Sense & Centsibility Blog
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Three tips for being a successful gig worker [in a gig economy]

Are you thinking of becoming a gig worker taking on side hustles or side-gigs like driving for a ride-booking program, delivering food from restaurants or grocery stores, or selling items on internet platforms? There are lots of reasons to earn extra cash, such as for the holidays, a special event or vacation, or even to quickly pay down some debt. Maybe you are like 58% of all gig workers who rely on this job to pay for life’s essentials like housing, food, medical costs or transportation. Regardless of your reasons for considering gig work, I want to share three tips to make sure it’s as lucrative as it can be for you. 

What is a gig economy? 

The Internal Revenue Service (IRS) says a gig economy “is activity where people earn income providing on-demand work, services or goods. Often, it’s through a digital platform like an app or website.” One thing to note is that gig economy income is taxable.

What is a gig worker? 

There are many types of gig workers. If you work a part-time job in addition to a full-time job, you’re a gig worker. If you’re in a profession like nursing where you “float” between different departments, you are considered a gig worker — a temporary or contract worker treated as an employee, except typically without benefits. 

Another type is an independent gig worker. You set your own hours and work as often (or as little) as you want, and you typically use some type of digital platform that connects you with your customer. Services include ride-booking, short-term lodging (like Airbnb and Vrbo), food delivery, walking or caring for pets, or selling items online, among others.

Tips to ensure your gig work experience is successful 

Learn about the pay structure 

According to a 2021 Pew Research Center study, less than half of gig workers using a digital platform understand how the companies that run the platforms determine how much they get paid. This makes it incredibly difficult to track earnings, ensure that they are being paid fairly and know the entire amount they are owed. That said, almost two-thirds of current or recent gig platform workers think companies that run the platforms are fair when it comes to their pay, according to the same Pew Research Center study. 

Due to the varying and unregulated nature of pay structures in the industry, it is difficult to outline specific steps gig workers should take, but here are some suggestions: 

  • Make sure to ask questions until you understand the pay structure.
  • Keep good records of hours worked, the mileage (if appropriate) and all tips received.
  • Compare your information to whatever documentation the company sends you, and ask about any inconsistencies.

Manage your money

In a May 2021 Washington Post article, nationally syndicated financial wellness columnist Michelle Singletary points out that 85% of side-gig workers make less than $500 per month. The income from gig work is irregular, which can make it difficult to create a spending plan, especially if it is the only source of income. In the same article, Singletary outlines a system for managing cash. Here is her advice (with some of mine mixed in): 

  • Set a baseline for expenses. My recommendation is to add up all bills, expenses and discretionary spending so you know how much you need to bring in every month. If you don’t know what you typically spend, review three months of bank and credit card statements for a good starting point. 
  • Open a checking account for earnings from your gig work. Singletary calls this a “sweep account,” meaning earnings go in and then you transfer what is needed to your regular checking account to cover monthly expenses (or another specific goal). This also makes it easier to keep track of earnings. 
  • Save money for the slow months. When side-gig work is irregular, there will be lower income months and higher income months. It’s tempting to increase spending when you earn more, but try to save that extra money to make up for the months when you earn less. 
  • Set up a tax payment account. Since many gig platform workers are considered independent contractors, it’s imperative to calculate the federal, state, self-employment and any local taxes you might need to pay. Check out this article from NerdWallet to learn more, or get in touch with Prepare + Prosper, a trusted organization, to help you file your taxes. Don’t ignore the taxes. As much as you may need the cash today, putting off your tax payments can create a significant debt. 

Beware of gig work scams — regardless of whether you are the worker or buyer

As the prevalence of gig work grows, so too do the opportunities for scammers. Job scams have been around for a long time, but the tactics are continually evolving. The Federal Trade Commission (FTC) reported that in 2022, business opportunities and job scams were in the top five most common frauds. The FTC offers the following tips for avoiding a job scam: 

  • Search online. Enter the name of the company plus the words “scam,” “review” or “complaint.” Take note: just because there are no complaints doesn’t mean the company is honest. Also, scammers can spoof company websites to trick victims into thinking they are applying at a well-known company, when it really is a scam. 
  • Talk to someone you trust. If something doesn’t feel right about a job offer, trust your gut. Or talk to someone you trust and get their input.
  • Don’t pay for any job opportunity. Legitimate employers won’t make you pay up front to work for them.
  • Never bank on a “cleared” check. Scammers might send you a check to deposit, then ask you to return part of the money or buy gift cards with it. Don’t deposit the check: it will bounce, and the bank will want you to repay the amount of the fake check. 
  • Don’t give confidential information to an employer until you are hired. Legitimate employers will request your Social Security and driver’s license numbers after hiring you to complete the I-9 form. Scammers will ask for this information up front.
  • Be wary of completely online interviews and job offers, especially those with salary offers that seem too good to be true. They probably are!

Contact us for support

Looking for support with managing your finances so you can make your gig work a successful experience? We offer free, confidential support with budgeting and debt management, credit improvement and student loan repayment. Our certified, nonjudgmental counselors can also work with you if you are harmed by scams.

To learn more about the services we provide or to start receiving support, please call 888.577.2227, email us or complete our short contact form.

Shannon Doyle


Author Shannon Doyle is program manager for partnerships and education with LSS Financial Counseling.