Gig work is more popular than ever — according to Statista, there are 57.3 million freelancers in the U.S. As I write this, it’s been just about a year since I jumped into the gig economy on a full-time basis, as a freelance writer and editor.
Before quitting my W-2 job, I had ramped up my freelance work, and by the time I was ready to turn in my letter of resignation, I knew that I could make a living in the gig economy and I had built myself some runway for financial security. Here are a few tips you can use to do the same and thrive in 2024’s gig economy.
Prioritize your savings
You might not have the luxury of saving money before becoming a gig worker if you are currently out of work. But I highly recommend ensuring you have money saved if you intend to do what I did and say sayonara to your regular job.
Unfortunately, many Americans are on the razor’s edge when it comes to their savings accounts. The Ascent’s research team found that the median savings account balance was just $1,200 as of July 2023. Life is expensive, and low wages and the pressure of unplanned bills can make it difficult to save.
The great thing about becoming part of the gig economy is that you will no longer be limited to a set salary (or number of hours, if you had a full-time hourly job). This could make it easier to build up savings for emergencies, future goals, or investing — not to mention sleep better at night.
As a gig worker, you’ll no longer be beholden to an employer’s schedule or directives. But if you want to succeed at being your own boss, it’s important to make your own routines and determine a schedule that works for you. This will depend on the particular type of work you’re interested in. If you want to drive for a ride-hailing service like Lyft or Uber, you’ll want to figure out when and where the busiest times for rides are in your city, and prioritize being available to work then.
If your gig work is more self-directed like mine, you can design your own schedule based on your needs. Got young kids? You might want to arrange your work days so you’re free when they come home from school. Early riser? Personally, I do some of my day’s work before the sun even comes up.
Don’t forget to also plan for time off — remember, just because you can work all the time, doesn’t mean you should. Gig workers don’t get paid vacation time, but this doesn’t mean you can’t give yourself that gift. At the end of 2023, I created a small pool of “paid time off” for myself. I haven’t had to dip into that money yet, but it’s comforting to know that if I have a day where I can’t work, I can cover my shortfall from it.
Build new skills
The gig economy is dynamic and always changing. If you’re hoping to thrive, you have to be ready to grow and change with it. To that end, it’s worthwhile to add to your skillset as you progress. For example, if you’re a freelance graphic designer, stay up to date on the latest and greatest software programs, and consider adding copywriting to your skills, to become a more well-rounded marketing professional.
Artificial intelligence is increasingly becoming part of the working world, so if you’re in a field that will be particularly impacted by it (such as data analysis and entry, web development, and tax preparation, according to Pew Research), gear up now. Investigate the AI tools available to you and get familiar with them (or at least size up your competition and find ways you can stand out to an employer as a human worker).
Don’t neglect taxes
Finally, if you’re hoping to thrive in the gig economy, there is a major piece of business you need to attend to: taxes. If you used to be a W-2 employee, you probably didn’t think about taxes all that often before — perhaps just at the end of January, when you’d receive a W-2 in the mail, and then again when you file your tax return.
But gig workers are often small business owners, and taxes are a much bigger part of our world. You might need to pay quarterly estimated taxes four times a year (January, April, June, September) and if you neglect to do this, you can be penalized by the IRS.
The whole tax thing made me nervous when I started freelancing, so I sought out a tax professional to work with, but the best tax software for small businesses can also help you figure out what you owe. And don’t forget about deductions! As a gig worker, you’ll get to take deductions W-2 employees can’t, such as for your home office and any supplies you purchase, like a new computer if you’re a writer or graphic designer.
The gig economy has brought a revolution in the who, what, why, where, and when of Americans working. If you intend to jump into it yourself this year, I hope these tips help.
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