Of the nearly 60 million freelancers working in the US today, 84% of them say that this type of work lets them live the lifestyle they want. If you’re attracted to the freedom and flexibility that working as a gig worker allows you to enjoy then you’ll wanna be sure to pay close attention to this article. How can you not only work in the economy but thrive in the gig economy?
Working for yourself, taking on gigs you’re passionate about, and starting your own side hustle are all major pros of being a gig worker. However, all of that means that you’re now responsible for paying your own salary, taking out your own taxes, and investing in your own retirement account. Ain’t no big business gonna do that for you now. It’s all on you.
And, yeah, that’s exciting. But, it can also be scary. So, whether you’re just starting out as a freelancer or have been paying your bills with gigs for years, here are a few tips from us on how you can learn to thrive in the gig economy.
Already have your freelance finances under control and want to learn how to make your savings grow exponentially? Download the Wealth Stack app to start investing.
What is a Gig Worker?
A gig worker is someone who works short, often “defined” jobs as a freelancer. Tax-wise, it just means that you’re a self-employed individual and have to pay taxes as one. Professionally, it just means that you aren’t employed by any one company. Instead, you offer your services to those companies, venues, or individuals on a case-by-case (or gig-by-gig) basis.
As a gig worker, though, it’s important to understand that you can technically work as many jobs as you like, even part-time salaried jobs. The only thing you’ll need to keep in mind is that, if you are working as a gig worker on some freelance jobs, you’ll be in charge of paying your own taxes on whatever you earn. If you’re working as a salaried or hourly employee and have signed a contract with a company that states you’ll be a full employee then they’ll take care of that for you.
Taxes aside, being a gig worker in today’s economy is pretty dang profitable. With websites like Fiverr and Upwork and companies like Airbnb and Uber becoming even more popular as the pandemic rages on, it’s easier than ever to get started as a gig worker. Thriving in the gig economy is another thing…
Not sure what kind of gig or freelance work is right for you? Check out our guide to the Best Freelance Jobs for Millennials in 2022.
What is the Gig Economy?
Okay, so what exactly is this “gig economy” we keep talking about? As you might be able to guess, it’s a portion of the global economy that’s driven by short-term jobs as opposed to permanent jobs. In fact, Dictionary.com defines it as an:
"...economic sector consisting of part-time, temporary, and freelance jobs.”
The term “gig” originates from the music industry. Singers and other performers work “gigs,” which are short-term jobs. The name’s stuck and now millions of people all over the country (and across the world) are thriving, hustling, and earning as gig workers.
Are there benefits to the gig economy? Absolutely! Some of the benefits of the gig economy include more access to otherwise inaccessible jobs (particularly on a global scale), cheaper rates for clients due to a lack of overhead costs that large corporations have to cover, and the ability for small businesses to receive high-quality help by outsourcing to gig workers and non-salaried freelancers.
If you’re not sold on just how important the gig economy is and will continue to be then just check out this stat. Mastercard performed a study in 2019 that predicted that the gig economy will have a gross volume of $455 billion in 2023.
Need help managing your finances as a gig worker? Take a look at our article on Financial Tools for Gig Workers & Freelancers.
Pros & Cons of Being a Gig Worker
The biggest benefit of being a gig worker is the ability to decide when, where, and for how much you will work. This means that you can scale your prices as your expertise and experience grows; that wouldn’t happen (at least not quickly) in a regular salaried job.
Other benefits of being a gig worker include:
- Location independence
- Creative flexibility (choose to work on graphic design one day and voiceovers the next!)
Oftentimes, people start out as gig workers in order to gain experience or build a portfolio. This is also a great idea if you want to scale your service offerings and build up a portfolio before applying for a full-time job at your dream company, for example. It’s also a great idea if you’re looking to slowly build your own business. Start out small as a solo freelancer, build up experience through gig work, and then expand!
Now, what about the cons? Really, the biggest drawback of being a gig worker is having to pay your own taxes. We’ve got a helpful guide about that here. Really, though, the most important thing to know is that you should be keeping track of how much you earn and spend while doing freelance work.
Make sure that you’re putting aside at least 25% of each month’s earnings to pay your taxes. Then, be sure that you’re tracking your expenses so that you can accurately provide the IRS with a list of deductions come tax time! It’s worth speaking with a tax expert the first year you file taxes as a gig worker, honestly, just to be sure you’re tracking the right expenses and setting aside enough to pay for what you’ll owe.
As a gig worker, you’ll be in charge of investing in your own retirement account. Familiarize yourself with your options by reading through the 3 Types of Investment Accounts to Open in Your 30s.
How to Thrive as a Gig Worker
Now that you’re aware of the pros and cons and still wanna work as a gig worker, here’s how to thrive in the gig economy.
- Set your rate according to not only your expertise, experience, and industry standards, but also by calculating the amount you’ll lose after paying taxes and after paying for any and all tools you need to complete the project.
- Get and stay organized. Use productivity tools to ensure that you’re on top of all of your project deadlines, payments, and more. Using an app to track expenses and/or receipts is going to be super helpful!
- Work to build a circle of close contacts within your industry. Word of mouth is super critical in the gig economy. Make sure you’re offering great service and, in general, just being a good person. People want to work with others who are good, personable people they like.
- Look for ways you can scale your services or increase your expertise. As a gig worker, it’s on you to invest in yourself. There won’t be any on-site training or paid workshops as part of a career development perk. You have to look for those yourself. So, make it a point to always be on the lookout for free courses you can take, workshops you can attend, or certificates you can acquire that’ll help you be more marketable as a gig worker.
Speaking of investing in yourself...it really is important to...
Invest in Yourself
Isn’t it about time you started thinking about your future as a gig worker? Nah, we’re not talking about the next few months or so. We’re talking about the next 10, 20, or even 30 years. Not sure where to even start planning that far ahead? We’ve got you.
Wealth Stack is the first finance platform built specifically for Generation Hustle, for the non-traditional workers who want to invest in themselves while they side giggin’ and freelancing their way through life. After all, you’re non-traditional, so why should your financial and investment options be?
The Wealth Stack app is a place where you can learn from free, engaging videos that’ll teach you everything you need to know about managing your finances. Then, once you’ve got that under control, you can learn how to invest. Our investment pros are working hard for you so that you can invest in stocks that will only help you grow your hard-earned wealth.
Take control of your financial future. Download the Wealth Stack app today, the financial tool for freelancers looking to build something truly big.