The COVID-19 pandemic and its effect on the US economy have forced many businesses to downsize or close their doors permanently, leaving millions unemployed. The uncertain economic outlook has led many people to reconsider their career options and look for alternatives that offer more flexibility and security.
Freelance (or gig) knowledge work is one option that has become increasingly popular across generations. Freelance knowledge work provides the opportunity to work from anywhere, set your own hours, and choose the projects you want to work on, among other significant benefits.
Given current inflation rates in the United States, the rising cost of living, and the current job market, gig knowledge work is an attractive option for many people. In this article, you’ll find some of the most compelling reasons why you should consider engaging in freelance or gig work in 2022, especially when it comes to your financial wellbeing.
Managing Your Finances as a Knowledge Freelancer – How the Gig Economy Can Work for You
Despite the challenges, there are many benefits to gig work that can be advantageous from a financial standpoint. Personal finance management is important for everyone, but it can be especially challenging for freelancers.
The first step to take is understanding your income. When you are employed by a company, your salary is typically fixed. As a knowledge freelancer, your income can vary month to month or even week to week. This can make it difficult to budget and save for the future.
It’s important to keep track of your earnings and expenditures to have a clear picture of your financial situation. This will help you make informed decisions about where to allocate your resources.
Despite the added complexity, there are several methods of managing your finances as a freelancer that can help you stay on top of your financial obligations and plan for the future. Here is how and why freelance & gig work can be an important step to solidifying your personal financial success in the future.
1. You can use gig work to supplement your income and build up your savings
The potential to earn supplemental income for just a few hours per week of work can be very appealing, especially if you struggle to make ends meet. In addition, the flexibility of gig work means that you can choose when and how much you want to work, allowing you to better manage your time.
If you have high-interest debts, such as credit card debt, engaging in gig work can help you pay these off more quickly. The extra income can also be used to build up your savings, giving you more financial security in the long term.
The real median income of all workers 15 and over in the United States in 2020 was $41,535, or roughly $19.96 per hour on a full-time work schedule. According to Payoneer, freelancers earned an average of $19-$22 per hour in the same year, and in 2022, that rate increased to over $31 per hour.
A shift in worker mindset from full-time employment to gig work can help close the financial security gap for many people in the United States.
2. Gig work can help you diversify your income sources
Diversifying your income sources is always a good idea, and gig work can be a great way to do this. If you rely on a single source of income, you are much more vulnerable to financial shocks. When it comes to personal finance, diversification is key.
For example, if you lose your job or experience a reduction in hours, your income will be greatly affected. However, if you have several different sources of income, such as gig knowledge work, you will be cushioned against these shocks. This can give you greater financial security and peace of mind.
The beauty of gig work is that there are always new projects and clients to be found. Once you have built up a good reputation, you will likely find it easier to get work. There are also many online platforms, such as OnFrontiers, that make it easy to connect with potential clients as a vetted knowledge professional.
3. Gig work can provide greater flexibility and control over your working life
One of the main reasons people engage in gig work is the increased flexibility it offers. Gig work can be a great solution if you have family commitments or other obligations that make it difficult to maintain a traditional 9-to-5 job. From a financial standpoint, this flexibility can help you save on childcare costs, commuting costs, and other work-related expenses.
In addition, gig work gives you more control over the projects you take on and the hours you work. This can make it easier to achieve a better work-life balance, which is something that is important to many people.
Engaging in gig knowledge work can be a great way to improve your financial situation. It can provide you with extra income, help you pay off debts, and give you greater flexibility over your working life.
If you are considering engaging in freelance knowledge work, be sure to do your research and choose a reputable platform. OnFrontiers is a great option for those looking for freelance opportunities for the public or social sectors.