Regardless of whether you have a full-time job or not, there are good reasons to have multiple income sources. Another source of income can provide the peace of mind you deserve. Your job status can change with very little notice, and economic hardships that occur in the aftermath of a job loss can increase your stress level and impact your mental health. However, if you plan ahead and have multiple income sources, you can handle economic changes with ease. Here are seven reasons why you need a second income source.
1. Pay Costly Healthcare Expenses
Whether you're self-employed or an employee, higher healthcare costs can wreak havoc on your personal finances. If unable to afford some of these costs, you might consider going without health insurance or skipping appointments. With multiple income sources, you can generate extra cash to afford health insurance and cover other health related costs.
2. Your Hours at Work Were Reduced
Low revenue and sales might prompt your employer to lay off staff or cut your full-time hours. This is never good news, but with a second income source, you can survive these unpleasant changes. Fewer hours at work not only result in less work, it also results in a smaller paycheck.
3. You Need to Pay off Debt
Credit card debt hanging over your head is like a black cloud that never disappears. If you're living paycheck to paycheck, getting out of debt may seem like a far off dream. However, with multiple income sources, you can earn cash to slowly pay off your credit cards and other debts.
4. You Need to save Money for the Future
Whether you're planning to buy a new house in the future or you're preparing for your retirement, saving money should be a priority. But if you don't have a lot of disposable income, saving money might not be feasible. Rather than push savings aside, think of ways to create an additional income source. This might include a part-time job in the evenings, or maybe you can turn a hobby into a business.
5. You Fear Losing Your Job
If layoff rumors are circulating around your office, now’s the time to think about creating a second income stream. No matter how well you complete your job, no one is safe from a job loss. Rather than view yourself as invincible, start brainstorming ways to bring in extra cash to soften the blow.
6. You Need to Deal with Higher Living Costs
You might have a frugal mindset, but the higher cost-of-living can hit your pocket hard. As a result, you’ll pay more at the grocery store, the gas pump and everywhere else. With multiple sources of income, you can afford the things you need without going broke.
7. You Want Options in Life
You're probably thankful for the simple fact that you’re able to pay your bills each month. But if bills take all your money, a second income stream can open the door to fun, exciting opportunities. Extra money can pay for a vacation or update your wardrobe. There is nothing wrong with having a little fun with your money. You work hard — therefore, you deserve it.
If you’re looking for a second income source, try your hand at something exciting. For example, someone who enjoys baking might start a business baking cupcakes or gourmet cakes for parties. Likewise, someone with an eye for design could possibly start a business staging homes for sale.
What steps have you taken to create an additional income source?