Since the job market has yet to fully recover from the economic downturn of 2008, many people have turned to working from home either out of design or simple necessity.
Full-time jobs are incredibly hard to come by these days, and even low-paying opportunities are flooded with applicants. Since many experienced job-seekers are settling for anything they can get, that means other hard working Americans are being pushed to the side. To compensate for that crush, people have begun working from home.
But, starting a home-based business is no easier than it ever was, and most people find they have to pick up side work in order to make ends meet. Is this actually a viable strategy?
Regrettably, many times it is not.
Here are a few reasons why you should reconsider your strategy and look for side work when working from home won’t always pay the bills.
Finding Side Work when Working From Home Just Doesn’t Cut It
First off, working from home means you have to generate every opportunity, and you must do so without a team to lean on. That means that even simple side jobs, such as babysitting or writing blog articles, will require you locate the opportunities and apply for them individually. You may find that this is as rigorous as if you were applying for a full-time position.
People looking for babysitters have plenty of options, but freelance bloggers are up against thousands of out-of-work English and Journalism graduates. It can take several months to locate the opportunities, receive the work and develop a timely payment system, and during all of this time, your monthly expenses won’t simply wait for you to catch up.
If you don’t have an emergency fund to draw from, you could find yourself running out of time. This is a sad reality for many.
Juggling a number of side jobs also means inconsistent pay and a more complicated financial picture. People with one steady job find their finances incredibly easy to navigate. They can set their monthly budget based on the paychecks they receive, and therefore chart the best time to pay their bills.
Side work is not always consistent, which means you may make significantly more or less one week than the following week. It’s tough to plot out monthly expenses with this sort of schedule. Additionally, you’ve got to deal with all the infrastructure you’ll need in place to handle your tax situation.
Depending on the work, you may need to set up one or several corporations or LLCs, all of which take start-up costs, and you may even need separate bank accounts and a tight ledger come tax time. You could find you spend as much as a quarter of your time managing it all, which is 25% less time you have to actually get the work done.
Finally, you could develop enough work to cover your bills, but it might take an unsustainably heavy workload to do it. Many people who work two to four jobs to pay the bills can find themselves working as much as 80 hours each week. This is a comparable schedule to a lawyer or a stock broker, but for a bare fraction of the take home pay.
Additionally, you don’t get paid vacation or sick days, and the work doesn’t get done if you’re not there. That means no downtime, and no flexibility if issues come up in your life that you need to handle. A wedding magician, for example, only gets paid when he shows up, and if his children are sick or his wife goes into labor, he either skips out on his family priorities or loses the day’s pay. That could throw the whole month off if you don’t have much of a margin.
Burnout could come quickly under these situations, and all that work may still not leave you prepared to pay your bills. Think long and hard about the lifestyle you can sustain before you get in over your head.