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Side Hustle Success: 5 Financial Tips for Freelancers and Gig Economy Workers

Admin • August 25, 2023

The freelance and gig economy certainly has many attractive benefits. Many people want or need to supplement their primary income, others crave flexibility and variety, and some don’t want to be tied to a single physical location or the same schedule every day. Approximately 16% of the American workforce is comprised of gig workers with nearly half of gig workers also holding full-time jobs.

The high earning potential and ability to be your own boss lure many people into the freelance and gig economy world. But it’s important to remember and be prepared for the challenges that come with this type of work such as lack of insurance, differences in tax reporting, and irregular income. 

 

5 Financial Tips for Freelancers and Gig Economy Workers

With sufficient financial knowledge and self-discipline, you can be successful as a freelancer and accomplish your goals. Understanding these five concepts can help you start on the right foot. 

  1. You should diversify your income options. 
  2. You need to know your worth. 
  3. Become a master of your tax responsibilities. 
  4. Learn how to manage your fluctuating income. 
  5. Insure yourself today and invest in your future. 

These tips, along with regular and comprehensive financial planning will help you navigate the amazing world of side hustles, freelancing, and the gig economy. 

 

1. You should diversify your income options.

Finding success as a freelancer, especially when you freelance full-time, often takes a variety of skills. For example, if you work online as a virtual assistant, it’s best to be familiar with all the major bookkeeping software and customer relationship management (CRM) programs, as well as have strong communication and social media skills. Ensuring you’re the “complete package” will make you more marketable and valuable. 

It’s also important to diversify your skills and talents because freelance work can often be volatile. If your work is suddenly no longer needed with one client or platform, you’ll need to quickly pivot and find a new opportunity. Having a variety of skills under your belt will help decrease the amount of time you’re out of work. 

Take some time to research the services that are most in need and commit to learning them through online workshops, reading articles, or watching tutorials. As you continue working in the gig economy, never stop learning, increasing your skills, and adapting to the ever-changing landscape. 

 

2. You need to know your worth. 

Pricing yourself correctly as a freelancer is an extremely important part of being financially successful. Price yourself too high and you may find your inbox empty. Price yourself too low and you sell yourself short. There are many strategies you can use to discover your worth and price yourself: 

  • Discover what other freelancers are charging for similar services (remember, your specific experience and positive references will be a major factor in your worth and prices as a freelancer). 
  • Think about the expenses you will incur in your freelance work (including taxes!). 
  • Determine if you’ll charge an hourly rate or a project rate.
  • Think about the worth you are providing your clients. Oftentimes, your work is providing clients with intangible value and those benefits should not be overlooked. 
  • Pricing your goods and services is not a one-time task, you’ll want to continually evaluate your prices as your skills, experience, and expenses increase. 

 

3. Become a master of your tax responsibilities.

Freelancers and gig economy workers have to pay special attention to their taxes. Instead of the traditional W2 tax form, you will receive a 1099-NEC form from every client you worked for throughout the year. 

As a freelancer, you are responsible for paying self-employment tax (15.3%) as well as your standard income tax. Typically, your employer would pay for half of your Social Security and Medicare taxes, but as a freelance worker, you’re responsible for the entire portion. 

If you expect to owe more than $1,000 in taxes in any given year, you must pay part of your tax bill quarterly. You can use IRS Form 1040-ES to estimate how much you should pay for each quarterly tax payment. Some states also require freelancers to pay quarterly state income taxes. 

Because freelancers typically incur expenses that typical W2 employees don’t (for example, if a W2 employee needs a phone to perform their job duties, one is typically issued and paid for by the employer), they can claim tax deductions . 

Typical freelancer tax deductions include home office supplies, business-related meals and travel, required equipment, phone, and Internet services, certifications, and more. These deductions can drastically help reduce your tax liability, just ensure they are legitimate and properly documented. 

Because self-employed taxes can be so nuanced, it can be wise to hire a tax professional. They will be able to advise you on your quarterly tax payments, business structures, and tax deductions. 

 

4. Learn how to manage your fluctuating income. 

Irregular income can be challenging to budget, but it’s not impossible! Follow these guidelines to start your freelance budget today: 

  • Start by looking at your monthly expenses and determine what you need to earn every month to cover your essentials. 
  • If you don’t have one already, make a plan to build up an emergency fund to cover you for slower income seasons. 
  • Average your monthly income and create spending allowances for non-essential expenses. Allow yourself to spend money on fun items and experiences within reason. 
  • Use higher-earner months to fund your bigger goals. After knowing what you need to earn to cover your essentials and even a few non-essential expenses, you can save and invest any extra income for non-monthly expenses like a vacation or down payment on a home. 
  • Keep detailed records of your business expenses—this will save you money and time during tax season.
  • Always overestimate your expenses and underestimate your income. 

