More than one-third of Americans engage in side hustles to supplement their income

Side hustles have become a significant part of many Americans’ financial lives, with a new Bankrate survey revealing that more than a third of adults use them to supplement their incomes. This trend has been on the rise, with over half of those individuals starting their side hustles after 2022 and earning an average of $891 a month in extra income. Bankrate has been tracking side hustle activity since 2017, and last year saw the highest percentage of Americans working a side gig in the survey’s history, at 39%. However, this year, that number dipped slightly to 36%.

According to Senior Industry Analyst Ted Rossman, the increase in side hustle activity last year was likely driven by the impact of inflation on household budgets. Many people were using their side hustle earnings to cover day-to-day expenses. This year, discretionary spending has taken the top spot as the primary use for extra income, although it still outweighs savings, investing, and debt payoff. The consumer price index has risen significantly since the beginning of 2022, putting pressure on household budgets.

Despite wages now outpacing inflation growth, many individuals still feel like they are playing catch-up due to years of rising prices. The ease of working online or from home, thanks to technology and shifting labor markets, has made side hustles more accessible to a wider range of people. The survey found that 37% of individuals use their extra income for discretionary spending, while 36% use it for essential living expenses like food and rent. About 30% save at least some of the money, and 20% use it to pay down debt.

There are clear generational differences in side hustle participation and earnings. Younger generations, such as Gen Z and millennials, are more likely to have side hustles and earn more from them. Millennials, in particular, earn an average of $1,129 per month from their side work, while baby boomers average $561 a month. Interestingly, the youngest adults, who have the most side hustles, are also more engaged in job hopping, reflecting a desire for flexibility and diverse income streams.

Parents of young children are more likely to have side hustles, which could be attributed to the need for additional income to support their families. However, side hustles are not solely about making ends meet for young workers or pursuing hobbies for older workers. They can serve as necessary revenue streams or passion projects, catering to a variety of financial and personal needs.

In conclusion, side hustles have become a significant part of the modern workforce, offering individuals the opportunity to supplement their incomes, pursue their passions, or achieve financial goals. As the economy continues to evolve, side hustles are likely to remain a valuable tool for many Americans seeking financial stability and flexibility in their careers.