Inflation is a significant concern for many consumers, with housing and gasoline being the current drivers, according to the Bureau of Labor Statistics’ Consumer Price Index. Despite a drop in inflation from its peak in July 2022, which now sits at 3.2% as of February 2024, consumers are still feeling the effects and are making adjustments to cope. PYMNTS Intelligence data shows that side hustles have become crucial for more consumers compared to last year, indicating a shift in how people are supplementing their incomes.
Supplemental incomes are not just about financial distress; ease of access and enjoyment also play a significant role in why consumers engage in side hustles. Interestingly, age seems to be a more significant factor than financial distress when it comes to having a side hustle, with Gen Z consumers being the most likely to have any kind of side income. Additionally, high-income earners are more likely to view this income as more important in 2024 compared to last year.
The latest edition of “New Reality Check: The Paycheck-to-Paycheck Report” by PYMNTS Intelligence delves into the financial lifestyles of U.S. consumers and their engagement with various sources of supplemental income. The report is based on data from a survey of 4,203 U.S. consumers conducted in February and an analysis of other economic data.
Despite the drop in the percentage of consumers living paycheck to paycheck, which now stands at 59%, with even high-income earners feeling the pinch, the need for supplemental income remains high. Active income sources such as reselling items, performing informal tasks, or creating artisan products continue to be popular choices for earning extra income. Passive and aid incomes have also seen an increase in 2024.
While some may assume that financial distress drives the need for supplemental income, the data suggests otherwise. Age seems to be a more significant factor, with Gen Z consumers leading the way in engaging in side hustles. The report also highlights that even though the percentage of consumers in financial distress has decreased, engagement with supplemental income sources has remained steady.
The report also reveals that top earners are more likely to engage in side hustles, with active income sources being more popular than passive ones. High-income consumers are turning to side hustles such as reselling items and carrying out informal tasks to boost their incomes. Additionally, profits from investments are a top passive income source for this group.
Selling used items remains a popular side hustle for many consumers, with a significant number engaging in both selling and buying secondhand goods. Online platforms, particularly Facebook Marketplace, have become the preferred channels for resale, offering consumers a convenient way to earn extra income.
In conclusion, the report highlights the growing importance of supplemental income in the financial lives of U.S. consumers. While fewer people are living paycheck to paycheck, side hustles have become more crucial in 2024. The data shows that age and income bracket play a more significant role in engaging with supplemental income sources than financial distress. As consumers continue to navigate the challenges of rising costs and inflation, side hustles offer a way to supplement their incomes and improve their financial stability.