And while we’re on the topic of getting income, invoice management is a skill you will want to master, regardless of the field you’re in. Here are some tips to get you started: 

  • Request a deposit before starting work on a project. 
  • Automate your invoicing and ask consistent clients to sign-up for automatic payments. 
  • Be clear about your payment terms and don’t be afraid to tack on late-payment fees. 
  • Keep records of all invoices. 

It’s solely your responsibility to make sure you get paid. By having automatic, professional systems in place, this process can become streamlined and easy to manage. 

 

5. Insure yourself today and invest in your future. 

Health insurance is often offered at a free or reduced rate from W2 employers, but as a freelancer, it’s up to you to secure your own health insurance plan. You can apply for coverage through Health Insurance Marketplace and thankfully, your premiums are tax-deductible ! You don’t want an unexpected medical expense to derail your financial freelancing progress. 

Retirement contributions through paycheck deductions are common with W2 contracts as well. As a freelancer, you’ll want to ensure you’re not putting off your retirement contributions. You can contribute to a: 

Before committing to a certain retirement plan, take time to understand the contribution limits, withdrawal rules, and tax implications so you can choose the best option for your financial situation. 

Navigate the Gig Economy with Five Pine Wealth Management

At Five Pine Wealth Management , we can help you navigate your various income sources while providing you with comprehensive retirement, investment, tax, and goal-planning advice. Whether you are a full-time freelancer or supplementing your primary income, you want to ensure you’re using your money in the most strategic way possible. 

To see how we can help you today, email us at info@fivepinewealth.com or give us a call at 877.333.1015. We can’t wait to hear from you! 

