You may have heard or read about people making money from a side hustle, but you may not know exactly what that means. If you’re wondering, “What is a side hustle?”, we’ll answer all your questions and provide plenty of information so you can decide if it’s right for you.
What Is a Side Hustle?
A side hustle is a way of making money outside of your main job or primary source of income. It can be something you do on the side in your spare time.
Side hustles typically involve working as an independent contractor or starting your own small business, as opposed to working as an employee. Most side hustles also provide a lot of flexibility and can be done whenever it fits your schedule.
You don’t need to have a full-time job to have a side hustle. It’s possible that all of your income is from side hustles. For example, many stay-at-home moms and dads use a side hustle to provide enough income that they won’t have to work full-time. Also, many retirees have a side hustle to provide a source of income and to keep themselves active.
Statistics show that 40% of Americans have a side hustle (source), which is up from 34% in 2020. Millennials and those in Gen Z are more likely to have a side hustle than older Americans. With the popularity of side hustles trending up, 36% of Americans have started or plan to start a side hustle this year.
Related reading: How to Start a Side Hustle
Common Types of Side Hustles
There are endless possibilities, but many side hustles fall into a few common categories:
Offering a service as a freelancer is one of the most common ways to earn extra income on the side. Working as a freelancer allows you to make money from your existing skills and abilities. Many freelancers earn an above-average hourly rate, and it’s also possible to scale up and turn it into a full-time business.
See our list of freelance services you can offer.
An online business is a great option if you’re looking for a low-cost way to start your own business. You can start a blog or niche website, build an e-commerce business, or even create and sell digital products like e-books and courses. These types of side hustles are excellent choices for someone with a long-term focus who’s looking to grow it into a full-time income and beyond.
Gig work encompasses a wide range of services, from driving for Uber or Lyft to renting out your home on Airbnb. Task-based platforms like Fiverr and Upwork are also popular options for those looking for gig work.
While work in the gig economy may not provide the same earning potential as some other side hustles, it can be a great way to start making extra money with little to no upfront investment. You can also start making money almost immediately, which usually isn’t possible by starting an online business.
One of the most popular side hustles involves taking online surveys in your spare time. The amount you’ll earn per hour of work isn’t as high as some other types of side hustles and your overall income potential is limited, but it does offer extreme flexibility and anyone can do it. Another similar option is to perform short, simple tasks through microtasking websites.
Looking for more options and specific possibilities? See our list of 150+ side hustle ideas and you’re sure to find some that interest you.
Is a Side Hustle Worth It?
Before starting a side hustle, you should determine if it is the best use of your time. Let’s look at the benefits and drawbacks to help you decide if a side hustle may be right for you.
The Benefits of a Side Hustle
The most obvious benefit of starting a side hustle is that it can provide you with extra cash. Even if your goal is just to make a few hundred dollars extra per month, that’s money that can be used to pay down debt, save for a rainy day, or invest in your future.
For example, a side hustle that brings in just $300 per month may cover your car payment. Or, a side hustle that generates $1,000 per month may completely change your retirement plans if you’re saving and investing all of it.
Related reading: How to Make an Extra $1,000 Per Month
Increase Your Income without Relying on a Job
A side hustle allows you to increase your income without getting a raise or promotion at your primary job. Of course, those are excellent ways to increase your income as well, but they’re usually outside of your control. If you want to make more money but a raise or promotion isn’t a possibility right now, you can always turn to a side hustle.
Build a Business Part-Time
A side hustle can also be used to safely build a business part-time without leaving your current job. While it’s certainly possible to start a business full-time, it’s not always the best option.
If you want to eventually quit your day job and run your business full-time, starting with a side hustle is an excellent way to get your business off the ground without quitting your job and risking financial instability.
Another big benefit of having a side hustle is the flexibility it provides. The best side hustles offer some level of flexibility, whether it’s in terms of when and where you work or how much you work. This can be a big advantage if you have other commitments such as school or caring for young children.
It’s also worth noting that many side hustles can be done completely online, which gives you the added flexibility of being able to work from anywhere.
There are endless possibilities when it comes to side hustles. No matter what your skills, interests, or financial goals are, there’s likely a side hustle out there for you.
Monetize a Hobby
If you have a hobby that you enjoy, there’s a good chance you can make money from it. For example, if you like to knit, you could start selling your handmade items online. Or, if you’re a photographer, you could start selling your photos as stock photography. You could also start a blog or YouTube channel that incorporates one of your hobbies.
Making money doing something you enjoy is an ideal way to use your spare time, and there are plenty of hobbies that make money.
Sharpen Your Skills and Gain Experience
One of the most underappreciated benefits of a side hustle is the opportunity to gain new skills or improve the ones you already have. If you’re looking to make a career change, starting a side hustle in your desired field is an excellent way to gain experience and build your resume. For example, if you’re looking to transition into web design, you could start taking on small design projects on the side.
If you already have a job in your desired field but want to move up in your career, a side hustle can also help you sharpen your skills and become more knowledgeable. For example, if you’re a marketing assistant but want to become a manager, you could start taking on additional responsibilities at work or start managing projects outside of work.
May Help to Build Your Network
If you’re looking to meet new people or connect with someone in your industry, a side hustle can be a great way to do that. The connections you develop through your side hustle could lead to new opportunities, either in terms of your side hustle or your career.
The Drawbacks of a Side Hustle
While there are many benefits of having a side hustle, there are also some potential downsides that you should be aware of before starting one.
Takes Time Away from Other Things
One of the biggest drawbacks of having a side hustle is the time commitment it requires. To make extra money, you’ll need to invest additional time outside of your normal work hours.
