New money wisdom doesn't come along very often — most advice about earning, spending and saving has been the same from the Bible to Benjamin Franklin. But a new financial imperative has slowly emerged in recent years: moonlighting.
Having a freelance side gig to your full-time job, or a supplement to retirement income, is not only a good idea, but it's also becoming a personal finance fundamental.
"I think there's no other way to live, which may sound extreme. But no one, even a federal worker, can guarantee their job now," said Kimberly Palmer, a personal finance writer for U.S. News & World Report and author of the upcoming book The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life. "I think everyone has to have something on the side."
Apparently, many workers agree. About one-third of freelancers at the online freelance marketplace Elance have full-time jobs, according to surveys by the company.
The advice to generate a side income might not rank up there with such money wisdom as "spend less than you earn," "save 10 percent of your income" and "don't carry credit card debt," but it is decidedly good advice.
And the time is right. The maturation of the Internet has made it easy, opening new sources of income and facilitating others. For example, a popular blog can generate money with plug-in ads. And several websites post freelancing opportunities, making side jobs easier to get.
Online marketplaces, such as eBay and Etsy, offer your products to the world at minimal cost. Delivery of freelance work, especially digital items, is quick, efficient and free via email or upload. Social media and blogging offer new and free ways to market your goods or services.
The time is also right because of shifts in the labor market. Not only has job security all but disappeared, but the attitude of employers toward moonlighting has turned from negative to, in many cases, positive. Your employer might even encourage it.
Developing a side hustle isn't a new idea, but now might be the right time to recommend it to most everyone with a full-time job.
Here are a few questions and answers to get you thinking about your new side gig.
Why would I want a side job? Making extra money is really only the starting point, but an important one. Extra cash gives you financial breathing room and can help pay for all those other financial imperatives, such as building an emergency fund, saving for kids' college and getting out of debt.
And many side gigs could be ramped up if you ever lost your full-time job, cushioning the blow of an unexpected layoff while you conduct your full-time job search, for example.
Palmer earns about $200 a month selling a line of financial planners via her online shop at etsy.com. It's not big money, but it adds up. She calls it the reverse "Latte Factor," alluding to a term coined by personal finance author David Bach to show how minor money leaks, like buying a daily latte at a coffee shop, can add up to big money. Similarly, smaller earnings add up too, Palmer said.
Just as important, you build entrepreneurial skills with a side business that you might not develop in your full-time job.
"Having something on the side can give us a sense of financial stability and career stability," Palmer said. "Employers want employees who have a sense of how to launch something and market something. Those are really common skills employers want in this new economy."
And the hard-to-measure benefit is the satisfaction that comes from providing a good or service that others are willing to pay for. "It really ends up being about much more than the money," Palmer said.
What side gig can I develop? Many side-giggers use their existing career skills, although others want to pursue hobbies and passions unrelated to their full-time jobs — perhaps an accountant playing in a rock band at night.
A sampling to get you thinking: Information technology consultant, writer/blogger, tutor, speaker, Web developer/app developer, graphic designer, social media consultant, marketing/public relations consultant, photographer/videographer, home organizer, yoga teacher, career coach, handyman.
Palmer suggests starting your own endeavor rather than paying someone else for a prepackaged business opportunity, such as multilevel marketing or work-from-home schemes: "I think the much better, safer and more lucrative route is to create your own business."
You'll want to avoid a side job that's an obvious conflict of interest with your full-time job or that violates company policy. But don't assume your employer will object.
"People tend to be a little too careful here," Palmer said. "It's so common to have a side business, and employers are increasingly encouraging it."
How do I find the time? There's no magic answer to that. Palmer, in more than 100 interviews with people with side gigs, found common themes, though. They included getting up especially early, often at 5 a.m., to work on a side business, spending less time watching television and reading Facebook, and using slivers of downtime, such as a commute, to be productive.
It's possible. Palmer manages her online store and writes books, despite holding a full-time job and raising two young children.
One caution is to avoid "daylighting" — using your full-time employer's time or equipment to work on your side job.
"You want to be so careful and go out of your way not to spend any of your company time, (or use its) resources, computers, phones on your side business," Palmer said. "Keep it all separate. You don't want to run the risk of even looking like you're doing something that's not proper."
How much should I spend? A key to developing a successful side job is to keep expenses low. Don't make the mistake of buying expensive office furniture or equipment in anticipation of starting a business.
Use free tools to build a website and market via social media. "The infrastructure is out there for you to use for virtually nothing," Palmer said. "Until you start earning money through your side business, you should try to spend no money or very little." Some of what you do spend can be tax write-offs against what the side business earns.
What's the best advice? Just do it. Don't succumb to paralysis by analysis and wait until you have every angle figured out.
Gregory Karp, the author of Living Rich by Spending Smart, writes for the Chicago Tribune. Readers may send him email at email@example.com.