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Are you tempted to take on a side-gig to supplement your monthly income? Side-gigs can be a terrific way to make some extra cash by doing something you enjoy.
A Nation of Side Hustles
You're not alone in choosing to boost your bank account by taking on a side job. Opportunities to make extra money abound throughout our economy. Millions of people take on independent work in fields such as:
- Web Content Writing
- Pet Care
- Grocery Delivery
- Craft Selling
Although the jobs themselves might be wildly different, there are crucial similarities. The majority of these types of positions are temporary jobs that pay when you complete the assignment. The flexibility inherent in a side-gig is a terrific benefit to many people.
Another similarity that on-demand jobs hold is that they don't come with benefits. You're responsible for managing your side-hustle income. For instance, you'll most likely need to pay taxes
on the money that you make outside of your regular job.
Despite the lack of benefits, working in the gig economy is a terrific way to help meet your financial goals. Let's check out some of the ways that a side-gig can help grow your wealth.
Maximize Your Money with a Side-Gig
Combine your hard work with money-savvy ways to make the most of the additional income.
Here are five ideas for making the most of your side-gig money.
No.1 - Start a Savings Account
Do you have a savings account
? If not, now is the time to open one. Storing cash in a savings account at your bank or credit union is a terrific place to keep it safe until you need it.
notes that, although the interest rate returns can be low, maintaining a healthy savings account is smart. Get in the habit of saving a specific percentage of your side-hustle income each month to help you reach your goals.
A savings account helps to pay for major purchases, vacations, and emergencies. Experts suggest that you save anywhere from three months up to a year's cash
as a crisis cushion.
No. 2 - Real Estate Down Payment
Do you want to buy a home? If so, use some of the income from your extra jobs to build a down payment fund. There's no doubt that you'll make yourself a coveted buyer if you have a substantial amount of cash for a down payment.
Mortgage lenders typically offer more advantageous loan packages to borrowers who can put down twenty percent. You won't need to include private mortgage insurance
(PMI) in your home loan payment if you cross the twenty percent down payment threshold. Avoiding PMI will save you thousands of dollars over the life of your home loan.
No. 3 - Pay for College
Plenty of people assume a side job to help pay for college. Start putting money aside now if college tuition costs are in your future. The Minnesota 529 College Savings Plan
is an excellent way to invest your money to cover higher education expenses.
No. 4 - Retirement
There's never a decade in your working life when you shouldn't think about retirement. Chances are, you'll have decades of post-work living to fund at some point in your life. Take advantage of the money you make doing odd jobs to boost your retirement savings
Side Note: Make sure you put in the maximum amount possible to your employer-sponsored retirement plan. Trust us; you'll be happy that you invested in an IRA or 401(k) when it comes time to leave the working world.
No. 5 - Fun
Never neglect to have some fun with your side-hustle income. Are you longing to travel to Europe? Maybe you want to buy that best-selling book by your favorite author. Use your odd job income to have fun!
Many people pull out credit cards to pay for the extras in life. The downside of this strategy is that you could end up with a large amount of debt or pay interest on your purchases. You'll avoid going into debt when you use a side job to finance your entertainment expenses.
When used wisely, your side-gig income can improve your financial position and help you to thrive. Taking part in the gig economy can give you the extra burst of cash necessary to help you meet your financial goals.
Note: parts of this article were sourced from MarketWatch, the Balance, The Consumer Financial Protection Bureau and MNSAVES
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