Samantha Sands lost her public relations job two weeks after the coronavirus pandemic shut down much of the country. She was able to maintain some work on contract, but as the economy faltered, many clients put her PR services on pause. So she got creative.
“I’d worked as a bridal consultant during college, and it was a fun job with good commission if I did well,” recalls Sands, who’s in her mid-20s and lives in San Diego.
Bridal consulting may not seem the obvious choice during a pandemic that has resulted in the postponement and downsizing of many weddings. But Sands has been able to find enough clients planning small ceremonies in the near term or planning ahead for a future wedding 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 from each check. “We don’t know what the future holds, and I would rather be safe than struggling.”
With the unemployment rate still hovering near 8 percent and millions out work, a growing number of Americans like Sands have started to pick up side hustles and contract work to help cover expenses and secure some savings.
The number of freelancers in the U.S. is growing
The growth in side hustles and freelance work began long before the pandemic. More than 57 million Americans freelanced part-time or full-time last year, representing about 35 percent of the total workforce, according to the nonprofit organization Freelancers Union. But that number’s risen even more in the pandemic as those who lost work have sought out new income sources to cover bills and full-time workers have picked up extra work to bolster their savings in the face of a slowing economy and uncertain future.
Two million more Americans have started freelancing in the past 12 months, according to a new study from Upwork UPWK , a freelance job platform. Not surprisingly, given the millions of jobs shed in the pandemic, the share of Americans earning a full-time living freelancing has grown as well.
Upwork’s chief economist Adam Ozimek cites the economic uncertainty that followed the spread of the pandemic and the temporary (and sometimes permanent) closure of businesses nationwide, which prompted many to begin freelancing for the first time. At the same time, he notes new demand among businesses for independent 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 supplemental $600 weekly unemployment benefits offered through the CARES Act expired on August 1. Personal finance site DollarSprout’s recent “Side Hustle Report” survey found 27 percent of respondents are relying on side hustle income to cover their monthly bills.
For others, the side hustles are a means to set aside a little more in savings.
In a new survey by financial wellness app Acorns (where I’m the Chief Education Officer) and Opinium Research, a third of respondents surveyed said they had already picked up a side hustle alongside their regular jobs, and nearly 20 percent 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 additional income, Acorns launched a new Job Finder feature, powered by ZipRecruiter, which includes millions of listings not just for full-time jobs, but part-time roles and side hustles, too.
Relying on freelance gigs or using traditional side hustles as a main source of income does come with some additional considerations.
If you aren’t working full-time, you’re typically responsible for purchasing your own health insurance, which can be costly. And if you’re self-employed, you also have to pay a 12.4 percent Social Security tax (combining the employee’s and employer’s share) on up to $137,700 of your net earnings and a 2.9 percent Medicare tax on your entire net earnings. You are also able to deduct business-related expenses, though, which can help lower your overall tax bill.
Viviana Rivera, a tax accountant and money coach, recommends setting aside up to 35 percent of any side hustle money you earn in a high-yield savings account, which can be used to pay quarterly estimated taxes.
How can you find the right side hustle?
Finding the right side hustle can be challenging—even more so in the midst of a pandemic, when safety concerns also factor into the search. Many successful side hustlers have turned to jobs that can be done virtually or that require limited physical interactions with other people.
Some of the most popular hustles cited in the Acorns survey include reselling items, virtual administrative support, tutoring and creative pursuits like blogging, which can all be done virtually. Other popular hustles like dog walking can be done outside and with limited exposure to other people. Many skilled workers are also picking up virtual side hustles that tap their expertise and can pay more.
Fiverr’s most recent “Freelance Economic Impact Report,” published in May, found that there are nearly 6 million skilled freelancers now working in creative, technical or professional positions in the U.S. Most are picking up work through word of mouth (67%), social media (23%), and online marketplaces like Fiverr, Freelancer and Upwork (18%). New York, Chicago and Los Angeles are the three biggest markets, with more than 1.2 million skilled freelancers in 2019 earning nearly $53 billion. But the report notes that the number of skilled freelancers in smaller markets like Austin and Nashville is also growing rapidly.
A growing need for skilled freelancers
Jandra Sutton’s hours at a publicity firm were reduced not long after the pandemic-induced lockdown. “Though work was slow, I realized I could offer extra services to the few clients we did have—things we typically don’t offer—in order to make their lives as busy entrepreneurs easier,” said the 31-year-old, who lives in Nashville.
She ran the idea by her boss and, once she had her approval, offered a client she was working with a range of expanded services from ghostwriting to graphic design to creating presentation slides. “I loved the idea of being a one-stop shop for an entrepreneur’s creative needs.”
Within a few weeks, a second client reached out. She didn’t have enough work to necessitate hiring someone full-time, but was spending a lot of time trying to find the right people to do several different, one-off projects. So Sutton took many of the jobs on for her. “I realized there was an opportunity forming,” she said. After a month of seeing her side-gig workload increase, she launched her own creative agency, The Wildest Co.
Although she still works at the publicity firm and enjoys her job, Sutton said she’s relished the opportunity to pick up additional creative work—and income. She’s making about $3,000 per month and now has five clients. Almost everything she’s earned has gone straight into savings, or into building her side business.
The non-monetary benefits of side hustles
Singer-songwriter Alissa Musto had been 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 short trips and cancel remaining 2020 sailings.
Since then, the 25-year-old former Miss Massachusetts has begun 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 her ship—picking up work as an Instagram influencer and even filming lessons for a piano-playing teaching app.
So far, she’s made more than $1,200, and she expects her earnings to pick up in the coming weeks. “For the most part, I look at these side gigs as having a little bit of extra spending money, so I don’t feel as bad spending money on things like Starbucks SBUX or a new outfit here or there—things that I honestly wouldn’t even think twice about when I was working full-time.”
She’s also found other less-obvious benefits of picking up side gigs, especially as the pandemic has dragged on and it remains unclear how long it will take for the cruise industry to fully recover. “I feel like I am still being moderately productive and working on my brand rather than just sitting around waiting for my industry to resume. And it’s developed other skillsets of mine that I don’t normally get to use,” said Musto, who’s currently living in Massachusetts. “And having these side gigs has helped me tremendously mentally during the pandemic because it has given me a way to exercise my brain and contribute.”