Millennials and the Side Hustle
February 20, 2017 § 3 Comments
Many Americans are taking on second jobs, or “side hustles.” Some do it for extra spending money, some for retirement, some simply to pay the bills. But no one side hustles more than millennials. A whopping 44% of those between the ages of 25 and 34 have taken on a second job, in addition to 39% of those between 18 and 24 years of age. It comes as no surprise: young professionals strive constantly to better their resumes and portfolios, and student loan debt is higher than ever – both on an individual and national level.
Side hustles today are a little different than they used to be. Thanks to technology, the entire job market is evolving, and second jobs are no exception. Some still opt for the classics: waiters and waitresses, bartenders, baristas, etc. But many millennials are looking for the freedom of doing their own thing on their own terms in their own homes (or wherever they can plug in a laptop). Now, people are opting for other jobs like driving with Uber, designing websites, hosting with AirBNB, blogging, freelancing and so much more.
But don’t cozy into your couch to start working on your side hustle just yet. There’s a lot of work that can go into making this extra job successful. Here are some items to consider before getting going:
- Be careful that you don’t lose money. Earning extra money appears glamorous, but keep in mind that with any business comes expenses. Whether these expenses come in the form of maintaining your car or home or purchasing supplies, materials or software, they will still affect your bottom line. Keep accurate records of every cent those goes into and comes out of your hustle. Consider opening a separate bank account just for your side hustle.
- Yes – this money counts toward your overall taxable income, and with a side hustle, none of those taxes are coming out throughout the year like they might at your day job. Fortunately, you can deduct expenses you put into the work, but keep a good chunk of money aside for those taxes. Uncle Sam may take as much as 50% of your extra earnings in both income and self-employment taxes.
- Speaking of taxes, you’ll need to file a Schedule C at tax time to report these earnings and expenses. Keeping up-to-date, accurate records will make this much easier on both you and your tax preparer. Again, consider opening a separate bank account and using an accounting program.
- Don’t let it affect your primary job. Do you have the time and energy to commit to another line of work? Does your side hustle conflict with the work your employer does? Remember that this is extra income; don’t let it jeopardize your base income.
- Likewise, don’t let it affect your home life. How will this lack of free time affect your personal relationships with friends, significant others or kids? Weigh the pros and cons of money versus time, and make sure what you make per hour is really worth it.
For those of you readers who work with and/or supervise individuals with side hustles, it can be an interesting experience, but if they are careful and mind the ideas above, it will hopefully never come between them and their job. Simply respect that they have goals outside of work, and having that extra job or income is a means of achieving that goal. But if it interferes with their performance, don’t hesitate to speak with them about it.
Side hustles can be difficult, interesting, and somewhat scary, but they offer individuals and communities many growth opportunities. If you need a small job done, there’s likely someone in your community who can do it well and for a good price, and shopping local is always a great idea.