As a gig worker, it’s really important for you to plan out your finances to maximize your income and build savings.
One of the great things about being a gig worker is that you get to work on your own schedule and create your own destiny.
But one of the downsides to it is that you don’t have the support or resources of a company at your back.
You have to make sure to plan accordingly for yourself if you want to succeed financially and avoid running into hardship or trouble as a result of that lack of support.
For example, gig workers can face ups and downs in work demand.
Some months they’ll earn more—and in other months, they’ll earn less.
The inconsistency of the income can be a double-edged sword.
So in this blog post, you’re going to learn five of our favorite tips for how to actually financially plan as a gig worker to maximize your income and build your wealth and succeed.
Let’s jump into it.
- Look For Side Hustles
This may sound like a redundant tip, but it’s actually really important.
Just because you’re a gig worker doesn’t mean that you have to focus only on one gig.
In fact, diversifying your income portfolio is a crucial part of maintaining stability, especially in off seasons when your main gig isn’t bringing in quite as much cash.
One cool thing about some of these newer delivery app gigs, for example, is that you can do them with just a bicycle.
This list of bike delivery apps, for example, can make you quite a bit of money on the side while helping you to bolster yourself against inconsistencies in income.
And this leads us to our second tip…
- Set Aside Money During The Busy Seasons
It’s crucial as a gig worker to set aside more than a typical amount of money into savings during busy seasons, so that you have that money as a cushion in the drought seasons.
This is one aspect of gig work that a lot of self-employed freelancers struggle with. Unfortunately, the market is going to wax and wane, and your income is likely going to be inconsistent.
So when times are good, you really have to save more than is typical so that when times aren’t as good, you’ll have enough to live on until times change again.
- Spend Time Every Day Sourcing New Work
One of the cardinal sins of gig working is to get settled into a gig and become so reliant on it that you fail to source new, potentially better work for yourself.
But this is a rookie mistake that can cost you a lot in the long run.
It is always a better idea to continue to source new work and to set aside time for this task every single day.
Even if you’re already busy with awesome gigs, keep sourcing new work.
And be willing to replace former jobs with jobs that will pay better in the future.
- Learn New Skills To Increase Your Income
As a gig worker, you are basically relying on your skills to earn you an income.
The more specialized your skills are, the more you’re going to make.
Thus, it always pays to learn new skills and get better specialized so that you can niche down and perform even more valuable work for your clients.
The more valuable your skill, the more valuable your services will be worth to your clients.
- Make Sure To Set Aside Your Tax Money
Another big mistake that some gig workers make is that they fail to set aside the appropriate money for taxes.
When you’re first getting started as a freelancer, it can be easy to overlook the ‘tax’ part of things because when you’re an employee, your employer generally takes out your taxes for you. If you are paid as a gig worker, and your employer doesn’t take taxes out, you fill out the IRS form W9 each time you start working with a new employer.
But as a gig worker, you need to set aside your own taxes so that when you file at the end of the year, you’ll actually be able to pay them and not owe the IRS a bunch of money. And if you are a gig worker in the UK, then you have to pay the side hustle tax as part of your tax obligations.
As a general rule, if you set aside about 35% of your income, this should usually cover the majority of your taxes if you run your business as a sole proprietor.
There you have it!
Our top five tips for how to build wealth and plan for financial success as a gig worker.
The great news is that there’s plenty of work to be had as a gig worker.
The bad news is that it is a lot of work.
And you’re going to need to stick to it in order to keep that work flowing in.
But with a little determination, you can unlock the keys to not only financial success, but also a schedule that you get to create on your own terms.