We’ve written about how to maximize the benefit of your side hustle before, but now what happens when that work has dried up? Step 1: don’t panic. There are a wide variety of options for part-time workers to reinvest, reassess, or recuperate as needed.
We’ve written about how to maximize the benefit of your side hustle, but now what happens when that work has dried up? Time to hang up the cape and cowl and make sure that every mild-mannered alter-ego has a skillset that’s just as robust as those of their secret identity.
It’s kind of like being a superhero—by day, a data analyst, but by night a freelance artist. Just like how Batman and Bruce Wayne are two sides of the same brooding coin (or more aptly, how Harvey Dent and Two-Face are two sides of the same, well, face), more and more people have a side hustle in addition to their regular work. A 2019 Bankrate survey found the number of folks with a side gig make up almost half of the workforce at 45%, and a sobering 30% of people need that extra income to cover day-to-day living expenses. Though it’s not as glamorous as saving (or destroying) Gotham, many people find deep satisfaction in their part-time work, with 27% of those surveyed admitting to enjoying their side gig more than their primary job.[1]
Side jobs come in many shapes and forms, from freelance writers to Etsy crafters to part-time retail workers. However, due to the COVID-19 pandemic, both day job and side gigs have dried up, and millions of people are now scrambling to find work. We’ve written about how to maximize the benefit of your side hustle before [2], but now what happens when that work has dried up? Step 1: don’t panic. There are a wide variety of options for part-time workers to reinvest, reassess, or recuperate as needed. It’s time to hang up the cape and cowl and make sure that every mild-mannered alter-ego has a skillset that’s just as robust as those of their secret identity. Here are a few options employees can explore during this period of uncertainty.
Pivot
Nearly 30% of workers have either lost their job or taken a pay cut due to the coronavirus, and 10% say they’ve experienced both, according to a Pew Research survey.[3] It’s no wonder that there are millions of desperate workers turning to delivery services apps and other gig work like UberEats or Grub Hub. Workers thinking of entering this workforce should be cautious, as learning to navigate the internal structures that determine hours and pay for services like Instacart or DoorDash can have a surprisingly steep learning curve and use predatory employment tactics. “Most on-demand companies offset thin profit margins by offloading the risk onto workers, who are classified as independent contractors and have to provide their own vehicle and gas,” the Washington Post cautions. “There is a lack of basic employee protections. Take-home pay is volatile, and there is no minimum wage or overtime.”[4]
Another, sometimes surprisingly easier, option is to take in-person services online; a surprising number of jobs once thought to be impossible to do from home are now offered over the web. Yoga teachers, babysitters, tutors, therapists, and even doctors are doing virtual work. While it may not have been feasible before, everyone is adapting to a more internet-centric world, and the boundaries of what can be digitized are being pushed further every day.
Learn a New Skill
Learning to code online, picking up knitting, or earning additional certifications can help bolster both full-time work as well as side jobs. Though this may feed more into a long-term plan, if there are additional career goals that have fallen by the wayside, now may be a good time to pick those back up. Though additional skills may not always have immediate cash-in-hand benefits, it’s not a bad idea to play the long game to add a line or two to onto a resume, especially for those currently out of work who will soon need to start job applications.
Prioritize Debt Payments
If it’s between debt and retirement savings, pay off those loans. Temporary forbearance allows those with federal student loans to skip payments penalty-free from March 13th – September 30th 2020, and both defaulted and nondefaulted Direct Loans, FFEL Program loans, and Federal Perkins Loans, as well as defaulted HEAL loans borrowed from the U.S. Department of Education have had their interest rates temporarily set to 0% for the same period as well.[5]
While it’s tempting to forego the monthly payments and instead save for retirement, if it comes down to one or the other, paying off loans is the financially savvy choice. The temporary 0% interest rate makes this a great time to pay down the principal balance of the loan (or loans) without having accumulating interest eat into each payment. Paying off loans have a set ROI in the interest rate, and while the economy is recovering from the steep downturn we saw in March, investing is by nature unpredictable. It’s better to go for a surefire win that saves even more down the line.
Take five
While we can’t all be billionaires like Bruce Wayne, for those part of the 27% of people taking on additional work to supplement savings or retirement, taking this time to breathe, decompress, and relax without immediately hopping into new part-time work is absolutely fine. This is a trying time, and even the CDC acknowledges the additional mental toll living in a pandemic, not to mention the additional employment woes that necessarily come with it.[6] If able to do so comfortably, it’s not the end of the world for gig economy workers take a few weeks off. Not only do the physical and mental exhaustion (or even burnout) from overwork make us more susceptible to infectious disease, but it also exacerbates the preexisting emotional stress caused by social isolation, fear, and uncertainty that many are feeling.[7] Reconnecting with friends and loved ones, taking time to destress, and taking a few moments to recalibrate isn’t the same as immediate cash flow, but it can help ensure that we have the strength and resiliency to continue your work long-term without burnout. After all, even Bruce Wayne isn’t Batman 100% of the time.
[1] https://www.bankrate.com/personal-finance/side-hustles-survey-june-2019
[2] https://www.bcgbenefits.com/blog/side-hustle
[4] https://www.washingtonpost.com/technology/2020/05/23/gig-work-instacart-shipt-amazon-flex-doordash/
[5] https://studentaid.gov/announcements-events/coronavirus#zero-interest-questions
[6] https://www.cdc.gov/coronavirus/2019-ncov/daily-life-coping/managing-stress-anxiety.html
[7] https://www.cdc.gov/coronavirus/2019-ncov/community/mental-health-non-healthcare.html
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.
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