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In today’s gig economy, side hustles are easier than ever to find. There’s money to be made from selling stuff on the internet; becoming a Lyft or Uber driver; blogging about your savings successes; and hooking up with old-fashioned work like tutoring, dog walking and moving (or assembling) your neighbors’ furniture. While the jobs are varied, the reason people take on a side hustle is often the same: to reach a financial goal.
Mandy Velez, 27, side-hustled her way to paying off her student debt. She borrowed nearly $75,000 to earn a B.A. in English and Communications from the University of Pittsburgh in 2013. She started her career as a journalist at HuffPost, earning only around $40,000 a year in high-cost New York City.
Yet rather than just paying the income-based minimum of $300 a month, she tried to pay $1,000 a month towards her college debt. As Velez advanced, she continued living frugally, devoting raises and bonuses to paying off her student loans.
Among other things, she never had her own apartment, living with roommates and now a significant other. By the end of 2018, after five years of payments, she had shelled out more than $70,000, yet still owed nearly $30,000, because of all the accrued interest.
Frustrated that she still had a large amount left to pay after years of being a bona fide frugalist, and determined to get the debt paid off before she turned 30, in January 2019 Velez decided to make a frontal assault on her remaining debt with the help of side hustles.
How did she do it? Velez, now a senior social media editor at The Daily Beast in New York, took up eight types of side hustles while working a full-time job. She did social media consulting, freelance writing, took paid surveys, walked dogs, cat sat, child sat, did background television work, and even earned money as a mystery shopper.
Where did she find the time? Simple. She sacrificed most of her personal time. “I would work my normal hours, nine to five or six to 3:30 and then the rest of the day I would do my side gigs. I didn’t really do a lot of activities,” Velez says.
Sometimes her dog walking would double as a date with her significant other. And her nights would turn into overnights as an extra in a scene or finishing up a writing project. Velez also reduced her already low spending, too. She opted for free walks to Central Park when she needed time with her friends. Since graduation, she has held down costs by living with roommates and now her significant other.
Velez is not alone. Estimates of the number of workers with side hustles—either formal or informal—are all over the lot. But the information in the Federal Reserve’s May 2019 Report on the Economic Well-Being Of Households In 2018, based on a survey of more than 11,000 households in October and November of last year, is probably as good as any.
According to the Fed survey, 30% of adults engaged in at least one gig or informal paid activity in the preceding month, investing a median of five hours into their side hustles. Only 3% had actually worked for a tech platform, such as Uber or TaskRabbit. But the Fed defined side gigs broadly to include all sorts of informal work, including holding a garage sale to raise cash.
That makes sense since this survey is aimed at looking at how households get by; it is perhaps best known for its conclusion that 39% of households couldn’t pay an unexpected $400 bill without borrowing or selling something.
How did Velez settle on her side hustles? Mostly trial and error. Walking dogs in her neighborhood was steady enough that she generated on average an additional $200 monthly (up to $20 per walk) so she stuck with it. Her freelancing gigs were steady, as well, and became a dependable stream of income.
She kept her freelancing going and occasionally still does it along with the dog walking. Velez’s other side hustles were spotty. Some gigs gave her enough per project that she would meet her monthly goal. Being an extra was lucrative enough that it didn’t require the consistency of dog walking to be worthwhile. Other hustles, such as mystery shopping and taking surveys, were more sporadic and not particularly well paid.
So how do you find the best and most lucrative side hustle for you? I posed the question to Velez and to Tiffany “The Budgetnista” Aliche, a financial educator and personal finance expert out of New Jersey.
There are so many possible side hustles out there, how do you know which one is right for you?. Aliche’s response makes perfect sense: “People are always looking for the magic wand—there isn’t one. So, to me the most effective side hustle is the one where you’re willing to put the work in.”
Easier said than done, perhaps. But Aliche suggests that people try to align their side hustles with what they went to school for or what they do in their main job. That way, you don’t have to invest time and money learning a new skill or gaining new credentials.
“When I was teaching preschool,’’ says Aliche, “my side hustles were babysitting and I would tutor. Because I was already a teacher, I could charge premium rates to parents who wanted me to babysit or tutor. . . . [I] already came with a background check.”
In Velez’s case, she was able to stick with freelancing because she had media connections and skill, and it helped her build even more skills. That’s why she still does it. But dog walking and child sitting also became consistent side hustles because of the proximity and repeat nature of those jobs. The pet owners and parents she worked for were usually within a short walking distance of where she lived and they used her services repeatedly. The takeaway is convenience can go a long way toward helping you stick with a side hustle.
Velez kept track of her debt payoff progress by setting income goals.
“I set a payoff goal . . . and then I figured out how much I needed per month in that amount of time to make it happen.” says Velez. “You need to figure out how much a month you want to pay toward your debt. After you have a budget toward your debt payment each month, if you still need a few hundred dollars to subsidize that payment goal you can subsidize the rest of that money by picking up a side hustle.”
For example, Velez noted, if she needed an extra $300 that month to meet her goal of paying $1,600 towards her loans, she would calculate how many dog walks and freelance writing gigs she needed to earn that extra $300.
Motivation was a crucial piece of Velez’s debt-pay-down puzzle. She kept herself encouraged with crafts and a host of accountability partners. She created a decorative chart in her planner and “each month when I met my payoff goal I put a ladybug sticker next to it.” (Yes, she still likes stickers at 27.)
Stickers and print planners may not be your thing, but there are debt payoff apps you can download to your phone, tablet or computer to provide the same sort of reinforcement. Look at Forbes Advisor’s list of the four best debt management apps and top budgeting apps.
The second motivation came from her loved ones and her social media followers. Velez announced her payoff plan on her Twitter and Instagram accounts and in a detailed online article. Her significant other didn’t have any debt leaving college and Velez recalled how shocked he was to learn of her financial situation.
“He made me see this wasn’t normal,” she said. “He was definitely a major player in my decision.”
When she posted her financial objective and updates, she received encouragement, support and inquiries about her progress. She said the comments and questions about her student loan debt held her to her word.
If you’re sacrificing your free time, as Velez was, shouldn’t it pay off? Aliche reports an Uber driver she met had mapped and tracked the times and areas where he could get the most customers on a spreadsheet. He even included the weather on his spreadsheet.
“He was able to find trends. So [he] could tell you when it rains where [he] makes the most amount of money. [He] could tell you that [he] makes the most money between 6:00 and 10:00 AM so it doesn’t make sense for [him] to be out in the afternoon,” she said.
Velez hasn’t stopped side-hustling and she’s still hard-core budgeting. She’s wisely using the momentum from paying down her debt to rebuild her emergency savings. “I put the same amount I would take from my paycheck and put on loans to my savings now. “ The extra dough from her gigs is now her play money.