Even among full-time employees, pay can vary greatly from pay period to pay period. Hourly employees, for example, could work as few as 30 hours and still be considered full-time. A sales representative might work on commission, with their take-home pay depending heavily on how they perform each week.
Variable income presents a challenge when it comes to reaching financial goals. Saving for retirement is especially difficult when dealing with a fluctuating income but a side gig can be utilized to simplify long term saving. Here’s How.
The Growing Gig Economy
The gig economy is growing every year. In 2019, MBO Partners released their State of Independence in America report which documented that 41 million Americans are working independently, meaning they work for themselves.
Since hiring contract employees benefits employers as well, saving them money on benefits and giving them more freedom to staff based on need, many companies are embracing the growing gig economy and offering increasingly more contract work in place of hiring traditional employees. This means that there are many more opportunities to work as a freelancer or contract employee than there were 5, 10 or 15 years ago.
The availability of opportunities has created more chances to supplement income. While many people do freelance full-time, others pursue side gigs to bolster income as they work towards financial goals, like saving for retirement.
Saving for Retirement With a Side Hustle
Want to start socking away serious money for retirement but feel you’re at the mercy of fluctuating income? Set a retirement goal and then seek out the work necessary to meet that goal. Begin by nailing down just how much you need in retirement savings.
A retirement calculator can help to clarify a monthly goal based on the age and income of the investor. Once that number is clear, you can determine how much extra work to secure to meet that goal each month. Project-based workers can calculate how many projects will cover their monthly income goal while hourly workers will need to set aside a specific amount of time each week to bring in the right amount.
Making Time for a Side Gig
For individuals who are already working full-time, extra work may seem nearly impossible. However, there are creative ways to squeeze more work hours out of the day! Night owls can turn to the after dinner hours into freelance work online or as a Postmates driver.
Although the morning hours are often spent getting ready for the workday, the earliest risers could potentially get in three hours of work before heading to their full-time job. Of course, weekends are great for contract workers, too.
Reaching financial goals isn’t always as simple as opting into a retirement account. With enough creativity and hard work, it’s possible to adequately prepare for the future.
~ Here’s to Your Financial Health!
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