Many Americans have braced themselves with extra income through side hustles to weather economic uncertainties brought on by higher inflation and the threat of a looming recession, a survey found.
insureda small business insurance marketplace, surveyed more than 1,000 adults and said 93% had a side business or additional job in addition to their full- or part-time position.
Nearly 80% of respondents work full-time, but both full-time and part-time respondents said they spend an average of 13 hours a week on their side business.
Although it requires more hours and perhaps a little more stress, 97% said they would continue to work on their own in the future, and 93% said it was worth it.
“The pandemic has shown us all that relying on just one source of income, whether it’s a job or a business, is never a good idea,” said career coach Tatiana Tsoir. for businesses and entrepreneurs and CPA.
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Many Americans are working on the sidelines to make ends meet
Many survey respondents who said they took on extra work said they did so because of economic conditions and rising prices. Almost half (44%) said they had taken a hustle to make ends meet, while 28% said it was to cover rising costs due to inflation. About half of Americans (51%) also said they were considering taking up an additional side hustle because of inflation. And 26% said they were working extra to pay off their debts faster.
When asked what side businesses they have, 95% of respondents said they have done online surveys, 18% have sold items on sites like eBay, Craigslist and Facebook Marketplace, 13% have done self-employment and 9% sold their second-hand clothes. These workers earned an average of $483 a month, or nearly $6,000 a year, from the extra work, according to the survey.
“Side hustles can be a great way to make extra money, but you can make more money by taking a part-time job,” said Jay Zigmont, Ph.D., CFP and founder of Childfree Wealth . “Gig work has become popular, but once you factor in insurance, wear and tear on your car and other costs, sometimes a part-time job can be a better option.”
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Some additional costs are related to secondary unrest
According to Zigmont, running a side hustle is similar to running a small business, and the extra freelance income means paying extra taxes, carrying appropriate insurance and meeting local requirements.
“For example, if you run a DIY business, you may need a state or local license or permit, in addition to insurance,” he said. “Even if you drive for Uber, you need to update your car insurance to cover commercial use.”
Most respondents (92%) with side gigs had never checked whether they needed insurance, the survey found. Of the 5% of workers who had verified, 2% currently had it and spent an average of $70 per month.
Side hustle workers should also pay estimated taxes on additional income for the IRS and the state if he had state income tax, Zigmont said.
“That means filing and paying your taxes regularly throughout the year. If you don’t make the estimated payments, not only will you have a big bill at the end of the year, but you may also have to pay interest and penalties,” he said.
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