TROY, Mich.—Even as the share of financially unhealthy Americans holds steady, many households are hustling harder than ever to keep their balance sheets afloat, J.D. Power reports, emphasizing FIs can step in and play an important role.
One in three consumers (33%) now say they’ve taken on a second job or side hustle to make ends meet. And with two-thirds (68%) believing the cost of living is outpacing their income, long hours and extra gigs are becoming less of a choice and more of a necessity amid an uncertain economic outlook.
Financial Health Steadies
Overall consumer financial health levels were stable in August. The share of consumers who are either vulnerable, overextended or stressed, remained steady at 64%, unchanged from July.
The percentage of consumers who say the price of goods is rising faster than their income declined in August to 68%, down from 71% in July. Vulnerable (79%), overextended (56%) and stressed (81%) consumers all saw at least a 3 percentage-point decrease.
“That’s noteworthy because consumer prices are still rising, but at least for this month, consumers aren’t feeling as sharp of a sting,” J.D. Power said.
Side Hustles Are Here To Stay
One-third (33%) of consumers report working a second job or maintaining a side hustle. The rate is highest among consumers under age 40 (45%) and those who are financially overextended (43%).
Earning extra income is the most common reason given (78%) for working an extra job or a side hustle, followed by paying off debt (29%), and saving toward a goal (28%).
More than half of respondents (53%) are working longer hours today than they were six months ago, and 17% of those are required to work longer by their employers. Financially overextended customers are the most likely to be working longer because of work demands, while those classified as financially vulnerable are putting in the additional hours to make ends meet.
What Role Should FIs Play In This Evolution?
“As economic headwinds continue to swirl, it stands to reason that side hustles will become even more prevalent. Interestingly, more than half (54%) of consumers have gone through some form of major life experience in the last 12 months. These events range from moving to medical issues to divorce. And with many consumers lacking emergency savings funds, a second job or side hustle could soon become a necessity,” J.D. Power said.
This is where Fis can step in and play an important role, J.D. Power said.
“With consumers looking to make extra money to pay down debt or achieve a financial goal, banks can be valuable partners in prioritizing these goals and coming up with a plan on how to achieve them. With so many Americans working longer hours, there is likely a tipping point toward burnout, and if banks can help their customers put their second job or side hustle money to good use, it could help customers make the most of the money they have coming in,” J.D. Power said.