Making Money in Gig Economy

Steps to Take: Build Financial Security While Working in an Unpredictable Sector

- Craig Torr

The rise of remote work and a shifting employment landscape have contributed to the rapid growth of the gig economy, comprising independent contractors, freelancers, online platform workers and on-call professionals. While this work model offers flexibility and autonomy, it also comes with financial challenges, particularly the lack of employee benefits and protections.

Proper financial planning is, therefore, crucial for gig workers seeking long-term financial stability. Here's what to consider if you're a freelancer or independent contractor.

Choose the right business entity: Selecting the appropriate business entity is essential for the smooth operation of your freelance or gig work.

The best choice will depend on factors such as the nature of your work, projected earnings, growth plans and risk exposure.

Each type of business structure—sole proprietorship, private company, or partnership—has unique tax implications, administrative requirements and liability considerations. Seeking professional advice can help you make an informed decision.

Keep business and personal finances separate: Open a dedicated business account and ensure that your personal expenses are distinct from business transactions. Prioritize paying yourself a sustainable income while maintaining a good credit score, as this will influence your ability to secure financing in the future.

Meeting your tax obligations is also essential, so keep detailed records and file returns on time.