Average Americans use only one financial strategy to cover costs

Bankrate found that more than a third of Americans report having a side hustle, and those who do earn an extra $891 a month.

While many side hustlers use the extra income to supplement discretionary spending (37%), a fair amount use it to cover living expenses (36%) or pay down debt (20%).

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TheStreet sat down with Ted Rossman to look at the factors that are forcing Americans to work multiple jobs.

Inflation and interest rates have exacerbated the need for additional income

Younger generations tend to pursue additional income the most: 48 percent of Gen Zers and 46 percent of Millennials have a side hustle, though one in four Baby Boomers also have a side hustle.

However, the total number of workers with a secondary agitation almost doubled from 19% in 2017 to 36% in 2024.

Rossman explains the various factors driving Americans to seek additional income streams.

“It says a lot about the state of the economy,” he said. “While we praise the extra work ethic, I worry that this has been a good job market, yet so many people feel they need extra work to make ends meet. It’s very much a story about high inflation, high interest rates.”

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Rossman continues, “This year, the use of secondary income for discretionary spending exceeded necessary spending, so that’s a bit of an improvement over last year. But not many people use that money for savings, paying off debt, or investing. Although last year the side hustles were used more out of necessity to put food on the table and a roof over our heads.”

Delivery service jobs are some of the most popular side gigs.

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The future of the secondary economy

Although 32 percent of side hustlers believe they will need extra income indefinitely, the overall number of Americans with a side gig has declined.

Rossman explains how the trajectory of lateral trade is changing.

“It’s cooled down a bit – last year 39% had a side hustle, but this year only 36% do. The bigger change was the percentage of people paying for discretionary spending versus necessary spending with their extra income.”

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He notes that the extra income becomes a nice thing, not a necessity.

“The discretionary spending crowd is up ten percentage points in the last year,” he said. “I take this as a good sign that people are using side hustles to raise extra funds to go on vacation or buy electronics. It’s not a total cushion in the sense that I’m setting aside for investments or retirement or a rainy day.”

Rossman notes that the number of side hustlers may decline as inflation eases. However, given the tough job market, workers may still rely on headhunting as a safety net.

“It stands to reason that if inflation continues to cool, the sideways jitters may continue to ease a bit,” he said.

“But again, we’ve seen a weakening in the labor market. The unemployment rate rose from 3.4 to 4.3%. It’s still pretty low, historically speaking. But even in a good job market, many people flounder. So if the layoffs were to increase, maybe more people would work full-time or work full-time.”

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