10 Expenses Every Gig Economy Worker Must Budget For
- Deepak Juneja, at Tech Webers
- 28.01.2023 03:00 pm undisclosed
Having the flexibility and freedom to choose your tasks and create your own schedule are just some of the gig economy benefits you get to enjoy.
However, you must also take more responsibility when it comes to managing your finances. There are specific expenses you should prepare for as a gig economy worker in addition to the usual expenses you pay at a given time.
Here are ten expenses that you and every other gig worker should budget for:
As a gig economy worker, you are considered self-employed, which means you take care of your own taxes. This covers federal and state taxes, as well as other applicable local taxes. Make sure you're allocating a part of your monthly income to cover these expenses.
If your job doesn't provide health insurance as one of its benefits, you'll need to obtain your own policy. This can be a significant expense, especially if you have any pre-existing medical conditions. Consider shopping around to get the best pricing and ensure you're getting the kind of plan that matches your needs.
Since gig economy workers don't have the benefit of employer-matched 401(k) plans, you also need to save up for your retirement. To help you do this, consider opening an individual retirement account (IRA) or a solo 401(k).
Depending on the type of your gig job, you may incur business expenses such as a website, marketing materials, or equipment. See to it that you set aside money in your budget to cover these expenses.
You'll need to invest in your professional development to stay competitive in the freelance economy. Taking training courses, certification programs, and workshops is highly recommended.
As a gig economy worker, you may need to hire an attorney for several reasons, such as contract review or legal conflict resolution. Remember to budget for these expenses as well.
Again, depending on your gig work, you may need to acquire different types of insurance as part of your overhead expenses, such as liability or equipment policies.
You'll also need to budget for gas, maintenance, and insurance, especially if you rely on your own vehicle to accomplish your gig work tasks.
Apart from self-employment taxes, you may also need to set aside part of your income to pay for sales and other applicable taxes.
As a gig economy worker, you're well aware that you don't have the stability of conventional employment. Since this is the case, it's critical to have a financial cushion in case of emergency expenses or a sudden lack of working opportunities. Make it a habit to set aside money each month to build your savings.
Budgeting Tips for Gig Workers
Gig work can be an excellent way to add to your income or even make a living, but it can also make budgeting a bit more difficult. To help you navigate the gig economy, here are a few budgeting tips you can consider:
This may seem obvious, but knowing exactly how much money is coming in and going out each month is important. Make a list of all your fixed expenses, such as rent or mortgage payments, and variable expenses, like food and entertainment. From there, you can determine how much money you have left over for savings or put towards paying off debt.
Keeping track of your expenses is an important element of budgeting for gig workers since it allows you to see where your money is going and where you may be able to cut back.
Make sure you’re keeping track of your expenses to ensure you're not overspending. It's easy to do that when you're not working a traditional job with a steady paycheck.
As a gig worker, you're responsible for paying your own taxes, so it's important to set aside a portion of your monthly earnings to cover this expense. Doing this helps ensure you have enough money to pay your taxes on time and avoid any penalties or additional fees.
As a gig worker, there are different methods to save money and cut costs. For example, you can negotiate more affordable rates with clients, look for the cheapest pricing on supplies and equipment, or identify ways to save on transportation costs.
Consider taking on a side hustle in addition to your main gig if you want to raise your income as a gig worker. This could range from freelance jobs to selling online products. When budgeting your time and resources, make sure to account for the extra time and effort required to pursue a side hustle.
Managing your finances as a gig economy worker can be challenging at times. However, by budgeting for these expenses, you can rest assured that you have the resources you need to thrive at work and achieve your financial objectives.
