There are 5 reasons to side hustle. But some people don’t even understand the term. So what is a side hustle and why would you want one?

Side hustles are flexible, part-time jobs that people typically engage in outside of their normal working hours. There are five main reasons that people have side hustles, according to the editors of

  1. For additional money to pay off debt
  2. To subsidize retirement spending
  3. As a way to test a new career or business idea 
  4. To finance a short-term goal — a vacation or wedding, for instance
  5. Members of the FIRE (financial independence/retire early) community use side hustles to super-size their savings without down-sizing their lives.

Let’s take a look at how a side hustle can help with each of these goals.

Using a side hustle to pay off debt

If you are among the 65% of college graduates who borrowed to finance school, there’s a good chance that you’re deeply in debt. The Institute for College Access and Success estimates that the average graduate has $29,200 in student loans.

Assuming a 4% interest rate and a traditional 10-year repayment schedule, your monthly payment on that loan is $296. Tough to afford on a starting salary?

Then consider signing up with Rover, which will allow you to charge $12-$20 each half hour to walk dogs. (You set the pay, giving Rover 20% of your earnings for making the introductions and handling payment. However, rates for walking one dog typically run $15; two dogs can bring in $20.)

So, if you walk one dog every day for a half-hour, you’ll earn a minimum of $360 per month, after paying the site’s commission. If you put that entire amount against the loan, you’ll not only pay off your debt, you’ll pay it off four years early, repaying your student loans in six years, rather than 10.

Using a side hustle to supplement retirement

Low interest rates have wreaked havoc with retirees hoping to fund retirement via the traditional method — bonds. The allure of bonds is simple: Ten-year Treasury bonds are considered about as safe as an investment can get, which is important to someone who no longer has time to recover from investment losses.

However, where historic bond returns are in the 5% range, today’s returns are in the basement. The practical result: For each $100,000 invested, the traditional return was $5,000 annually or roughly $417 per month; today it’s about half that. That’s left retirees with a difficult choice: Take more risk by investing a larger portion of assets in far more volatile options, such as stocks, or find other ways to make additional income.

An increasing number of seniors have made the latter choice, signing up with sites such as Silvernest to rent out one or more empty rooms in their homes.

Unlike AirBnb, Silvernest connects homeowners with extra space with long-term renters. These renters pay less on a daily basis, but rent all month. That provides two benefits — regular income and, potentially, someone to share household chores. It’s important to make sure you renter is thoroughly background and credit-checked, however. Also establish what renter behavior is acceptable and not in a formal, written contract. That will make it easier to enforce the agreement, should landlord/tenant relations ever go awry.

Using a side hustle to test a new career

Dan Simms was a salesman, traveling three hours each day to get to and from work. While he was professionally successful, the commute was killing him. He longed for change. An avid animal lover, he decided to try out a dog-walking/watching business. 

He has since jettisoned the day job and now earns $5,000 a month, after expenses, with his full-time animal care business.

Likewise, John Michaloudis was an accountant for 15 years. But he realized that many of his colleagues were struggling to understand how to use Microsoft’s spreadsheet program, Excel. He created a class on a site called Thinkific. He now has some 95,000 regular subscribers to his class. The only accounting he does now is count his own money.

While not every experiment works as well as these, the freelance economy gives wannabe entrepreneurs a low-risk way to determine whether a hobby could turn into a business.  Don’t know where to start? Take SideHusl’s quiz to get some suggestions based on your unique combination of interests, skills and resources.

Using a side hustle to finance a short-term goal

In 2014, Laura Gariepy was a human resources representative in Massachusetts, but she longed to move to Florida. Not wanting to add to her already substantial student debt, Gariepy worked nights and weekends in a nursing home, coordinating activities for the residents.

It took several months of working 50 and 60-hour weeks, but she managed to save the $7,000 cost of the move. She now freelances and lives by a lake in Florida.

Chris Mamula, author of “Choose FI: Your blueprint to financial independence,” taught climbing in his spare time. His goal was to pre-fund his daughter’s college education. She’s now 6 and he’s confident that he’s already socked away all the money necessary to pay her future college bills.

Super-saving for financial freedom

Josh Overmyer, 36, hopes to be financially free by the time he’s in his early 40s. A floodplain manager in a county building department by day, Overmyer spent several years driving for Uber to help kickstart his savings.

He quit driving for Uber after the site slashed its rate of pay for drivers, but he engages in a couple of other low-maintenance side hustles to keep his savings rate at a whopping 58% of his take-home pay.