When you are on a limited income and are facing student loan debt, earning more money can be life changing.
That’s why side hustles are becoming increasingly popular. You can make more cash on the side and on your own schedule.
Plus, bringing in more money allows you to pay down debt and boost your savings more quickly.
And, you can launch many side gigs within a few hours. You can look for clients, land a customer, and collect your first payment all in one day.
But while side gigs can be gold mines, many people rush in without doing their homework. Or, paying for some essential insurance. And that can cost you.
Below, we’ll talk about some of the hidden costs around driving for ridesharing apps, dog-sitting, and cleaning houses. These are three common side gigs many people engage in.
Driving for Uber or Lyft
“Uber and Lyft offer full commercial insurance while drivers are en route to a passenger or on a trip, but when drivers just have the app on or are waiting for a request, there’s an insurance gap,” says Campbell.
That issue means that if you are in an accident while waiting for a customer, Uber or Lyft won’t help you. And even if you have personal car insurance, you may be out of luck.
“Personal insurers won’t cover drivers during the rideshare waiting period, and they may even drop you for being a rideshare driver,” says Campbell.
“But a lot of companies are now offering rideshare insurance and the cost is only five to 20 percent more per month and you get full coverage,” Campbell adds.
The Rideshare Guy compiled insurance companies that offer policies to rideshare drivers that cover the waiting periods when you don’t have a passenger.
Getting a policy can give you the necessary protection you need to keep yourself safe and protect your finances in the event of an accident.
There are thousands of sitters willing to watch pets in their homes or their customers’ houses. And it seems like a great gig: you get to play with animals without any startup costs.
But according to professional Jeremy Beam, jumping into pet sitting without doing some legwork to set up your business can destroy your finances.
“So many pet sitters treat it very casually and don’t bother to get bonded or insured,” says Beam. “They think it isn’t necessary because they only watch pets occasionally, or they don’t want to spend the money.”
“But going without insurance can literally bankrupt you,” Beam explains.
He’s met other pet sitters who have found out the hard way. One dog sitter was walking a dog when the pup broke free of its leash and ran out into the road and a car hit it. The sitter was liable for the dog’s medical fees, which totaled over $15,000.
In another case, a sitter was watching a dog in the customer’s home. The owner gave strict instructions that the dog had to be in a crate when no one was home.
But the sitter forgot to secure the crate once, and the dog destroyed an oriental rug worth over $45,000. The sitter had to set up a repayment plan with the owners.
While those cases may sound extreme, accidents happen. An insurance policy can protect you from the unexpected. It can also make customers feel more comfortable about hiring you.
Beam recommends getting a comprehensive policy that will cover veterinarian visits, property damage, and even provide coverage for lost keys.
Most policies cost between $200-500 a year, depending on what services you offer. PetSits.com is a site that compares different pet insurance policies to help you choose the best option for your needs.
Similar to pet sitting, cleaning houses can be an easy side gig to jump into quickly. But just like watching a dog or cat in someone’s home, there’s a lot of risks involved.
When you’re cleaning, mistakes happen. You can knock over a treasured vase, use a cleanser that damages the finish on a piece of furniture or spill something on a customer’s white couch.
And in some cases, these little accidents can cost hundreds or even thousands of dollars to repair.
Additionally, since you have access to someone’s home, you also have some liability issues to consider. If you forget to lock the door after you clean or lose the homeowner’s key, and a robber enters their home, they could hold you responsible.
Insurance can help protect you against the costs of accidents and lawsuits. But it is not cheap. Even if you only clean a few houses, annual premiums can be over $600 a year.
Side gigs: prepare for the worst, hope for the best
Side hustles are a great way to earn money and pay down your student loans or credit cards. But remember, you need to do some preparation before you start taking on gigs.
While you might cringe at spending a few hundred dollars on an insurance policy when you’re just getting started, it’s a wise investment that can protect you.
For more information on how to better manage your side hustle, check out this article here.
Wondering how much money you could save paying off your student loans early? Check out this calculator below to see how making extra money from side gigs can help you pay down your student loan debt.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|
Are you juggling multiple side gigs? Share how you manage it all in the comments below!