US Consumers Funnel Side Hustle Cash Directly Into Paying Bills

Traditional 9-to-5 employment, and the bi-weekly paycheck, is no longer sufficient for a significant portion of the U.S. population, leading many to pursue alternative income sources known as side hustles.

As PYMNTS Intelligence found in the recent “New Reality Check” report on the pressures of living paycheck to paycheck, these supplemental income streams are now a common feature of modern financial life, with more than 4 in 10 consumers having some kind of side endeavor.

This trend is occurring as most U.S. consumers live month to month financially; as of April, 68% survive paycheck to paycheck, using their earnings immediately for bills and essentials. Amid this financial instability, nearly a quarter of U.S. consumers report having started or increased their side work in response to current economic conditions, where the impact of tariffs loom and inflation’s still a fact of life.

The Side Gig Is a Financial Lifeline

Consumers who live paycheck to paycheck with difficulty paying their bills are the most likely to earn money from side hustles, with half of these individuals engaged in at least one side endeavor.

For many of these consumers, side hustling is not for extra pocket change but is increasingly crucial for staying afloat and saving. The intensified pursuit of additional income comes against a backdrop where fears about rising consumer prices dominate.

The vast majority of consumers undertaking side hustles do so with a specific financial objective. For those living paycheck to paycheck, particularly those facing difficulties, necessity is often the driving force.

Paying for the Essentials

Covering basic living expenses is the goal most often cited as the top motivation. While 22% of all side hustlers list this as their most important reason, that figure rises significantly to 34% among consumers who live paycheck to paycheck with difficulties paying bills.

Overall, 38% of consumers list covering basic expenses as at least one goal for engaging in side work. Other important motivations include building savings or emergency funds, cited by 4 in 10 side hustlers overall, and funding specific purchases or experiences, a goal for 31%. Notably, those not living paycheck to paycheck are disproportionately likely to pursue side hustles for personal fulfillment, such as developing a new skill or exploring a hobby as a business.

Side hustles contribute substantially to the total income of those who engage in them, accounting for an average of 43% of a hustler’s total income. This reliance is even more pronounced among lower-income individuals; that share rises to a staggering 76% for those who earn under $50,000 annually.

Consumers engaging in side work alongside traditional employment earn $2,241 monthly from side work on average. Those who are self-employed earn $2,408, while individuals whose side hustles constitute their only employment earn $733 per month.

Grappling With Macro Pressures

The current economic climate, marked by worries over tariffs and inflation, has directly influenced the increase in side work. More than half of existing side hustlers have increased their workload in response to these conditions.

Among struggling paycheck-to-paycheck consumers with side hustles, nearly three-quarters are taking on more work due to current conditions. Specifically, 38% of struggling consumers began doing side work for this reason, and 36% increased their existing side job workload.

Looking ahead, 45% of all side hustlers expect to increase the time they spend pursuing additional income in the next six months. This expectation is particularly high among struggling consumers, with 61% of side hustlers living paycheck to paycheck with difficulty anticipating taking on more work.

In terms of demographics and employment status among side hustlers, 67% also work part- or full-time for someone else, while 24% have no other employment, and 8.8% are self-employed. Generation Z consumers are disproportionately likely to earn income from side work, with 55% doing so. For Gen Z, side hustles account for 57% of their total income.

Where the Money Goes

Many side hustlers manage their supplemental funds separately, with 7 in 10 depositing this income into an account other than their regular bank account.

These funds are allocated in various ways, including being spent on specific needs (nearly one-quarter), stored in a dedicated account (nearly one-fifth), invested (14%) and used for debt payments (12%). Consumers living paycheck to paycheck with difficulty are the most likely to use this side income to pay down debt, with 19% of side hustlers in this group allocating earnings for this purpose.