Working two jobs: How the side hustle is helping millennials get ahead in a challenging economy

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When Melissa Morgan left her full-time job at a boutique digital design agency to launch her own consulting business, her side hustle in voice acting gave her the financial breathing room and confidence to make the move.

The 27-year-old started voice acting as a cartoon purple bird for a YouTube show eight years ago while she was a student at the University of Waterloo. The part-time gig, which demands between four to seven hours a week, has allowed her to pursue a passion in acting while generating extra income to supplement her salary. More than that, it exposed her to new people and industries that made her look at the traditional working world through a different lens.

“The advice that was always given to me by family members and colleagues was to pick a career path, stick with it, fit myself into a box and become really good at one thing,” Ms. Morgan said.

“But I’ve never had this kind of financial freedom until now. There’s a misconception that you can’t find stability without a 9-to-5 job, but that’s a dated way of thinking.”

For a generation that graduated in the aftermath of the 2008 recession, a side hustle is not only an avenue to make extra money or delve into an interest. It’s also a means of survival in a work force fraught with layoffs, dwindling benefits and low wage increases.

About 30 per cent of Canadians participate in some form of informal gig work, according to a 2019 Bank of Canada survey. Of that group, 37 per cent said they need to earn money as a result of weak economic conditions such as stagnant wages, reduced hours and pay, or job loss.

Side hustles can be anything: buying and selling old furniture, developing news apps, writing corporate blog posts, producing podcasts, or selling homemade candles online – whatever interests generate additional income.

Job losses caused by the pandemic have heightened worries about the need to add a second stream of income. A U.S. survey in April, by Austin, Tex.-based Self Financial Inc., found 54 per cent of respondents said they are planning a side gig to earn extra income because of COVID-19.

When some of Ms. Morgan’s consulting contracts were put on hold or cancelled in the spring, she dedicated more time to her voice acting job and other projects that were less affected. Before the pandemic, her side hustle gave her an additional income stream in case she faced layoff, while also allowing her to be creative outside of her job.

She decided to go into business for herself when she found out the design agency she worked for charged clients a rate that was effectively twice her own salary. Since then, Ms. Morgan said she has doubled her income and her growing branding and consulting business has hired contractors to take on more projects. And she’s still voice acting on the side.

“Even though my career has grown, it’s something that’s still really fun for me,” Ms. Morgan said. “I consider it a paid hobby.”

Jessica Moorhouse, who graduated from university in 2009, was working in marketing when she started a personal finance blog that has since expanded into a podcast and online courses. Although she had a traditional 9-to-5 job, she felt the need to recession-proof her career by adding income through a variety of side hustles.

“It’s so important, especially for millennials – and most of us realize this because that’s why we get side hustles – to not just depend on one stream of income,” Ms. Moorhouse said.

In 2017, she left her full-time marketing role at a law firm to pursue a career as a financial counsellor for millennials. The earnings from this and her other extra gigs amounted to only half of her salary at the firm, but she needed to dedicate more hours away from her full-time job to grow her businesses. The move also gave her the flexibility to pivot from one project to another, if need be.

Not all side hustles grow into full-time businesses. If the intention is simply to generate extra money, people should budget their working hours to avoid conflicts between the side hustle and full-time job, says Vancouver-based certified money coach Kathryn Mandelcorn.

But if the goal is to turn the side hustle into a career, then people should identify how much they need to be earning to leave their 9-to-5 job. Side hustlers will likely need to leave their full-time employment before their business profit matches their salary, so be prepared to take a significant pay cut, Ms. Mandelcorn said.

Regardless, side hustles should be managed like a small business. Even if someone is generating only a few hundred dollars a week, they should put the income into a dedicated bank account to track expenses and revenue. She also said that many first-time side hustlers fail to put a percentage aside to pay self-employed or freelance income taxes the following year.

In some cases, side hustlers who did not track their business finances ended the year feeling like they didn’t make any money, only to be hit with a hefty tax bill.

“It’s still a business that you have to put time and energy into,” Ms. Mandelcorn said. “I’ve seen people put time and energy into side hustles, and then the failure feeling comes from thinking that there’s no money in it, but really it’s not having clarity into what they’re earning.”

You had your best-laid plans and then COVID-19 came along and hammered the entire economy. But you’ve got this – if you have the right information. Join Rob Carrick and Roma Luciw on Stress Test, a podcast guiding you through one of the biggest challenges your finances will ever face.