As the American workforce continues to change, an increasing number of people are choosing to work as gig workers.
This can be a great option for those who want more flexibility and control over their work schedule, but it also comes with its own set of challenges.
But gig work also comes with a number of challenges that can often arise. Below are five of the most common ones and ways to solve them.
1. Maintaining a Stable Income
Maintaining a stable, predictable income is usually one of the biggest challenges for gig workers. Since you’re not always working, it can be hard to have a steady stream of income coming in.
One way to overcome this challenge is to set aside money each month to cover your expenses, even when you’re not working.
This way, you’ll have a cushion to fall back on when work is slow. A solid schedule can also help you to plan out your days or weeks to ensure you’re working enough to earn a living.
It’s recommended that you find a good work-life balance that works for you, which means not overwhelming yourself with jobs.
Make sure that your working hours are dedicated solely to working and that your off time is used to relax rather than play catchup where possible.
2. A Lack of Costumers
It can be hard to find new clients when you’re first starting out as a gig worker. Looking specifically at ridesharing, it can be particularly difficult.
Rideshare driving is not like other professions in which a referral or networking goes a long way.
Instead, it really comes down to chance, and every day will look different when using popular apps. Because of the uniqueness that ridesharing presents, you’ll need creative solutions.
One of which is dual apping. Using more than one platform at a time can help to mitigate the effects of a slow day or location.
Additionally, it’s important that you create a good profile and rating, as this can help you have a good follow-through rate.
That’s because part of the battle in getting riders is making sure they don’t cancel on you once you’ve accepted their request. A suspicious profile or low ratings are a common cause for that happening – which can easily be avoided.
Another way to grow your customer base is by basing yourself in busy areas. If you live in the suburbs, consider driving over to a populated city center to up your chances of getting work.
There are likely more people who need rides in the city than in a sprawling neighborhood.
3. Taxes
When you’re a gig worker, it’s important to remember that you’re also self-employed.
This means that you’re responsible for your own taxes and that you need to set aside money each month to make sure you have enough come tax time.
And don’t forget about quarterly estimates!
One way to do this is to have taxes automatically withheld from your earnings, such as automatic transfers.
That way, you don’t have to worry about saving up come April. Additionally, it’s important to keep track of your expenses throughout the year.
Expense tracking can be done by using a dedicated app or simply by keeping receipts and logging them into a spreadsheet.
At the end of the year, you can then deduct these expenses from your taxes, which can help to lower your bill.
4. Finding Health Insurance
One of the downsides of being a gig worker is that it can be hard to find affordable health insurance.
You can overcome this challenge by comparing different plans and looking for one that fits your budget.
Most states offer an open enrollment period specifically geared toward those who need insurance outside of an employer.
You’re able to compare plans and providers online or even work with an insurance agent to find something that works for your needs. There are also options like virtual healthcare, a rising trend among gig workers.
Just keep in mind that most insurance agents work exclusively on commission, so you’ll want to avoid a greedy salesman looking to sell more insurance than you need.
Don’t forget to also search for dental and vision insurance, which are usually much less than health and can make for well-rounded coverage.
Be sure to check your local guidelines on obtaining insurance and find something during the open enrollment, or you run the risk of not being able to get insurance until the next enrollment period!
5. Retirement planning
When you’re a gig worker, it can be hard to save for retirement. One way to overcome this challenge is to make retirement planning a priority and automate your savings so you don’t have to think about it every month.
Even better than leaving your retirement savings in your savings account is investing them.
One way is to invest in a 401k plan. This plan allows you to contribute pre-tax dollars from each paycheck, which can help reduce your taxable income.
With traditional employment, you may be eligible for employer matching up to a certain percentage, but gig workers don’t have the benefit.
To see your money grow, you’ll want to invest as much as possible early on in order to let your money grow.
There are plenty of financial institutions that gear their services toward the self-employed, helping you to maximize your efforts.
Another option is to open a Roth IRA account. Unlike a 401k, contributions to a Roth IRA are made after taxes are taken out, but the money grows tax-free.
This means that you won’t have to pay taxes on the money when you withdraw it in retirement.
If you’re not ready to open a savings account, you can still set up an automatic transfer from your checking account into a savings account each month.
This will help you to slowly build up your savings over time. Whichever route you choose, be sure to start saving for retirement as soon as possible – the earlier, the better!
The Bottom Line
Working as a gig worker has its own set of unique challenges. However, by using the tips provided in this article, you can overcome many of these hurdles and make the most out of your self-employment.
Remember to compare health insurance plans, save for retirement, and invest early on to let your money grow. With a little bit of effort, you can be successful as a gig worker!