What Gig Workers Need to Know about Personal Finance

If you are a house painter and sometimes Uber driver who does your friend’s tax returns for a small fee, you are part of what’s known as the gig economy.

Gig workers have always been around. Whether they’re called freelancers, contractors or something else, their personal finance situations have some commonalities. A gig worker often does not have a regular work schedule, relying instead on the ebb and flow of work opportunities. They also tend to make money doing more than one occupation.

While there is a lot of freedom in the gig economy, there are some particulars these busy bees should know about when it comes to managing their personal finances. Community Currency Exchanges throughout Illinois can also be a helpful source of services and information to fill in any gaps.

1. Keep Detailed Financial Records

TeamStage states that “more than 36% (57 million) of Americans have a gig work arrangement either as their primary or secondary job.” That’s a lot of people who will need to make an extra effort when it comes to organizing and maintaining their financial records.

You could be forgiven for wanting to toss all your work documents in a shoebox, but financial organization is a day-to-day process that will be much easier if you take it one step at a time – as opposed to doing it all at once before filing for taxes or a loan, or in anticipation of an audit. Anything related to work and finance may be necessary to review later on.

Whether they’re paper or digital, keep separate files of these types of documents:

• Work-Related Receipts
• Credit Card Statements
• Other Bank Statements
• Invoices
• Contracts

2. Spend Time Carefully Planning & Budgeting Your Finances

When someone doesn’t have a regular nine-to-five job, it’s even more important that they take some time to map out their financial plans and expenses. How much do you need to cover utilities, groceries, transportation and other monthly bills? How much money can you set aside for spending this month? Self-employed folks and others who don’t earn a regular income should start by creating a detailed monthly budget. You don’t need to be an accountant or math whiz. Just start with an estimate of how much money you usually earn each month or think you will earn this month.

3. Separately Document All Incoming and Outgoing Cash Related to Your Business

The more money you make and more sources of income you have, the more imperative it becomes to keep files that outline where money is coming from and going to – through spreadsheets, an app, or whatever method works best for you. Start doing this in the beginning, as it will make the process much easier than trying to untangle your finances a year or two from now.

Creating a hard line between business and personal finances could mean having separate credit cards or bank accounts for each area. Separating personal and business finances will also help you do a better jog budgeting in your personal life. You’ll know if you’re overspending on groceries, or if office supplies are the culprit. It will also make it easier if you need to curb your spending on personal entertainment or work-related transportation.

4. Set Aside Some Funds for Unexpected Expenses

Do you have funds for insurance or an unexpected medical expense? How about if you end up owing money at tax time? Consider creating a secondary, contingency budget to cover the occasional unexpected need that arises.

5. File Your Taxes Properly

One mistake a person can make is believing they don’t need to file taxes. While it may be tempting to fly under the radar for a while, the government has a way of catching up with folks who either fail to file or owe money. The rules can change year to year, so make sure you’re up to date in that regard. For example, people who made a certain amount in 2023 will need to file in 2024. According to the Consumer Financial Protection Bureau, that amounts to “$13,850 for single filers and $27,700 for those married filing jointly.”

6. Let Currency Exchanges in Illinois & Midwest Help You Keep Your Finances on Track

Finally, be patient with yourself if the above suggestions don’t happen overnight. Organizing, budgeting and managing one’s finances take a little time, especially for anyone new to their career in the gig economy.

In the meantime, let Currency Exchanges throughout Illinois and other areas of the Midwest help you keep your finances on track. We provide several services that do that for small business owners and regular folks – from check cashing and electronic bill payment to safe money transfers and a whole range of auto services.

Contact Community Currency Exchange (CCEA) to find out more, and stop by your nearest location in person to get started on a more financially stable and organized career!