4 Key Signs You Will Need a Side Gig Forever

4 Key Signs You Will Need a Side Gig Forever

Side gigs can be a great way to earn extra cash. However, you might not be able to give yours up anytime soon.

“If you are consistently experiencing financial strain, and struggling to make ends meet with your main source of income, it may be a sign of the need for additional income,” said Taylor Kovar, CFP, founder and CEO of 11 Financial. “A side gig could provide this additional income, alleviating financial strain and building financial stability.”

Maybe you’re a ride-share driver, grocery shopper, food delivery driver or dog walker. Whatever the hustle, if you’re not in a great place financially, this gig work is more of a necessity than an option.

It might be nice to think you’ll need to do this side hustle only for a while, but that might not be the case. Here’s a look at four key signs this is more of a long-term arrangement than you initially thought you were signing up for.

You Don’t Have Much Money Saved

“A side gig can provide an extra financial cushion that can cover unexpected emergencies or costs that could strain your budget,” Kovar said. “Having the extra income from a side gig can provide a buffer covering unforeseen costs, lowering financial strain.”

Experts generally recommend having at least three to six months’ worth of living expenses in your emergency fund. Using income from a side gig to build an emergency fund can be a great idea, but it shouldn’t be the only way you have extra cash on a permanent basis.

If you don’t currently have much money saved, you’re not alone. As of 2022, the median transaction account balance for U.S. families was $8,000, according to the most recent Survey of Consumer Finances, conducted by the Federal Reserve.

Your Primary Job Doesn’t Pay Enough

“If your main job has limited opportunities for advancement and salary raises, then exploring a side gig can offer a supplement to your income,” Kovar said.

However, if you literally can’t afford to quit your side gig, Angela Ashley, founder and CEO of Unique Investment Advisors, said this is a sign you’ll need to keep that hustle up forever.

“If someone plans to continue working indefinitely, because they can’t afford to stop, it may indicate they haven’t saved enough, so the side job becomes a necessity,” she said.

This may be especially true if quitting your side gig would mean you couldn’t afford to maintain your current lifestyle, she said.

“Side job income is often the only option,” Ashley said. “The side gig becomes perpetual, as lifestyle is often a terrible addiction.”

For reference, as of the fourth quarter of 2023, the median weekly earnings of full-time wage and salary workers in the U.S. were $1,145 per week, or $59,540 per year, according to the Bureau of Labor Statistics.

You’re in a Lot of Debt

“Carrying significant debt can severely impact one’s ability to exist without continuing to work and support that ongoing obligation,” Ashley said.

She said having high-interest debt — e.g., credit card debt — can be challenging to manage.

“The hamster wheel of debt often requires additional income just to break even,” she said.

As of February 2024, the average monthly debt payment — including credit cards, mortgages and auto loans — of a U.S. consumer is $1,225, according to Experian. Of course, many people also have other types of debt, including student loans, with an average monthly payment of $203.

If you’re in more debt than you can reasonably pay off without a side gig, you might have to make a side gig part of your plan for the foreseeable future.

You Don’t Have Enough Saved for Retirement

“When I meet with people in their later years who haven’t saved enough for retirement or haven’t started saving early enough, it is often a sign they won’t have enough money to stop working,” Ashley said.

In this case, income from your side gig might be largely what you’re living on in retirement.

“If someone doesn’t have retirement accounts, such as a 401(k) or IRA, it commonly indicates they haven’t been actively saving for retirement or haven’t prioritized retirement income,” she said. “Without passive income, work is mandatory.”

In 2022, 54.3% of families participated in retirement savings plans, according to the Survey of Consumer Finances. The conditional median value of retirement accounts was $86,900.

To put that in perspective, you should have three times your annual salary saved by age 40 and 10 times your annual salary saved by age 67, according to Fidelity.

Taking on a side gig can be a productive way to boost your retirement savings, but if you can’t get the number high enough, you may never be able to fully retire.

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