.