What would you do if you were to lose your job? What would you do if the income from your job wasn’t enough to help you reach your financial goals?
When people lose their jobs, one of two things usually happens. You may go into full on panic mode, scrambling to figure out how you’re going to pay bills or you may have an emergency fund to keep you afloat while you find new employment.
Losing a job isn’t a fun thing to think about. You want to believe that you’re needed in your company and your job status is secure, but life can be unexpected. Layoffs happen and surprise expenses pop up. The common advice to handling life’s uncertainties is to have an emergency fund.
An emergency fund is something you use when the unexpected happens. The amount to have in an emergency fund varies. Some recommend having at least $1,000 in a starter emergency fund. Most would recommend three to six months of expenses for a fully funded emergency fund.
Emergency funds can be the saving grace in times of need. Everyone should have one. The only problem with them is they can take a while to build.
Tight paychecks, debt payments, and high costs of living can make saving for an e-fund difficult. Saving the recommended three to six months of expenses can take a few years for many people.
So what are you to do if you lose your job or a big expense pops up when you don’t yet have a fully funded emergency fund? You start a side hustle.
Building a freelance business rather than an emergency fund
I got started doing freelance writing and digital marketing a few months ago. The decision to side hustle was born out of a need to help me achieve my financial goals faster. Earlier this year, my work contract ended and I didn’t have another job lined up.
My anxiety would have been through the roof, scrambling around to find a new job, while draining my savings. At the time, I didn’t have a fully funded emergency fund. Scary situation, right?
In the end, it wasn’t as scary as expected. I didn’t have to drain my savings and twiddle my thumbs while waiting for a new full-time opportunity to pop up. My digital marketing business was able to keep me busy and provide an income during the process.
The desire to diversify my income situation is what led me to start a freelance business as a side hustle. I didn’t want to be completely reliant on my full-time job to provide an income.
The income from my job wasn’t a lot, so saving for a fully funded emergency fund would have taken me several months to achieve. I had budgeted and cut back all I could, so the only option left was to make more money.
Emergency funds are great and everyone should have one but is also important to consider picking up a side hustle. Here are a few reasons why.
Side Hustles Allow Me to Diversify My Income
It can be stressful when your full-time job is your only source of income. You have to depend on it to completely fuel all your financial goals. The thought of getting laid off and having to spend months job searching can make you go into panic mode.
I don’t want to have all my eggs in one basket. Having multiple income streams makes me feel more comfortable in my money management.
A Side Hustle Allows Me to Save Faster
I’ve always been good at budgeting my money, but there came a point where I knew I needed to earn more to hit the multiple saving goals I had. Budgeting and cutting expenses can help but there is a limit to them. There is only so much you can cut back.
The money I make side hustling allows me to contribute to my multiple saving goals like retirement, emergency savings, and a travel fund.
Networking
One of the best ways to grow professionally and find new opportunities is through expanding your network. Admittedly, this was hard to do at first since I live abroad and work in a job that doesn’t fully align with the career trajectory I want.
Through my freelance writing and marketing side hustle, I’ve been able to explore my interests in online writing, community building, and digital marketing. Connections have been made that I otherwise wouldn’t have gotten if I didn’t start a blog and begin connecting with others in the field.
None of this would have been possible had I stuck with just doing my full-time job. My side hustle has changed my situation for the better. This all happened because I decided to start a blog. My blog was the outlet that allowed me to make connections and land clients. It’s been great.
Final Word
Emergency funds are great, but they can take a while to fully build. Running a freelance business as a side hustle has allowed me to tap into a new network of contacts and skills. Its keep me busy during periods when I was in-between jobs and didn’t want to completely drain my savings.
My freelance business has given me confidence and let me grow in ways my full-time jobs haven’t given me the room to do. While full-time jobs can good, they aren’t the be-all end-all to achieving your financial goals and advancing your career.
How to Find Your First Freelance Client
8 Ways to Get Hired For More Freelance Gigs
6 Specific Things to do to Get Freelance Clients
Have you considered starting a side business? Do You think side hustles are a good way to reach financial goals?
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
I’ve been doing side hustles for the last few years. They have helped me eliminate over $10,000 worth of debt in two years. Everyone should have at least one side hustle.
I love this idea! There is limited earning potential with most part time jobs; however, that potential opens up so much more with freelancing. Good luck to you!