Last month Newsweek reported “a new generation of workers has 24/7 connectivity, lacks corporate loyalty, and thinks like mavericks. Put them together and you get gigonomics.” The trend to work part-time, freelance and on a contract basis is growing rapidly in the U.S., mainly as full-time jobs disappear.

Hustling is how the fittest are surviving in some cases.  I have one friend who’s currently juggling three jobs – tv producing, magazine editing and teaching English as a second language. Another is designing web sites, teaching new media and working for a jeweler.  For many, the transition is one they sort of just fall into. And somewhere along the way you might start to wonder – am I saving enough? How do I know if I can afford something if my paycheck isn’t consistent? Where can I get affordable health insurance? While there are many freedoms attached to having various revenue streams and scattered part-time commitments, managing your money can be one of the challenges. Here’s what I’ve learned based on my own experiences and discussions with friends and other experts.

The Best Ways to Pull in Revenue Streams…
 

Log Online. Sites like Elance.com and SnagaJob.com are reporting tremendous increases in job postings for online work.  Elance, for example, has over 100,000 active employers looking to hire on its site. The top hiring categories there are Information Technology, Creative, Marketing and Operations like data entry and administrative support.    

Keep Your Projects Flowing. Try to move from one project to the next as seamlessly as possible. This is easier said than done, of course. But keep your resume circulating and continue to network even when you are in the midst of a project. Ask for extensions on your current contract’s term and inquire about any  help the company may need in a different area or upcoming project. 

Monetize Your Skills. Any special interests, skills or hobbies you have can be great revenue streams. If you have expertise in anything – a language, a subject, cooking, crafts, teaching, etc., these are all profitable skills. Begin by posting your services on community boards, calling up friends and family and networking within your existing social community. My friend who teaches English as second language? He makes $40 per hour and holds sessions in his kitchen.

Securing Health Care…

One of the caveats to working on a part-time basis or freelance is that you probably won’t qualify for full-time benefits like health care. There are some exceptions – retailers like Whole Foods, Costco and Starbucks offer benefits to full and part-time employees. But for the most part this is going to be an out-of-pocket expense. Some ways to lower the cost of health care is to join a professional union – like the Freelancers Union (freelancersunion.org) where members can get access to more affordable health care. Your state may have a subsidized plan for folks who are within certain income brackets and if you are young and healthy with no preconditions it’s worth checking out rates online for an individual policy at sites likeesurance.com and  ehealthinsurance.com

Preparing Your Taxes….

This is really important. When you freelance or work part-time sometimes the paychecks don’t account for taxes. So it’s critical that before you spend a dime of that paycheck take at least 25% or more (depending on your tax bracket) and put it in what I call a “Tax Savings Account.”  You may also need to make estimated payments quarterly. You may also need to pay self-employment tax to cover social security and medicare. The good news is – there’s lots you can deduct! From out-of-pocket health insurance and medical costs to home office expenses, there is a laundry list of items that you may be able to deduct from your taxable income. Check out irs.gov for all that.

How to Manage Your $??

Last but not least, you want to micromanage your dollars and cents. A friend of mine who freelances as a producer wanted to know how much she should be saving, since she usually receives a lump sum instead of a biweekly paycheck. Here’s what I suggest. Pay yourself every two weeks like you are an employee of your own company. If you receive, say $10,000 in a lump sum, deposit that into a checking account and then have automatic $500 transfers every two weeks to a personal savings account. That’s a decent 10% saved each month on that basis. At some point that money in checking may run out – so that’s why it’s important to save regularly and consistently. That savings will add up and when you’re transitioning from one job to the other, it will really come in handy. Also, try to bulk up your personal rainy day savings to at least six months of necessary living expenses (rent/mortgage, food, gas, etc.)