You are currently viewing Side hustles are helping a lot to close the income gap during the pandemic – here’s what to look for

Side hustles are helping a lot to close the income gap during the pandemic – here’s what to look for

Samantha Sands lost her public relations job two weeks after the coronavirus pandemic shut down much of the country. She was able to continue working under contract, but as the economy collapsed, many clients suspended her public relations services. So she got creative.

“I had worked as a marriage counselor in college, and it was a fun job with a good commission if I did well,” recalls Sands, who is in her 20s and lives in San Diego.

Bridal counseling may not seem like the obvious choice during a pandemic that has caused many weddings to be postponed and downsized. But Sands was able to find enough clients planning small, short-term ceremonies or planning a future wedding in advance to bring in more than $1,200 a month on top of her freelance public relations work.

“I use it to pay some bills, but I also use it as a cushion,” she said, adding that she tries to save at least a few hundred dollars on each check. “We don’t know what the future holds, and I’d rather be safe than struggle.”

With the jobless rate still hovering around 8% and millions out of work, a growing number of Americans like Sands have started taking hustles and taking out contracts to help cover expenses and realize savings.

The number of freelancers in the United States is increasing

The growth of side businesses and self-employment began long before the pandemic. More than 57 million Americans freelanced part-time or full-time last year, accounting for about 35% of the total workforce, according to the nonprofit Freelancers Union. But that number has risen further during the pandemic, as those who have lost their jobs have sought new sources of income to cover their bills and full-time workers have found additional work to bolster their savings in the face of a slowing economy. and an uncertain future.

Two Million More Americans Started Freelancing in the Last 12 Months, New Upwork Research Shows

UPWK
, a platform for freelance jobs. Unsurprisingly, given the millions of jobs cut in the pandemic, the share of Americans making a full-time living freelancing has also increased.

Upwork chief economist Adam Ozimek cites the economic uncertainty following the spread of the pandemic and the temporary (and sometimes permanent) closure of businesses across the country, which has prompted many to going freelance for the first time. At the same time, he notes a new demand from businesses for freelance professionals who can be hired on contract, and for less money than it costs to hire full-time employees, as companies recalibrate their needs.

Side hustles can provide essential income

For some workers, the extra income is essential, helping to cover basic expenses, especially after the additional $600 weekly unemployment benefits offered by the CARES Act expire on Aug. 1. rely on indirect income to cover their monthly bills.

For others, odd jobs are a way to save a little more money.

In a new survey by financial wellness app Acorns (of which I am the education director) and Opinium Research, a third of respondents surveyed said they had already taken a side hustle to their regular job. , and nearly 20% of workers said they would like to start one. This week, in an effort to help its more than 8 million users find work or extra income, Acorns launched a new job search feature, powered by ZipRecruiter, which includes millions of job postings not only for full-time jobs, but also for part-time roles. and side shoves too.

Relying on freelance gigs or using traditional side businesses as your primary source of income comes with additional considerations.

If you’re not working full-time, you’re usually responsible for purchasing your own health insurance, which can be expensive. And if you’re self-employed, you also have to pay a 12.4% Social Security tax (combining employee and employer portion) on up to $137,700 of your net earnings and a Medicare tax. 2.9% on all of your net income. However, you can also deduct expenses related to your business, which can help reduce your overall tax bill.

Viviana Rivera, tax accountant and financial advisor, recommends setting aside up to 35% of the money you earn in a high-yield savings account, which can be used to pay estimated quarterly taxes.

How can you find the hustle and bustle on the bright side?

Finding the silver lining in the hustle and bustle can be difficult, even more so in the midst of a pandemic, when safety issues are also factored into the search. Many successful secondary hustlers have turned to jobs that can be done virtually or require limited physical interactions with other people.

Some of the most popular hustle cited in the Acorns survey include reselling items, virtual admin support, tutoring and creative pursuits like blogging, all of which can be done virtually. Other popular hustle like dog walking can be done outdoors and with limited exposure to others. Many skilled workers also take advantage of virtual side businesses that leverage their expertise and can pay more.

Fiverr’s latest “Freelance Economic Impact Report,” released in May, found that there are nearly 6 million skilled freelancers currently working in creative, technical, or professional roles in the United States. media (23%) and online marketplaces like Fiverr, Freelancer and Upwork (18%). New York, Chicago and Los Angeles are the three largest markets, with over 1.2 million qualified freelancers in 2019 earning nearly $53 billion. But the report notes that the number of qualified freelancers in smaller markets like Austin and Nashville is also growing rapidly.

A growing need for qualified freelancers

Jandra Sutton’s hours at an advertising firm were reduced shortly after the pandemic-induced lockdown. “Although the work was slow, I realized that I could offer additional services to the few clients we had – things we don’t usually offer – to make their lives easier as busy entrepreneurs” , said the 31-year-old, who lives in Nashville.

She pitched the idea to her boss and, once she got his approval, offered a client she worked with a range of extensive services from ghostwriting to graphic design to creative. of presentation slides. “I loved the idea of ​​being a one-stop-shop for an entrepreneur’s creative needs.”

Within weeks, a second client contacted us. She didn’t have enough work to necessitate hiring someone full-time, but spent a lot of time trying to find the right people to complete several different, ad-hoc projects. So Sutton took many jobs for her. “I realized there was an opportunity forming,” she said. After a month of seeing her sideline workload increase, she launched her own creative agency, The Wildest Co.

Although she still works in the advertising business and enjoys her job, Sutton said she relishes the opportunity to gain additional creative work and income. She earns around $3,000 a month and now has five clients. Almost everything she earned went straight into savings or into setting up her side business.

The non-monetary benefits of secondary scams

Singer-songwriter Alissa Musto was touring full-time as a musician aboard luxury cruise ships. But that came to an abrupt end in March, when the coronavirus pandemic prompted cruise ships to cut trips short and cancel the remaining crossings of 2020.

Since then, the 25-year-old former Miss Massachusetts has taken to blogging – her first post for Medium was about her experience watching the cruise ship industry come to a halt in the pandemic while on board from his ship – taking work as an Instagram influencer and even filming lessons for a piano teaching app.

So far, she has earned over $1,200 and she expects her earnings to increase in the coming weeks. “For the most part, I think of these side gigs as having a little extra spending money, so I don’t feel as bad about spending money on things like Starbucks.

SBUX
or a new outfit here or there, things I wouldn’t even think twice about when I was working full time.

She also found other, less obvious benefits from taking side gigs, especially as the pandemic has dragged on and it’s unclear how long it will take for the cruise industry to fully recover. “I feel like I’m still moderately productive and working on my brand rather than sitting around waiting for my industry to pick up. And it’s developed other skills that I don’t normally use,” said Musto, who currently lives in Massachusetts, “And having these side gigs has helped me tremendously mentally during the pandemic, because it’s given me a way to exercise my brain and contribute.”

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