Consumer Watch: Making the most of the gig economy
If you have a side job to keep up with your finances, certain mistakes can keep you from getting ahead. A second job is more common than ever before, and if your side job is part of the gig economy, freedom in your already busy schedule is a major perk. Still, you have to watch out for pit falls.
If you've ever driven for Uber or Lift, delivered food through Postmates, or even watched someone's pet through Rover, that's being a part of the gig economy.
Fox 25 consumer watch spoke to an Oklahoma Uber driver earlier this year. She didn't want to be named, but says the ease and potential for extra cash makes life easier.
"It helps for like the extras. It helped whenever his birthday came along and Christmas obviously," say the driver of how the money helps with gifts for her son.
It's good sense to use that "extra cash" for those occasional extra expenses. Financial experts say the problems come up when the money is basically wasted.
If you are reinforcing bad habits, like eating or drinking out too much, the money could have gone to something more useful. Consider having a plan for that gig money that is similar to your standard budget.
“If you are looking at income that is not actually stable, maybe one month you have some income coming in, and then the next month not as good. The important thing to do is to be consistent and save a little bit of everything that comes in,” says Melinda Warren, co-president of Hughes Warren Inc.
The gig economy can often be unstable making it tough to plan how much money will come in. Never let yourself think, it isn't worth it to put some away.
“That is a mindset that is very common-- well I don’t have enough money to save. It really doesn’t matter the amount. The important thing is to remember to put something back,” says Warren.
Planning your spending makes it less likely you will be impulsive with the cash.
People making use of the gig economy to lower their debt will often funnel the entire amount toward that debt. Warren says that you'd be better served long term to send most of the money to lower your debt, but still put a percentage of it in a savings account.