The Millennial Advantage: How to Use Your Generation’s Strengths to Build Wealth

March 28, 2025
Despite always hearing about the aging of America and the baby boomer generation, did you know the millennial generation is actually the largest age group in the country? Born between 1981 and 1996, millennials outnumber baby boomers post-WW2, with about 72.2 million millennials in the United States, as of 2023. The media often highlights millennials' financial challenges: mountainous student loan debt, a competitive job market, unaffordable housing, and credit card debt. There’s no doubt it’s been more challenging for millennials to save and gain a stable financial foothold compared to previous generations. Yet despite these hurdles, millennials have financial opportunities available to them that previous generations did not. Millennials came of age with the rise of the internet and advances in technology; they’re digital natives, incredibly tech-savvy, and well-positioned to master the digital era they live in. Millennials’ unique position in history gives them advantages when it comes to investing, starting a business, and increasing their financial literacy. Millennials and Investing Millennials are changing the game when it comes to investing—innovative financial platforms and investment products have helped to evolve the investment landscape, and have made investing more accessible than ever before. As a millennial, embracing this innovation can help move you closer to achieving your goals and building a financially secure future. Impact Investing Millennials are known for being socially conscious with their spending and supporting brands and companies that align with their values. This desire to make a difference often extends into their investments—intentionally choosing to invest in companies that reflect their values and promote the causes they support. Through impact investing, you can support positive global change while also working toward your financial goals. Impact investing can be done through investing in Environmental, Social, and Governance (ESG) investment funds, or through pursuing a strategy of Socially Responsible Investing (SRI). ESG funds focus on businesses that have strong environmental policies, social impact initiatives, and good governance. These funds have become increasingly popular with investors, like millennials, who want to support companies that prioritize sustainability and ethical practices. SRI focuses on investing in companies that promote environmental sustainability, social justice, and corporate ethics. SRI can also exclude investing in companies that engage in activities that are considered negative or harmful—tobacco, alcohol, fossil fuels, firearms, or the defense industry. Cryptocurrencies and Decentralized Finance Cryptocurrencies are newer investment frontiers that techie millennials can be more comfortable exploring than older generations. Crypto such as Bitcoin and Ethereum are digital currencies that operate on blockchain technology , which provides increased transparency and security. Crypto investments can be risky, but can also offer high rewards. Decentralized Finance (DeFi) platforms also leverage the security and transparency of blockchain technology to offer decentralized financial services and transactions. DeFi platforms provide opportunities for lending and investing without traditional intermediaries like banks and other centralized institutions. For millennials, DeFi represents a cutting-edge way to engage with financial services and they can offer more control and potentially higher returns than traditional methods. The Power of Time One of the biggest advantages millennials have when it comes to investing is time. If you start investing early, you can benefit from compound interest and long-term investments, which can significantly boost your returns and help increase your wealth. Compound interest is the process where the interest you earn on an investment is reinvested, which generates more interest. The longer your money is invested, the more it can grow. Even small, consistent contributions to your investment portfolio can accumulate substantial wealth over time. Having a long-term investment horizon allows you to ride out market volatility, and capitalize on growth over time. By not reacting to short-term market fluctuations, you can achieve more stable returns. Long-term investing is a powerful tool that can help you build a secure financial future. Millennial Entrepreneurship This generation’s core characteristics set them apart as innovators and business creators. As digital natives, millennials have a strong grasp of technology which allows them to leverage digital tools such as social media marketing, e-commerce tools, and data analytic platforms to grow their businesses exponentially. You’ve likely seen peers thrive in their ventures through their use of social media, which has become a critical tool for marketing, brand building, and customer engagement. Community-building is also highly valued among this generation—the use of LinkedIn alone helps entrepreneurs connect with fellow collaborators, business owners, and mentors. Similar to aligning your investments with your values, you can easily integrate your ethical beliefs into your business ventures. Ethical business practices such as developing eco-friendly products, creating an inclusive workplace culture, and advocating for fair trade processes can make a positive impact and build loyal customer bases. Millennials and Financial Literacy The millennial generation has more resources than ever to increase their financial literacy. Free online finance courses are easy to access, readily available, and enable you to educate yourself so that you can make smart financial decisions to help you achieve your goals. Personal finance apps like Mint and YNAB (You Need a Budget) can also increase your financial literacy by helping you understand and manage your finances more effectively. They offer features like budget tracking, expense management, and financial goal setting to help you be in full control of your finances. Finance apps make it easier for you to stay on top of your financial health and make informed decisions in managing your money. Work with Us to Reach Your Goals  Ever-evolving technology has transformed the financial landscape significantly over the last few decades and millennials are more prepared to take advantage of that transformation than any generation before them. While you can take charge of your finances on your own, working with a financial advisor can help you find your path and stay the course of your journey toward financial security. Financial advisors can provide advice that is tailored to your individual circumstances, to better meet your unique needs and objectives. At Five Pine Wealth Management , we’re committed to helping you create a customized financial plan and investment strategy to help you reach your current and future goals. As fiduciary financial advisors, we always act in your best interest in every step we take with you on your financial journey. We also offer virtual financial planning for millennials looking to fit financial planning into their own schedules. To see if we can help you, email us or give us a call at 877.333.1015 today to schedule a meeting.

