30% of workers rely on second jobs to make ends meet. (iStock)
Side hustles are becoming more common, especially among younger generations who haven’t yet built wealth. As of February 2024, 22% of US workers have a side job. PYMNTS Survey found.
The money earned from these side jobs is used to cover basic living expenses rather than as discretionary income or savings. Of his 22% of workers who have side jobs, 53% are consumers living paycheck to paycheck. Additionally, about 30% of workers surveyed said losing extra income would be a serious blow to their financial stability.
Even high-income earners rely on side hustles to save and meet other financial goals. These high-income earners use both passive income sources, such as investments, and active income sources, such as side hustles, to increase their income. According to the PYMNTS study, about 22% of high-income earners earned extra income through active side hustles, and 20% earned extra income from passive income sources.
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Gen Z is working on more side hustles than any other generation
The generation that most frequently takes side hustles is Gen Z. According to a PYMNTS study, 32% of Gen Zers report having at least one side hustle.
Because Gen Z is new to the workforce, many work in lower-paying jobs than older generations. Moreover, they make a living from multiple jobs and gigs. Many of the younger generations are turning specifically to selling second-hand goods as a way to earn extra income. According to a PYMNTS study, approximately 47% of Gen Z consumers have sold a used item within the past year.
Compared to older generations, Gen Z has significantly lower net worth because they don’t have enough time to work. The average young adult household’s net worth in 2022 was $11,200. St. Louis Federal Reserve Bank Investigation found. According to the survey, the average net worth of all adult households in the United States was $192,100.
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Nationwide household debt is increasing
The debt of Americans as a whole is increasing across the board. Household debt in the fourth quarter he increased to $ 17.5 trillion. Federal Reserve Bank of New York investigation Said.
Among household debts, home loan balances have increased the most, with the total balance outstanding nationally now at $12.25 trillion. As credit card debt increased by $50 billion, credit card balances also increased significantly and now stand at $1.13 trillion. Auto loan balances continued to grow as well, increasing by $12 billion and now at $1.61 trillion.
And as the debt increases, the delinquency rate also increases. As of December, about 3.1% of all debts were at some stage in arrears. Credit cards and auto loans lead the way in delinquencies.
“Delinquency rates for credit cards and auto loans remain above pre-pandemic levels,” said Wilbert van der Klaau, economic research advisor at the New York Fed. Said. “This indicates increased financial stress, especially among young people and low-income households.”
As of the end of last year, about 8.5% of credit card balances and 7.7% of car loans were in arrears.
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