Many women engage in side hustles not only for enjoyment but also to transform their passions into profitable ventures or to bolster their finances with some extra cash. However, for a significant number of individuals, these part-time endeavors have become essential for financial stability.
With the ongoing impact of inflation on household finances, countless American families are striving to regain their financial footing. A recent study by MarketWatch Guides found that over half of Americans have embraced side hustles within the last year to enhance their primary income.
To explore the growing trend of side hustles, particularly among those facing economic challenges, the MarketWatch Guides team conducted a survey with 2,000 Americans. Below, we present our insightful findings and guidance.
Key Insights
More than half (54%) of Americans report taking on side hustles to supplement their income in the past year.
Generation Z leads in side hustle participation (71%), followed closely by millennials (68%).
Almost one-third of baby boomers have engaged in side hustles.
Around two-thirds of Americans (66%) are living paycheck to paycheck, with over half (57%) indicating that they have sought additional income opportunities.
Economic Strain: The Inflation-Wage Discrepancy
Since late 2020, the accelerated pace of wage growth and inflation has been evident, peaking in the summer of 2022 according to data from the U.S. Bureau of Labor Statistics.
However, between June 2021 and March 2023, inflation consistently outpaced wage growth, leading to a situation where even with increases in salary, many workers found their purchasing power diminished due to rising costs.
The disparity reached its climax in June 2022, when inflation hit 9.1% against a 5.3% growth in wages.
Despite a decline in inflation rates since June 2022 and wage growth surpassing it for several months, the Consumer Price Index in February 2024 remained up 3.2% compared to February 2023, exceeding the Federal Reserve’s 2% target.
While wages have risen since pre-pandemic days, many Americans still feel a financial pinch. An earlier MarketWatch Guides study revealed that two-thirds are living paycheck to paycheck, possibly prompting them to pursue side hustles to cover their basic needs.
The Rise of Side Hustles
The survey revealed that 54% of employed Americans have reported taking up at least one side hustle for extra income over the past year. Notably, men are more likely to engage in side hustles, with 59% compared to 49% of women.
Among those living paycheck to paycheck, 57% have sought additional income streams, while 48% of those not in financial distress have done the same, highlighting the breadth of this growing trend.
Side Hustles Among Generational Lines
Certain generations are more inclined to pursue side hustles. Gen Z is the most active, with 71% participating, followed by millennials at 68%. Baby boomers, while less likely, still see nearly a third (32%) engaging in side work.
Defining generations:
- Baby boomers: Born 1946-1964, currently aged 60-78
- Gen X: Born 1965-1980, currently aged 44-59
- Millennials: Born 1981-1996, currently aged 28-43
- Gen Z: Born 1997-2012, currently aged 12-27
With many baby boomers nearing retirement age, side hustles may provide necessary financial support amid concerns about insufficient savings due to rising living expenses and inflation, especially as they step away from the workforce.
Financial Insecurity Among Side Hustlers
For innumerable individuals, side hustles are viewed as essential rather than optional, yet the supplemental income may still fall short of achieving financial security.
Our findings showed that 44% of those who took on extra work still reported feeling financially insecure. Additionally, side hustlers were more inclined to live paycheck to paycheck compared to their counterparts without side jobs. When asked about barriers to achieving financial goals, high living costs (30%) and inadequate income (22%) were the leading factors, echoed by both side hustlers and non-side hustlers.
Enhancing Finances Without a Side Hustle
While side hustles can be beneficial, there are alternative strategies to enhance your financial situation:
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Negotiating your primary salary: If your salary has remained stagnant, consider discussing a raise. Prepare beforehand by practicing your pitch, emphasizing your contributions, and researching market salaries. Alternatively, consider seeking new full-time employment, as job switchers have seen a 7.6% increase in pay year-over-year as of February 2024.
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Building an emergency fund: Aim to save three to six months’ worth of living expenses in a high-yield savings account, using this solely for unexpected financial moments. Begin with manageable amounts—saving $50 weekly translates to a $500 emergency fund after just ten weeks.
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Reaching out for support: If basic needs aren’t being met, don’t hesitate to seek local and national resources. Food pantries and programs like SNAP can provide essential support for qualifying individuals.
Frequently Asked Questions
A side hustle is any job, business, or opportunity that provides additional income in addition to your main employment.
How can I start a side hustle from home?
Before launching a side hustle from home, evaluate your financial goals, skill set, and available time. It’s also crucial to understand the tax implications of working from home to fully assess the impact on your finances.
What are some remote side hustle ideas?
Remote side hustle options include freelance writing, virtual bookkeeping, online tutoring, transcription services, social media management, and more.
What are the highest-paying side hustles?
A study from online tutoring platform Preply identifies motion graphics design, web development, and roles such as writing or blogging as the top three highest-paying side hustles.
Research Methodology
To gain insights into the financial sentiments of Americans, the MarketWatch Guides team conducted a survey of 2,000 individuals via Pollfish, a reputable market research platform. Data for this report was gathered between February 13-15, 2024.
Responses were weighted to reflect population demographics related to age, gender, and income status, ensuring a representation of all U.S. adults (aged 18 and over). The margin of error stands at +/- 3% with 95% confidence. Participants were deemed to have a “side hustle” if they answered “Yes” to having undertaken opportunities for extra income within the past year.
Additional information on wage developments and the Consumer Price Index was sourced from the U.S. Bureau of Labor Statistics, with all values referencing 12-month percentage changes.
