Financial-planning tips for gig workers

As someone who understands the challenges of working in the gig economy in India, here are some financial planning tips to help gig and blue-collar workers navigate an uncertain future. It can be tough to manage finances when you don’t have a steady income, but with the right planning, you can feel more secure and confident in your financial future

* Create a Budget and Stick to It: It’s important to understand that every paisa counts, and that’s why creating a budget is essential. Think about your expenses and income, including
what you make, and prioritise your spending. Try to focus on your basic needs, and cut back on unnecessary expenses. There are plenty of budgeting apps that can help you stay on track.

* Build an Emergency Fund: Gig work can be unpredictable, and that’s why it’s important to build an emergency fund even if you park away a small portion of your earnings regularly. Think about unexpected expenses that may come up or a lull in work. Having an easily accessible savings account can provide you with peace of mind and a financial cushion when you need it the most.

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* Invest in Insurance: Insurance can seem like an additional expense, but it’s important to have protection against tangible risks. Health insurance can help you and your family during medical emergencies, and life insurance can provide financial security for your loved ones in case of your untimely demise. Look for insurance plans that fit your needs and your budget. There are many new insurtechs now that offer plans optimised for gig workers.

* Diversify Your Income: Relying on one source of income can be risky, especially in the gig economy. Think about diversifying your income streams by exploring additional gig work opportunities or starting a side business. Leverage your family or spouse to help you. This can provide a buffer during times of financial uncertainty.

* Manage Debt: Taking on debt can be stressful, and it’s important to manage it properly. Avoid taking on debt unless it is necessary. Try to invest funds in productive uses and pay off any debts as quickly as possible to avoid accruing interest charges.

* Opt for Earned Wage Access (EWA): EWA is a new type of financial service that allows gig workers to access a portion of their earned wages before payday. This can be an affordable option if you need to pay for unexpected expenses or cover bills before your next paycheck. 

Finally, I would like to add that I know how challenging it can be to work in the gig economy, and by deploying these important useful tips you can securely and confidently navigate any uncertainties that you might face. Remember, it’s never too late or too early to start planning for a better financial future.

(The writer is co-founder & CEO, KarmaLife, an earnings-linked financial solutions provider to the gig & blue-collared economy)