The cost-of-living crisis has forced many people to put their longer-term financial goals on hold – as increased pressure on day-to-day budgets means things like buying a house or paying off debts have been put on the back-burner.
But for some, it seems side hustles are helping them keep their dreams and goals alive.
New research for F&C Investment Trust found that nearly a quarter (24%) of people with side hustles are putting some, or all, of the extra cash into a “rainy-day” fund for emergencies, while 27% plan to put the money in a savings account to help with long-term goals.
Aaron Adeniran, 32, from London, has been using graphic design skills he developed at university to help him build a deposit for a house.
He explains: “In my day job I’m a business analyst, but for over nine years I’ve taken on freelance graphic design and online services work as my side hustle.”
“While I love using the graphic design skills I developed at university, I don’t think I’d ever turn my side hustle into a full-time job. I like the benefits which come with the flexibility of taking on graphic design projects when and how I like,” Adeniran adds.
Some of the survey respondents also plan to use the money towards funding a property, while others are hoping it will help them to retire earlier.
The research indicates that people in midlife, aged 41-57, are particularly likely to be hoping a side hustle will help them retire sooner.
One in six (16%) meanwhile are using side hustle earnings to pay off debts.
Many people with a side project say it is helping them with their everyday living costs too, with 39% using some or all of the additional earnings to help pay their regular bills. Nearly a third (32%) use the extra income to fund non-essential goals, such as a holiday.
The research also indicates that side hustles are supporting savings goals across generations, right through to those who are using the extra money to supplement their pension.
Gen-Zs aged 18-23 were found to be reaping the biggest financial rewards from side hustles typically, earning £434 per month. Those aged 55-77 with a side hustle were found to be banking an extra £272 per month on average.
The research – which polled 1,500 people – found more than half (58%) started their venture to combat rising living costs. A further one in four (25%) started their side hustle to be productive and make some extra money in their spare time.
Beatrice Hollond, chair of F&C Investment Trust says it is encouraging to see some people putting the money towards long-term goals, adding: “Not only will this keep some financial goals alive, like home ownership or early retirement, but it may also help people reach their ambitions sooner than anticipated.”