For some people, this is no problem as they may have plenty of free time after their day job or on weekends. However, others may find that they don’t have enough free time to dedicate to a side hustle and may need to sacrifice some leisure activities in order to make it work.
Another potential drawback of starting a side hustle is that it can add additional stress to your life. Balancing a full-time job with a side hustle can be challenging, and if you’re not careful, it can lead to burnout. It’s important to make sure you have a good work-life balance and don’t take on more than you can handle.
May Distract You from Your Career
There’s no denying that starting a side hustle is a legit way to increase your income, but it’s not the only option. It’s possible that you would be better off focusing on your career, which may lead to an increase in pay or a promotion. If you’re not careful, your side hustle could end up distracting you from your career goals and preventing you from advancing in your field.
Can You Do It Forever?
Another thing to consider is whether or not your side hustle can be a sustainable source of income. For some people, their side hustle is a way to make extra money for a short period of time and then move on to something else. Others may find that their side hustle has the potential to become a full-time job.
Many people will find that they cannot continue to work the additional hours every week indefinitely. If you become accustomed to living on a higher income (your day job plus the side hustle), it may be a difficult adjustment to give up the side hustle.
Tips to Make Your Side Hustle a Success
Now, let’s look at some tips you can use to ensure that your side hustle is a success.
1. Know Your Purpose
Before you start your side hustle, it’s important to know your purpose for doing it. Ask yourself why you’re starting a side hustle and what you hope to achieve. This will help you choose the right side hustle and stay motivated throughout the process.
For example, if you’re starting a side hustle for supplemental income, you’ll want to focus on something that has the potential to generate income quickly. If your goal is to gain new skills or experience, you’ll want to choose a side hustle that will give you the opportunity to learn and grow.
If your goal is to start a business that will turn into a full-time income at some point in the future, be sure that you’re choosing a side hustle with high income potential (see our list of high-paying side hustles).
There are lots of different side hustles, but your personal situation and your goals will determine which one is right for you.
2. Consider Your Other Options
Starting a side hustle isn’t the only way to increase your income. Be sure to also consider ways that you might make more money through your full-time job.
Can you work extra hours and get paid overtime?
Are you in a position to ask for a raise?
Is there a promotion you could apply for?
Would you be able to increase your salary by doing the same job for a different employer?
There are a number of different ways to increase your income, and starting a side hustle is just one option. Be sure to consider all of your options before making a decision.
3. Choose a Side Hustle That Interests You
If you’re going to be successful with your side hustle, it’s important to choose one that interests you. It’s easier to stay motivated and dedicated when you’re working on something you enjoy.
This is especially important if you’re looking at a side hustle as a long-term solution. If you just need to make extra cash for a few months, it’s not so important what you choose. But if you want to find something that you could do full-time, find a side hustle that involves some of your interests or hobbies.
One of the reasons why I often suggest starting a blog or a niche website as a way to make money is because you can choose a topic that interests you.
4. Set a Sustainable Schedule
If you’re going to be successful with your side hustle, it’s important to set a sustainable schedule. You need to find a balance between working on your side hustle and taking care of your other responsibilities.
For example, if you have a day job and a family, you’ll need to make sure you’re not working too many hours and neglecting your family life.
The best way to find a sustainable schedule is to start slow and gradually increase the amount of time you spend on your side hustle. This will allow you to gauge how much you can realistically handle without causing problems in other areas of your life.
5. Don’t Be Afraid to Fail
One final tip is to not be afraid to fail. Many people are hesitant to start a side hustle because they’re afraid of failing.
But the truth is, everyone fails at some point. The important thing is to learn from your failures and keep moving forward.
If you’re constantly worried about failing, you’ll never get started. So go ahead and give it a try!
Frequently Asked Questions
A side hustle is also sometimes called a “side gig” or a “side job.”
According to a recent study by Zapier, 40% of Americans have a side hustle. The numbers are steadily increasing and show no signs of slowing down.
A side hustle can be an effective way to earn extra income without relying on a traditional job. However, there are many different side hustles and each one offers different income potential. Some people make good money with their side hustles, and others do not have success.
There are a number of reasons why people want a side hustle. Some people want to make extra money, while others want to find a way to replace their full-time job. Others see it as an opportunity to pursue their passions or start their own business.
It’s perfectly ok not to have a side hustle. Not everyone is interested in starting one, and that’s fine. If you’re happy with your current situation and don’t feel the need to make extra money, then there’s no reason to start a side hustle.
A side hustle can be a business, but it doesn’t have to be. For example, you could start an online business like a blog, e-commerce website, or YouTube channel. But other side hustles like taking online surveys or microtasking do not involve starting a business.
An EIN is an Employer Identification Number assigned by the IRS. You will need an EIN if you’re hiring employees (which is not usually the case for a side hustle) or if you’re incorporating or forming an LLC for your business. Those are the most common reasons for getting an EIN, but the IRS has a more detailed guide.
There’s no set amount that a side hustle should pay. It depends on the type of work you’re doing, how much time you’re willing to invest, and your skillset. Some people make a full-time income from their side hustles, while others only make a few hundred dollars per month.
If you’re making money from your side hustle, you will most likely have to pay taxes on that additional income. The exact amount will depend on how much money you make and your tax bracket. You can use this calculator to estimate how much you’ll owe in taxes.
Yes, many people have multiple side hustles. It’s just a matter of managing your time and prioritizing.
A side hustle can be a great way to make extra money and pursue your passions. But it’s important to choose the right side hustle and manage your time wisely. With a little planning and effort, you can find success with your side hustle.
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