Welcome to another edition of the Young Adult’s Perspective series, where we offer tips and strategies to help newly financially independent young adults manage their finances and stay debt free. In last week’s post, we covered how to set financial goals that you can accomplish in six months or less. This week, we are going to discuss ways to increase your income outside of your current job. The gig economy is made up of people who work side jobs to support their monthly income, working when they want to and doing what they want to do. The gig economy is growing at a fast rate; according to Statista, only 9% of Americans held a side job in 2012, but a recent report by Bankrate shows that that number has risen to 45%.
There are a lot of side hustles that are fairly easy to take part in and can help you rake in a lot of cash, but there are also a few risks that come with working in the gig economy that you should be aware of before you get started.
Personal vehicles have a very active role in the gig economy. Whether you are working with a rideshare giant like Uber or Lyft, delivering food for companies like Doordash or Postmates, or are using your car for some other type of work, there are plenty of opportunities to drive around your city for some extra cash. But here’s something you might not know about when you sign up to drive for these companies: your car insurance policy might cancel or not provide coverage for you when working a side hustle. This is because some personal insurance companies have clauses in their contracts against driving-for-hire work, since it technically classifies as commercial driving. While some gig economy companies will offer some car insurance while you are on the clock, it’s important for you to check your insurance company’s rules and policies regarding ridesharing and delivery work before you sign a contract.
Another popular opportunity in the gig economy is offering your home for rental housing operations like Airbnb. If you live in a desirable vacation destination, and can comply with their housing standards, Airbnb will allow you to offer your home as a rental space to interested customers. One of the concerning things for hosts is the fear of damages to or theft of property. Fortunately, Airbnb has measures to reimburse hosts for any such incidents, but just because the process is available doesn’t mean you are guaranteed to have your damaged goods replaced. It’s important to know and follow the guidelines set out by their host guarantee to best insure your chances of reimbursement.
Freelance work has always been a staple of the gig economy, long before the term was coined. Many of the classic freelancing jobs are in home repair and/or landscaping, running errands and babysitting. With the rise of the digital age comes a wider variety of jobs available for freelance work, such as art commissions, website designing and testing, and article writing. Such work is often easy to pick up, and may even lead to a future career, but it’s important to avoid getting ripped off. This is easier to do in person, because you can better insure that you are receiving full compensation for the work you were hired to do. You shouldn’t do work other than what you were contracted to do, unless otherwise interested, and you should be paid what was promised to you. Work over the internet, while it can be more convenient, has a risk of not being compensated. Even if the client seems trustworthy, they can try their best to snake their way around paying you. Such work can be difficult to regulate, so there’s no guarantee people will be brought to justice for exploiting you.
Although there are risks with any side hustle, taking up a role in the gig economy can be incredibly rewarding. These jobs can help fill your pockets and give you more experience, all when you want it. If you are experiencing financial difficulty and are looking for a solution, non-profit credit counseling can help you make sense of all your options. Contact us today for a free financial assessment with one of our certified credit counselors.
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