The hustle and bustle is back.
In recent times Survey of 2,300 peopleMore than one in three U.S. adults (36%) told Bankrate they have a side hustle. The side hustle craze is only getting more popular. In 2023, a side hustle outside of a person’s primary income brought in an additional $810 per month; this year, that number jumped to $891.
Not everyone invests equally in this work: Men are more likely to work part-time than women, and younger workers are more likely to work part-time than older workers. (Men also earn more than women in part-time jobs, just as they do in the main job market; the average man in part-time jobs makes $1,034 a month, while women make $735 on average.)
By a wide margin, Gen Zers lead the way: Nearly half (48%) of 18- to 27-year-olds told Bankrate they have a side hustle. Only a third of Gen Xers say the same—and fewer than 1 in 4 baby boomers.
Perhaps it’s no surprise that workers of all ages and backgrounds continue to look for other ways to spend their money. After all, despite small dips, stubbornly high inflation remains determined to maintain stubbornness this year—no matter which presidential candidate is elected in November.
That means the price of basic living expenses like rent, gas and groceries will continue to hit hard, and the break for Almost half of American workers living paycheck to paycheck may still be a long way off. (Bankrate found that parents are more likely to report having a side job than non-parents.)
However, Ted Rossman, a senior analyst at Bankrate, said Luck that respondents aren’t actually using their side jobs to support their basic needs. Instead, they’re using the extra cash for discretionary purposes—buying unnecessary things.
Nearly 40% of respondents with a side hustle said they used at least some of their extra income for discretionary spending. Regular living expenses followed closely behind, with only 31% saying they saved at least some of their side hustle money. Only 1 in 5 side hustlers said they used their extra cash to pay off debt.
The dilemma of unnecessary spending
Perhaps that immediate spending habit is why workers work so much. In total, about a third of side hustlers told Bankrate they expect they will “always” need a side gig to make ends meet. But they also seem to recognize the precariousness of their position: Only 16% said they actually want their side gig to become their primary source of income.
Everyone wants more money, but the effort isn’t always so generous. In 2017, just 19 percent of Americans had a side hustle, compared to 36 percent today, says Bankrate senior analyst Ted Rossman. Luck. “We see a lot of people doing this out of necessity, feeling like they need the extra income to make ends meet,” he said. “But this year, most people are saying they’re doing it for discretionary money.”
Not always. Last year, essential spending was the biggest use of side hustle income—and there were slightly more side hustles last year than this year, Rossman points out.
“It’s a fragile situation,” he added. “Even though the economy is doing well on the surface, I’m a little worried that a lot of people need a side hustle right now. It makes me worried about the future.”
Rossman then brought up other troubling statistics: The majority of households live paycheck to paycheck and Most Americans can’t afford it with a surprise $1,000 fee. Still, Rossman said he wishes “more people would come forward and use this.” [side hustle] money to save, invest and pay off debt.”
To illustrate the problem, Rossman notes that half of people carry a credit card balance from month to month. Those people, who are paying 25% or 30% interest rates, are in a completely different situation than those who pay off their bills every month and get rewarded with cash back, hotel points, or airline miles. “That can be very systematic,” he says. “And I actually think a side hustle is a great way to tackle credit card debt.”
But for those who use their side income to buy new shoes or take luxury vacations, is it worth the strain? The most valuable asset people have is time—and side jobs like driving Uber or delivery to Dash Door It can take hours each week. Perhaps an alternative is to give up the side hustle entirely, give up spending, and double down on savings and investments—an especially good option for younger workers who do the most side hustles.
“Early savings will become a mountain of money later,” George Ball, president of Sanders Morris, an investment firm based in Houston, Texas, told Luck. Ball encourages young workers to save 10% to 20% of their income to invest—even if it feels like a struggle. “If it takes extra work to save that much money to invest, it’s worth it. A dollar invested today will grow into a comfortable lifestyle for decades to come.”
Clark Bellin, president and chief investment officer of Nebraska-based Bellwether Wealth, says the same thing, with a 10% savings benchmark. “Even if you can only set aside $50 a month at first, it’s better than putting off your investing journey until you’re in your 30s and 40s,” Bellin says. Luck. “Investment returns can be huge over the long term, so it makes sense to work part-time in your twenties if you need to so you can start investing early.”
