How secure do you think your job is?
Are you sure?
What would you do if you went in to work one day and found out you’re out of a job by next week?
That actually happened to me last week.
I lost my job!
After struggling to find good employment for nearly two years, I finally found a fantastic job this past summer doing ecological research—almost an exact match for my degree, wildlife biology. I loved the job but it was a temporary position that came with an annual cap on hours, which I discovered I was about to reach one week beforehand.
This summer, my GPS told me to cross this canyon. I said no.
I should be in full-on panic mode right now because we don’t have a fully-funded emergency fund, but I’m not. Instead, I’m quite happy: I got started almost a year ago as a freelance writer, and I was basically able to step into my second career the next day after my job ended.
I’ll have no problem making enough money to replace my lost day-job wages for the month, and if I play my cards right, I actually might come out with even more money than if I had been working.
My former boss is planning on opening another position soon to replace my missing spot, and I hope to get it back. And if not, I’ve got plenty of work to keep me busy and paid until I can find another job!
Use Your Side Hustle As A Safety Net
I think everyone should be prepared with a backup plan in case their day job falls through. For some people that might be an emergency fund, but for people with little to no emergency savings like me, we need something else.
Thus, I propose: the side hustle safety net.
It’s simple. If you don’t have an emergency fund, you need to have some kind of a backup. You can’t rely on unemployment assistance alone, especially if you’re in a lot of debt.
Related post: Make More Money: A Fear-Busting Game Plan To Start Side Hustling
Unemployment assistance is based off of how much you make. After taxes, I’d bring home about $1,520 per month—just enough to pay my rent, half of my debt payments, and no food.
Note: this isn’t a free pass to avoid saving for an emergency fund. You still need one. But they can take years to build up to proper levels, and so this is a fall-back in the meantime.
The One-Month Buffer: Here’s Why You Need It!
Even though me and Zach don’t have a fully-stocked emergency fund, we do save up each month for next month’s expenses. Throughout the month we put aside our income into a separate pot (a line item called “Next Month’s Money” in our budgeting program).
Then, at the beginning of the month, we already have all the money we need! No worries about scrambling to make rent or debt payments.
It’s a huge weight off our shoulders, and I have never been more grateful for it than now. I’m out of a job, but I can still pay my bills this month and focus on bringing in more money for next month.
What Makes A Good Side Hustle Safety Net?
Side hustles come in all shapes and sizes, but not all are great choices for a safety net. Here are a few things to think about if you’re planning on using your side hustle as a safety net:
High earning power
I don’t care how many surveys you do; you’ll never replace your day-job income with this side hustle. Instead, focus on making max money—start a business, or start freelancing. Choose a side hustle with the highest earning power relative to your skills and interests.
Freelance writing has been a fantastic side hustle for me because you can get paid very well for it. I started out a year ago making $50 per blog post, even though I was so nervous I thought I’d pee my pants. Now I don’t take on any new clients unless they pay at least five times that, and I’m far more confident.
Scalable
If you lose your job tomorrow, can you ramp up your side hustle to full-time proportions?
I currently work with three clients. Right after I lost my job I contacted these clients and said I have more availability; all three responded by giving me more work.
Then, I contacted three more potential clients from a conference I recently attended and was given even more work. Within three days I was already booked at a full-time level. Huzzah!
Flexible
You could just go out and get a job at your neighborhood McDonald’s—but where’s the fun in that? More importantly, will you be able to devote time during the day to finding a new job? I haven’t met a lot of professional employers who conduct interviews on Sunday nights.
Freelance writing is the ultimate flexible side gig. I can write stories at 1:47 AM if I want and take time off in the middle of the day if the mood strikes—as long as I get my work done by the deadline.
Related: How To Start Your Freelance Writing Career From Scratch: No Money, No Contracts, No Problem by Karen Banes
Thanks to my side hustle safety net, I’m not the least bit worried about losing my job. In fact, I may come out stronger than before. I can’t stress enough what a relief having this safety net is—I’ve gone from what would have been a potential financial meltdown to an unplanned but happy experience.
Do you have a side hustle safety net? If not, which one would you choose? Leave a comment below!
The post The Side Hustle Safety Net: Protect Yourself Against Job Loss When You Don’t Yet Have An Emergency Fund appeared first on Science Finance.
