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How Portland’s Gig Economy Workers Can Manage Their Finances

The gig economy offers flexibility and freedom, but it often comes with financial uncertainties. Managing irregular income while ensuring long-term financial health requires thoughtful planning.

According to neilsberg.com, Multnomah County has consistently been the leading contributor to Oregon’s gig economy, growing by 23 percent from 2012 to 2019. While 2024 data specifically for Portland is limited, estimates suggest continued growth influenced by the popularity of flexible gig roles and increasing digital platform adoption.

If you’re already one of Portland’s nearly 45,000 active gig workers or thinking about joining them, read on for gig economy financial advice and gig economy budgeting tips!

What is gig work?

Gig work can be categorized into several types:

Freelance Work: This involves individuals offering their skills and services on a per-job basis. This includes fields such as writing, graphic design and web development. 

Contract Work: This is like freelancing, but it often involves longer-term commitments to a single client or project. Contract workers might be hired for specific projects with a start and end date, such as software development or consulting roles. 

Project-Based Work: This type of gig work is defined by tasks or projects with clear objectives and deadlines. Project-based workers are often hired to complete a specific job, after which the contract ends. 

On-Demand Work: This type of gig work is enabled by digital platforms that connect workers with immediate, short-term tasks. Ride-sharing and food delivery are classic examples of on-demand work. 

How am I supposed to manage my finances with the inconsistent income I earn as a gig worker? 

According to credit bureau Experian, here’s how to effectively manage your finances with an inconsistent income: 

Add together your fixed expenses like rent or mortgage, credit card and vehicle loan payments.

  • Estimate your variable expenses like utilities, groceries and entertainment.
  • Calculate your average income (your income over three to six months).
  • Allocate your paychecks by making a budget.
  • Build an emergency fund.
  • Adjust your budget as needed. During high-earning months, set aside extra income to create a buffer for slower periods.

Let’s take a closer look at a couple of these bullets.

1. Making a Budget

  • There are several ways to do this, but zero-based budgeting works well for many independent contractors (gig workers). 
  • With a zero-based budget, every dollar you earn is assigned to a specific expense so that your income and expenses “zero out.” 
  •  Be sure to include all the categories you created when assessing fixed and variable expenses, including one-time expenses and money set aside for savings.

Want the convenience of managing your budget on the go? According to bankrate.com, here are the best budgeting apps:

  • PocketGuard: Best for tracking spending
  • You Need a Budget (YNAB): Best for user-friendliness
  •  EveryDollar: Best for organizing funds
  • Goodbudget: Best for envelope budgeting
  • Honeydue: Best for couples
  • Wally: Best for worldwide access

And don’t forget Trailhead’s mobile app for account management, depositing checks, transferring money, and paying bills! Learn more here.

2. Building an Emergency Fund

An emergency fund is a dedicated account used to cover unexpected expenses or financial emergencies. 

Key Characteristics:

  • Low Risk: Typically held in low-risk accounts
  • Separate from Other Savings: It’s crucial to keep your emergency fund separate from other savings goals like retirement or vacation. 
  • How Much to Save: Aim for three to six months of living expenses.
  • Where to Keep Your Emergency Fund: Consider keeping your emergency fund in Trailhead’s Kasasa Saver high-yield savings account or Money Market Savings account. 
  • Cut Unnecessary Expenses: Identify areas where you can reduce spending and divert those funds to your emergency fund. 

What are some good tax planning tools for gig workers?

According to Forbes.com and The Motley Fool, here are the best tax planning tools for gig workers:

  • TurboTax Premium is the best self-employed tax software for customer service.
  • TaxSlayer Self-Employed is the best low-cost tax software for the self-employed.
  • TaxAct is best for bundling pricing
  • H&R Block Self-Employed is best for online and in-person tax prep

Trailhead members get a savings of 20 percent on TurboTax federal products and the best-in-market offer with savings of up to $25 on in-office tax prep services with H&R Block. Get started here.

As an independent worker, you can deduct work-related expenses from your taxes. Keep records of costs like equipment, software, transportation and home office expenses. 

Also, plan for taxes year-round. Gig workers are responsible for their own taxes, which may include quarterly estimated tax payments. Set aside a percentage of each paycheck (typically 25-30 percent) to cover your tax liability. Consider Trailhead’s Tax Saver or Money Builder Add-On Certificate Accounts which are designed to help you save each month while earning a great rate.

How can I save for retirement? 

Traditional employers offer retirement benefits, but gig workers must take charge of their retirement savings. Consider opening an IRA (Individual Retirement Account) at Trailhead or a Solo 401(k). Automate contributions to these accounts during high-earning months to help secure your future. 

Are there investment services I have access to as a gig worker and a member of Trailhead?

Absolutely! Trailhead partners with Jeff Brooks and City Fiduciary Group, a registered representative of Securities America and Arbor Point Advisors, to offer investment services and financial planning to our members. Services offered include tax preparation services, small business and sole proprietor retirement plans, and asset management. To learn more, click here. 

Any other financial tips?

Relying on a single gig or client can be risky. Explore different platforms, skills or services to diversify your income streams. This not only reduces your financial risk but also provides additional opportunities to grow your career.

While gig work offers unparalleled freedom, financial management is essential to making it sustainable. By budgeting smartly, saving strategically and planning for taxes and retirement, gig workers can enjoy the benefits of their flexible lifestyle without financial stress.