Budgeting is the first step to having a better relationship with money and prepares you for whatever comes your way. As your own boss, it’s important to understand how to finance YOU. Gig work offers lots of freedom as you can choose the hours and projects you work, but it’s also important to be prepared financially when there isn’t work available. Here are some of our best budgeting tips for gig workers to better manage your money.
As a gig worker, costs like transportation, food, and maintenance add up quickly and it can be overwhelming if you don’t have a good system in place to organize your finances. Excel spreadsheets, bullet journals, or even plain lists are all great systems; choose one that works for you and that you can stick with comfortably. In our digital age, there are also plenty of resources online that can help you save money, like banking apps and free budget templates that offer a great automated visual of your spending habits.
Compared to a traditional 9-5 job, gig work has much more variation in income each month so it’s important to set a budget that’s adaptable to the projects you take on. Start with a small budget – during months with a more steady income, try and keep your expenses low. You never know when you will need to be prepared for periods of time where work may not be available and your income may be inconsistent.
Lots of people toss their receipts first thing when they get home which can make tracking your spending quite messy. Keep all receipts until the end of the month and go through them all so you have a good idea of where you may have over or underspent, and how to reallocate your budget for the following month. The great thing about reevaluating your budget each month is that you can adjust your money allocation to an amount that is realistic for you.
If you have receipts related to your work, such as gas expenses or car repairs, make sure you set these aside for tax season! You can deduct your expenses from what you owe in taxes if you can prove they were related to work.
It’s never too late to save money and properly manage your finances. Being financially responsible is important not only for you now, but allows you to have greater opportunities to build your wealth in the long term. With gig work, you need to find a balance between the projects you take on and your budget month to month. Your income varies every month, so it’s important to have a savings plan in place.
Try to keep an emergency fund of at least 3 months of living expenses. You never know when you might need cash on hand to cover an emergency, or if you might make less this month. To prepare for this, we recommend putting aside 10% of your earnings into a savings fund.
As an independent worker, you are also responsible for filing your own taxes and it’s important to set aside at least 20% of your income for tax purposes. Keeping a good record of your expenses through keeping receipts or in a spreadsheet will make this savings process much easier.
Your mentality matters a lot when it comes to budgeting. Purchasing a car, making a down payment on a house, and buying a TV are a few examples of large life purchases that require a lot of savings, and keeping these end goals in mind when you make purchasing decisions can help with budgeting. Resist the urge to order take-out and opt for a home cooked meal. If you can, take public transportation to save on gas and car maintenance costs.
Being financially responsible doesn’t mean you need to live frugally and change your lifestyle in a complete 180. It’s balancing your lifestyle to reach the end goal of financial independence.
Understanding how to manage your money can lead to long-term benefits, and is a necessary stepping stone to financial freedom. It might take some time getting used to a system and tracking your spending but if you start now, it’ll turn into a healthy habit.
If you found this helpful, share this article with your friends! Moves is always posting new resources for independent workers, so keep checking in for more resources to help you and your business grow.
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