Just Got a Raise? Implement These 5 New Strategic Wealth Opportunities

March 21, 2025
Getting a raise is an exciting moment in your career and financial journey. Maybe you’ve gone through an executive-level position change and received a 10% pay bump or an internal promotion yielded you an additional 15%. Regardless of how you got your raise, you’re now in a unique position to move the needle on your long-term financial goals (and maybe splurge a little, too). But before you pull the trigger on that major purchase you’ve been eyeing, it’s important to have a long-term plan for the extra money in your paychecks. Even a significant raise can erode quickly if you suddenly upgrade your home, start vacationing like a celebrity, or snap up that Mercedes you’ve been eyeing. Below are our top five strategic wealth opportunities for you to consider the next time you receive a raise. First Things First: Understand Your New Numbers A 10% or 20% raise may sound like a huge boost, but not all that money will land in your bank account. Before making any financial moves, it’s important to calculate your new take-home increase after taxes and contributions. For example, if you receive a $25,000 raise on a $175,000 salary, you might expect $2,083 more per month. However, after accounting for federal taxes, state taxes, and other deductions, your actual monthly increase might be closer to $1,500. Knowing your actual take-home pay helps you set realistic expectations and make informed financial decisions. Getting a Raise: 5 New Strategic Wealth Opportunities For high-income earners, getting a raise isn’t just more spending power—it’s an opportunity to build lasting wealth while minimizing taxes. Instead of falling into lifestyle creep, consider these five wealth-building strategies to maximize your higher income. 1. Grow: Maximize Tax-Efficient Investment Opportunities With your increased income, you now have more opportunities to maximize tax-advantaged accounts and investment vehicles. For 2025, you can contribute up to $23,500 to your 401(k), plus an additional $7,500 if you're 50 or older. If you weren't maxing out your contributions before, your raise provides an excellent opportunity to reach these limits. Let's say you direct $750 of your new monthly take-home pay to your 401(k). You not only build retirement savings but could save approximately $2,160 in federal taxes annually if you're in the 24% tax bracket. Consider increasing your retirement and investment contributions by the same percentage as your raise. For example, if you receive a 10% raise, aim to increase your contributions by 10% of that raise. This incremental adjustment will help ensure you can maintain the lifestyle you're accustomed to when you retire. 2. Save: Optimize Tax Strategies to Reduce Liabilities A higher income often means entering new tax brackets, making tax efficiency more crucial than ever. Without proper planning, you might find a significant portion of your raise going to Uncle Sam instead of building wealth. Consider switching to a high-deductible health plan (HDHP) for your family, which can lower your premiums while giving you access to a Health Savings Account (HSA). In 2025, you can contribute up to $8,550 for family coverage , potentially saving around $2,000 annually in taxes. Additionally, the money in your HSA grows tax-free and can be withdrawn for qualified medical expenses without tax liability. 3. Diversify: Explore Alternative Investments A higher income can open the door to new investment opportunities, allowing you to diversify beyond traditional stocks and bonds. Alternative investments like real estate investment trusts (REITs) can provide exposure to different asset classes, potentially offering both passive income and long-term appreciation. These types of investments often move independently of the stock market, helping to balance overall portfolio risk. They can also offer lower barriers to entry compared to direct property ownership or other traditional alternatives. The key is to align your investments with your risk tolerance and liquidity needs while taking advantage of opportunities that complement your existing strategy. 4. Strengthen: Build Your Estate With more income comes greater potential for building generational wealth. Investing half of your $25,000 raise annually for 20 years with a 7% return could add over $500,000 to your estate. This makes it essential to have proper structures in place for efficient wealth transfer. To ensure your wealth transfers efficiently, consider: Trusts to protect assets and minimize estate taxes Life insurance strategies for wealth preservation Family-limited partnerships for multi-generational wealth planning These structures become increasingly valuable as your wealth grows. 5. Impact: Upgrade Your Philanthropy & Social Impact There's something powerful about reaching a place in life where you can give back meaningfully. Beyond the personal satisfaction of a higher income, this new chapter brings an opportunity to create lasting positive change in your community and the causes closest to your heart. Maybe you still remember the community college professor who believed in you when you weren't sure about your path. Now, twenty years later, by creating a donor-advised fund (DAF) to support student scholarships, you're not just making education more accessible—you're giving another student their own life-changing mentor. By thoughtfully structuring your charitable giving through vehicles like DAFs or qualified charitable distributions from retirement accounts, you can maximize both the impact of your generosity and the tax benefits that come with it. After all, effective philanthropy isn't just about giving money away—it's about creating meaningful change in the ways that matter most to you. Red Flags: Top Signs of Lifestyle Creep While getting a $25,000 raise provides excellent opportunities for wealth building, it's important to avoid (too much) lifestyle creep. That upgraded car lease might cost an extra $200 monthly, the bigger house another $800 in mortgage payments, and the premium credit card's annual vacation package another $400 monthly in travel costs. Before you know it, your entire raise can get absorbed by new expenses. While there's nothing wrong with enjoying the fruits of your hard work, the key is being intentional about which lifestyle upgrades truly matter to you. Here are some common warning signs that lifestyle creep might be eroding your raise: Your monthly expenses rise automatically with your income You upgrade multiple lifestyle aspects at once (housing, car, travel, dining) Your savings rate remains unchanged despite higher earnings Luxury spending becomes your new normal Your cash reserves aren’t growing despite a higher paycheck Instead of automatically increasing spending across the board, take time to identify the one or two changes that would bring the most joy and fulfillment to your life. Then, invest the rest. Put Your New Money to Work with Five Pine Wealth While these strategies focus on wealth building, don't forget to invest in yourself through continued education, health, and meaningful experiences. The key is finding the right balance between growing your wealth and enjoying the fruits of your success. Whether you've recently received a raise or are anticipating one soon, having a plan in place can help you maximize this opportunity. Our team can help you evaluate which of these strategies would work best for your unique situation and create a customized plan to help you reach your financial goals. At Five Pine Wealth Management , we can help you implement these strategies in a way that aligns with your personal goals and values. To learn more about making the most of your increased income, schedule a meeting with us. Email us at info@fivepinewealth.com or call us at 877.333.1015.  Let's work together to transform your raise into lasting wealth.
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