With over 140 million people in the U.S. having received at least one dose of the COVID-19 vaccine and the job market slowly rebounding, there are glimmers of hope amid the ongoing public health and economic crisis. Still, the pandemic has had (and continues to have) an unprecedented impact on many lives. Unemployment, reduced wages, and business closures have reshaped people’s financial priorities and spending habits.
As many Americans reassess their financial lives, The Balance asked several personal finance experts and influencers to share their own experiences from the past year and how they’ve informed their perspectives on budgeting, investing, and achieving financial independence. Today, we speak with Kevin Ha, aka the Financial Panther.
When the pandemic began its surge in the U.S. in March 2020, Kevin Ha quickly learned the value of a financial “safety net.” Not long after he and his wife became first-time parents that same month, Ha’s monetized personal finance writing and blogging business took a hit, as did his wife’s own entrepreneurial endeavor. Luckily, the couple was able to rely on a “pretty large emergency fund,” while Ha himself capitalized on the spike in gig work like food delivery to create income streams through side hustles.
For Ha, though, side hustling has always been driven more by genuine interest in a gig than the money made from it. After all, the Minneapolis-based millennial, who goes by the moniker of “Financial Panther,” made his name by ditching his six-figure law career, taking on 13 side hustles from dog-walking to deliveries at one point, and paying off $87,000 in student loans in just two-and-a-half years.
The Balance recently spoke with Ha about creating a safety net and the value of side hustles, as well as the challenges and keys to gig-work success.
This interview has been edited for lengthy and clarity.
How should “safety nets” like emergency funds and savings be managed?
I am big on separating my funds from my savings. It's really easy to do these days with the way that banks are now, where you can make different sub-savings accounts. And if you are saving, you should save for a specific thing. So for an emergency fund, you should have an account that's labeled "Emergency Fund" and you'll know that's what you have it there for.
With savings for example, I know every two years or so, I'm going to buy a new phone. Whenever I buy a new phone, I start saving for the next one. And I know how much that phone will probably cost. And so you just divide the cost up, and you can start saving, say, $1,000 over two years, which really doesn't seem like that much.
That's how I think about it. I divide up my savings into different buckets labeled for the things that I'm trying to save for. My wife and I are also looking to buy a house, so we've got money set aside for a down payment. That's just what it's set for.
Having had 13 side hustles at one point, what are your keys to success in this arena?
Side-hustling these days is easier than it's ever been. Even 10 years ago, you just couldn't earn extra money the way you can nowadays. Take these food delivery side hustles that I do, which are my favorites because I like delivering food on my bike. In the old days, you couldn't be like, "I'm going to go work for 10 minutes and make $7." Nowadays though, that is a possibility, especially if you're like a lot of millennials where you live in dense neighborhoods where people are ordering tons of food and you can just walk out the door.
There's a lot of opportunity there, and there's an opportunity cost when you don't take advantage of these things. What I mean is, if you just go and make an extra $5 every day, in a year, that's well over $1,000 at the end. And because that's from a side hustle ideally, it's bonus money.
Most people can literally make $5 in 10 minutes, so saving and investing $5 a day for 30 years isn’t crazy. Calculate what you could make at the end of that period, and consider the total if you doubled your side-hustle savings to $10 a day. Then, ask yourself what would you need to save or invest to become a millionaire in 30 years? For instance, I'm an index investor. I keep my costs low, but I'm just buying every stock to build a diversified index fund that I hope grows long-term.
So, in terms of what you can do in this world of side-hustling, you can earn extra money in these small piecemeal chunks. If you just take that extra money and save it away, over time, it adds up to a lot. It's just an interesting thing to think about, like, "Oh, you could be a millionaire in 30 years literally from going on your bike and delivering food." It sounds ridiculous, but it is possible.
So if you're not pocketing it, you're just setting it aside in the side-hustle account.
That's exactly what I did when I had my regular full-time day job. When I just had my paycheck and then I had my side hustle, they would all go in this separate checking account, and I never touched that money. At the end of the year, I would pay the taxes, and then I would have all this money that I would just be able to invest, and I didn't even notice it. A few bucks a day really does add up. Give yourself time, give yourself consistency, and it really can add up without you really even noticing it.
How do millennials get their finances in order now?
If you weren't ready for [the downturn] this time, you want to be ready for it next time. So picking up side hustles, saving up your emergency fund, these are things that you can start doing now. Hopefully things are looking better, and things get a little more stable, so this is the time now for you to start doing this.
When the pandemic happened, my writing took a dip because advertisers stopped advertising, and affiliates stopped paying out and so as a result, my income went down. But at the same time, I also had all these side hustles that I'd been doing. So what happened during the pandemic? Food delivery skyrocketed, so that was able to replace it. So you can see the value of that diversified stream, where one thing goes down, something else can go up.
I had a side-hustle emergency fund where you're prepared already, and you can start up a side hustle and not necessarily do it all the time. You can just have it ready to go, especially with these gig apps on your phone.
Some of the apps are really quick to get started on, while others might put you on a waiting list. In general, I find that you can usually get up and running on most of these apps within a couple of days. And it's nice because it doesn't cost you anything. It just takes you a little bit of time to fill out the forms and do all that on your phone, which you can do while you're watching TV. And then once you're on it, you've got it on your phone forever. It's a lot easier now than it was back when I signed up for these apps in 2015 and 2016, when they actually used to make you go into an office for orientation.
What are the major challenges of subsisting on side hustles, and what should people be aware of?
The challenge where you're working for yourself or trying to make things happen on your own is that incomes are going to be inconsistent. That's why it's really important to have lots of different income sources and backup funds, because you never know, one month can be really good and one month can be really bad and you're not going to get the steadiness that you get with a regular paycheck.
In the gig economy, you just need to have bigger savings than most. If you're a teacher, or a nurse, your job's probably going to be stable and you’re going to make pretty consistent income. But if you're a freelancer or gig worker, your income is going to be all over the place, and you never know when it will be gone. So if a “normal” person has three months’ savings, you have to have six months, just to give yourself that cushion in case things get tough.
I write and I blog, and that's where my primary income source is. I could live off of that if I wanted to. But the gig stuff, even when I was working as a lawyer, I was still doing it because, yes, I like the extra income that it brings, but I do it more because I like doing it.
Do you worry about stretching yourself too thin?
Side hustles are almost therapeutic for me, especially if you have a stressful job you can never really get away from. It’s nice to be able to do something that's very task-based. You know what you need to do, you control it, and you don't have to think too much about it when doing it. If I'm stressed out doing something else, I can do this for 30 minutes, an hour, and it's like exercise for me. That's the thing that people don't think about with side hustles. We all have hobbies, we all have things we do, but these can be hobbies that just happen to make money as well.