It’s easy to think that your side hustle income, whether it’s from a regular babysitting gig for the people down the street, or one-off gigs filling in for friends at catering events, isn’t making that big of an impact on your financial situation. Some side hustlers can pull in more than $1,000 a month outside of their day job, sure, but if you’re more in the $100 a month range, it doesn’t mean that the extra money you’re making isn’t valuable.
In fact, it’s exactly the opposite: even an extra $100 a month can make a huge impact on your financial situation.
What earning “just a bit more” looks like long-term
When you manage your money on a monthly basis, it’s easy to forget how things add up over time. Let’s say you spend your entire 20s earning an extra $100 a month here and there from side hustles. You’ll end the decade with $12,000 you wouldn’t have had otherwise.
Twelve thousand dollars.
That’s a few pretty epic vacations, or a used car, or a good portion of a down payment on a house. Think of how grateful 30-year-old you will be that you took on all those “not a big deal” side hustles.
And if you invest it? Bananas.
Saving the extra $100 a month really adds up, but that’s just saving it. What if you invested the money in the stock market instead?
If we assume that your $100 a month goes straight into the market, and you earn 5 percent returns on your money for same 10-year period, you could end up with $15,757.00. That’s an extra $3,757 that your money earned without you doing anything.
There’s a good reason people call compound interest the eighth wonder of the world. With it, your side hustle bringing in $100 a month could end up netting you more than $15,000 in 10 years’ time.
It might also be the stay-out-of-debt trump card
OK, of all of the entry-level struggles we face, feeling like you can’t afford to do the things you want to do is way up there, so if you want to spend your side hustle cash instead of saving it, that’s cool. Whether it’s a membership at your rock climbing gym, or a few happy hours with friends, a lot of fun things cost money.
Since money can be tight when you’re staring down launching your career, paying rent and managing your student debt, that extra $100 a month in side hustle income can be the budget breathing room you need to give yourself a break, sans carrying a balance on your credit card.
Because true story: If you put $100 a month on your credit card, at 20 percent interest, it’ll cost you hundreds in interest while you pay it off. It’ll cost you more the longer you carry that balance too, and let’s be real, that’s how a lot of people do credit cards.
Your side hustle can be the interest-free, guilt-free credit-card replacement plan to keep you living in the style to which you’ve become accustomed.
…Or it could help you crush your student loans way faster
Take a second to think about how amazing your life — and your budget — would be if you didn’t have student loan payments anymore. Are you picturing it? Good. Your $100-a-month side hustle can make that a reality for you sooner than you think.
If you’re carrying $37,172 in student-loan debt right now, which is the average debt of the class of 2016, you’re looking at more than 15 years to repay that debt at $300 a month. If you add in your $100 a month side hustle income, you’ll knock more than five years off of your student loan repayment timeline.
How does getting out of debt five years faster sound? (I think it sounds pretty great, too.)
So the next time you think to yourself “Oh, $25 a week is nothing,” remember that whether you’re saving, investing, spending or paying down debt, the extra $100 you make side hustling is actually a huge help to your financial situation. High five.
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