Chicago — Though working a full-time job has it’s benefits, it may not be the best solution for everyone. Many are opting to freelance or choose side hustles over full-time jobs with benefits.
According to Matt Schulz, Chief Credit Analyst at Lending Tree, half of Millennials have a side hustle, compared with 39% of consumers overall. Nearly half, 46%, of Gen Zers also have a side gig.
Do the math
It’s important to crunch the numbers because a full-time job may not always pay more than a bunch of side hustle.
Take someone with a salary of $40,000 a year with an hourly rate of $20 for 40 to 50 hours for 50 weeks. Compare that to a person who is making $25 an hour with freelance writing and also has a restaurant job allowing them to earn up to $40 an hour in tips during dinner shifts. If the latter person is able to put in enough hours between those two income sources, it would make sense for them to ramp up their writing and restaurant hours rather than work a full-time job.
Another important step in considering that decision would be to calculate the cost of losing workplace benefits such as health insurance, paid time off, and access to an employer savings plan for retirement. As a freelance writer and part-time restaurant worker, a couple of sick days could mean losing a few days of income. A single person will need to see what buying their own insurance would cost them.
A mental component to consider with side hustles
If you determine you can do well financially by working a bunch of side hustles instead of a full-time job, it’s also important to note how the lack of stability can impact your mental well-being.
Full-time jobs offer security and consistency. Freelancers can be busy until one day, some clients stop needing them, leaving them with an income gap. Is that worth the risk?
Part of that can be determined by how much money you have saved for emergencies. The more money you have saved, the more confident you may feel working side hustles since you have cash reserves to fall back on.