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Key Points:
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39% of U.S. adults have a side hustle.
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One in three people with a side hustle rely on those funds to cover day-to-day expenses.
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A side hustle can help you dramatically transform your financial situation.
Side hustles aren’t a new phenomenon. But the number of Americans taking on a side hustle has increased. Not only are more Americans taking on a side hustle, but many are using the funds to cover day-to-day living expenses.
Let’s explore this trend and how you can use a side hustle to transform your financial situation.
39% of Americans Have a Side Hustle
A recent Bankrate survey found that 39% of U.S. adults have a side hustle. On average, people with a side hustle were earning $810 per month from their side hustle. But 28% of side hustlers reported only earning between $1 and $50 per month.
33% of side hustlers need the income to cover regular living expenses.
Why Are Americans Taking on a Side Hustle?
Many side hustlers are relying on this extra income to make ends meet. According to the survey, 33% of side hustlers need the income to cover regular living expenses. And 28% of side hustlers believe they will always need a side hustle to make ends meet.
But some side hustlers are using the extra stream of income to cover discretionary purchases, build their savings, and pay off debt.
How to Use a Side Hustle to Transform Your Financial Situation
The list of side hustle possibilities is seemingly endless. You can earn extra money from a wide range of activities, everything from walking dogs to being a virtual assistant could help you build an additional stream of income.
If you have side hustle income rolling in, you could use the newfound funds to dramatically transform your financial situation. Here are some strategic ways to use your side hustle income to pave the way to a bright financial future:
- Build an emergency fund: An emergency fund creates some breathing room in your financial situation. In general, experts recommend saving between three to six months’ worth of expenses in an emergency fund. If life throws an unexpected expense your way, you can lean on these savings. Consider building your emergency fund within a high-yield savings account to make the most of your efforts.
- Pay off debt: Paying off debt can help you build financial freedom. If possible, use your side hustle income to eliminate your debts ahead of schedule.
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- Invest for the future: A long-term investment timeline can help you build wealth for retirement. Consider using your side hustle funds to build a solid investment portfolio.
- Invest in yourself: An investment portfolio is useful. But it’s also a good idea to invest in yourself. For example, spending money on educational tools to improve your skill set or grow your financial literacy can go a long way.
- Treat yourself: It’s tempting to say that all of your side hustle income should be funneled toward long-term financial goals. But the reality is that it’s important to treat yourself along the way. Consider using some of your side hustle funds to splurge. The fun purchase could serve as the motivation you need to keep grinding.
The Bottom Line
A side hustle can potentially open the door to a brighter financial future. As you build your side hustle, use the funds to set yourself up for a smooth financial situation.
The good news is that it’s easy to get started. When you bring in side hustle funds, consider tucking those funds directly into a high-yield savings account. With the right savings account, you can put those funds to work for you.
Not sure what high-yield savings account is right for you? Explore the top high-yield savings account today.
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Sarah Sharkey is a personal finance writer with a Master's in Management from the Hough School of Business at the University of Florida. She enjoys helping people make better financial decisions and has written for numerous personal finance publications, including Money Under 30, Business Insider, and The College Investor. Sarah enjoys traveling, hiking, and reading when she is not writing.
