Why Side Hustles Are Quietly Making Millennials Poorer — The Hidden Math Nobody Is Talking About
What looks like extra income may actually be draining wallets.
PeopleImages | Canva Everyone says side hustles are the answer. Scroll through the popular social media like TikTok, and you’ll see it:
- Monetize your downtime.
- Drive Uber before work.
- Flip furniture at lunch.
- Drop-ship dog sweaters at midnight.
Sounds easy, right?
Here’s the truth nobody on TikTok tells you: The median side hustler makes about $250 monthly before taxes and fees.
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That’s two tanks of gas. That’s it. And the kicker? The IRS wants a piece of it. Anything over $400 net triggers the 15.3% self-employment tax, plus quarterly-estimate headaches you didn’t plan for. Add platform fees and state income tax, and that $250 suddenly looks like $150 — or less.
Millennials work more side hours than any other generation (Gen-Z). Bankrate 2024 survey says their average side income is $1,129 a month. But here’s the catch:
- 36% say it only pays bills or debt.
- Emergency funds keep getting raided.
- Extra income leaks out as fast as it comes in.
Why? Because irregular income feels like play money. Psychologists call it “money illusion.” When cash arrives unpredictably, we spend it faster.
The platform fee sinkhole
Think you’re making money? Let’s check the math.
- Ride-share drivers lose money on fuel, depreciation, insurance, and unpaid wait time.
- Delivery gigs bleed you dry with listing charges, payment processor cuts, and “boost” fees.
- Sometimes you’re literally paying the platform to let you work.
Freelancing in reverse.
The burnout bill
Money isn’t the only thing draining. In March 2025, Business Insider profiled workers hospitalized from overwork. Migraines. Insomnia. Anxiety. And even if you’re not in the ER, burnout is real:
- Lost sleep.
- Missed workouts.
- Fast food dinners because you’re too tired to cook.
That’s money out of your pocket, too. You just don’t log it.
The Federal Reserve’s reality check
If hustling truly built wealth, gig workers would be better off, right? But the Fed’s survey found 38% of gig workers still can’t cover a $400 surprise expense. Extra income evaporates. Volatility cancels velocity.
My own ledger of regret: My old brother tried Uber to crush student debt. Looked smart at first.
But after gas, maintenance, and taxes, He was barely making $14 an hour. One fender bender wiped out three months of profit.
By year’s end, his loans barely moved. His car’s shocks? Shot.
Multiply His story by millions and you see why side hustles don’t add up.
The hidden math everybody skips
Here’s the simple formula nobody talks about: Gross vs. Net. Take your last payout. Subtract fees, mileage, supplies, and 15.3% tax. Still worth it?
- Opportunity Cost. Every hour delivering groceries is an hour not spent learning a skill that could earn you $40/hour.
- Volatility Premium. Irregular pay should come with extra compensation. Most gigs don’t give it.
- Burnout Bill. Count the skipped workouts, take-out meals, and sick days. They belong on the ledger, too.
When you actually track it, many hustles fall below minimum wage.
Not every side hustle is bad. If your Etsy shop sparks joy and sales — amazing. But if your goal is financial lift, here’s the smarter play:
- Run a real P&L. Separate accounts. Log every expense. Save 30% for taxes.
- Price your time at its future value. Sometimes a certificate course beats another gig shift.
- Push for platform fairness. Minimum pay, transparent fees, and mileage reimbursement.
- Seek benefits, not just dollars. One W-2 job with health insurance can beat two hustles.
Side hustles promised millennials freedom. Too often, they deliver fatigue, paperwork, and a bank balance stuck in neutral.
Maybe 2025 isn’t about hustling harder. Maybe it’s about pausing and auditing. Because the smartest hustle isn’t renting every spare minute to someone else’s app. It’s making your primary income — and your health — work a little better.
Gen. A. Ishimwe is a writer, online product manager, and junior contributor at YourTango. His work has been featured on Medium, with more publications to come.
