4 Reasons Why Everyone Needs Side Income

Xin Lu — Fri, 22 Oct 2010 12:00:43 +0000

I have spoken to many friends and colleagues who have expressed that they would like to earn some side income outside of their primary jobs, but most of them do not consider extra income to be a necessity. In my opinion, side income is something everyone needs. Here are a few reasons why you should start building an income stream outside of your main job. (See also: 5 Money Making Activities You Can Do Today)

1. It's a Personal Safety Net

Your side income can be your personal safety net against unemployment. Job security is really a thing of the past, and you should be prepared to lose that income at any time. In many ways, having a good side income is better than having an emergency fund, because an emergency fund will run out, but you can build your side income further if you lose your job. If you do have an emergency fund, your side income will also make that fund last a lot longer.

2. Control Your Income

Last year I did not get a salary raise at my job due to the economy. However, I did give myself a "raise" by increasing my side income. I have practically no control over the performance of the greater economy and my employer, but I do have control over my side income. Some of my colleagues and family members actually suffered salary cuts last year, and if they created some side income then they could have made up the difference and perhaps given themselves raises, too. Adding a side income gives you greater control on your finances and helps fight against the recession's toll on your household.

3. Have More Savings

This one is a no brainer. If you can earn more income and spend the same amount, then you will be able to save more and invest more. Every little bit of extra money will bring you closer to financial independence, and everyone could use more savings and less debt.

4. Use Your Time More Productively

In the past few years, I have learned quite a bit in the process of building up my online income. At first I did not even make minimum wage for the effort I put in, but I felt productive and learned a lot. I did work that was worthwhile and interesting to me.

Most people want to have some side income but never seriously pursue it because they are too comfortable with a steady paycheck and don't have the motivation to do something extra outside of their regular jobs. Then there are others who simply do not know where to start. Here on Wise Bread there are many articles about making extra cash. For example, I have written about selling used books and writing online. The most important thing is to just start something, and maybe one day that side income will replace your full-time job entirely.

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: