Having a side hustle to make more money is a great way to achieve your financial goal. Aside from tightening your belt a bit more and squeezing every single dollar out of your income, budgeting will only take you so far.
Here are 7 reasons to have a side hustle to increase income
1. Pay off debt quicker
One major reason I started to take my side hustle more seriously this year is to pay off student loan debt quicker.
Although I budget every month, I am not one of those who will squeeze every single dollar out of my income and put it towards debt. I have found a very comfortable balance between tackling my student loan debt, enjoying what I spend on a monthly basis, and working on my side hustles. I would not recommend doing what I do here because I am thankful for a nice income and being single with no family. For most people I recommend budgeting, cutting expenses as much as possible, and using all the extra money towards debt.
2. Helps avoid living paycheck to paycheck
For some of you, living paycheck to paycheck is unavoidable and hopefully that is only the case after you put away for savings and chip away at your debt. Having a side hustle will help ease that feeling a bit when you have some breathing room.
3. Reach financial independence sooner and retire earlier
If you are out of debt, then the next best thing is to aim to reach financial independence, retire earlier, or do what it is you really want to do. When you are stashing extra income after paying off debt, it is natural you will start to stack up the savings rate and take advantage of compounding interest.
4. Save for vacation or guilty pleasures
Sometimes you might not choose to take the extra money you make and apply it towards debt, but rather you choose to use it for vacation or other guilty pleasures. This is certainly subjective because I have done exactly that during my financial journey of getting out of my $77,000 student loan debt. Rather than apply extra money I made towards my debt, I used the money to go to the 2018 World Series.
5. Learn extra skills (technical or soft skills)
Working on a side hustle in most cases will not make you money immediately and it will take a lot of hard work. The time investment you make on your side hustle, which could eventually start making you money, should be considered as a way to hone or develop new skills. Some of those skills could be technical in nature such as web development or coding or soft skills such as sales (pitching to potential clients), verbal and written communication, and leadership. Personally I have really improved negotiating skills because as a sports cards dealer, I am constantly buying and selling and working with potential customers.
6. Use as an escape from your day to day job
This does not apply to me, but a reason for starting a side hustle could be an escape from your day to day job whether you are making minimum wage or 6 figures. Perhaps you need more of a creative outlet and your side hustle allows you to do that. If this is the case, I think this is a good indicator that your side hustle is truly your passion and the money will follow.
7. Test an idea that might eventually become your main source of income
Your side hustle could be used to test a business idea or even test a passion you thought you had. I did both in a way and discovered something else along the way. Let me explain.
The main way I make extra income is buying and selling sports cards. Like most kids growing up that got hooked into sports cards, the dream was to own a sports card shop. In my mid 20’s when I was defaulting on my $77,000 student loans and experiencing credit card closures, I actually put together a legitimate business plan and applied for an SBA (small business) loan to buy out a sports card shop that was going out of business.
Getting declined for the loan was clearly the best thing for me. I gave up on the idea of opening a sports card shop and instead starting buying and selling sports cards on the side….for fun and making small chunks of change here and there.
After years and years of this side hustle and just enjoying the hobby, I realized that I never want to open a shop. I had a very clear self realization that I get attached to many of the cards I acquire and I do not like the idea of buying and selling to make a quick buck. I would rather hold onto the card and speculate that the card will appreciate. When you open a shop, you cannot be attached to the cards you acquire because of the overhead whether the shop is a traditional brick and mortar store or online.
I realized that I like the hobby more than the money itself. I like the relationships I build. I like the conversations I have. The money is a bonus that comes along with the hobby I enjoy so much. Without the side hustle, I could have potentially wasted hundreds of thousands of dollars and hating my sports card shop.