In recent years, an increasing amount of people in the UK have turned to gig work to make money on the side and manage their finances. For many, gig work offers a flexible way to earn extra cash, which can be especially useful for paying off debt.
In this article, we’ll explore what gig work is and how it can help you manage and reduce your debt.
What is the gig economy?
The gig economy is a job market where people work short-term or freelance jobs instead of having permanent, full-time employment. These jobs can be anything from driving for a ride-share company to doing freelance graphic design. Due to advanced technology, the gig economy has expanded, with apps and websites that link workers to customers or clients.
What is gig work?
Gig work refers to any job you do on a temporary or freelance basis. These jobs offer flexibility and a wide range of opportunities. The flexibility of gig work allows you to choose when and where you work, making it easier to fit around your personal life. This is particularly beneficial for students, parents, or anyone with other responsibilities.
The variety of gig work is another significant advantage. There are many different types of gig jobs, from delivering food and driving people around, to pet sitting and freelance writing. This means there’s something for everyone, no matter your skills or interests.
Income potential in gig work can vary. Some gig jobs pay a steady wage, while others can offer higher pay if you have specific skills. For example, freelance writers or designers can earn good money for their work.
If you’re interested in potentially starting some gig work of your own, websites like Fiverr and Upwork might be worth looking at.
Joining Fiverr is free, with no subscription or upfront fees, although they do take 20% of your earnings. To begin, just create a “seller” account, set up your gig, and start offering your services to Fiverr’s worldwide audience.
Gig work offers a level of independence as you’re your own boss. You decide which jobs to take and how much work to do. This freedom is empowering but requires good self-discipline and time management.
Can gig work help pay off debt?
Many people start gig work to earn extra money, which can be used to pay off debt. Gig work can provide additional money on top of your regular job, helping you pay off debt faster and reduce the total interest you pay. Unlike fixed-salary jobs, gig work lets you increase your earnings by taking on more jobs. This is useful if you want to make larger debt payments quickly.
Another benefit is that many gig jobs don’t require special qualifications or investments, so you can start earning money quickly. For example, you could become a delivery driver or ride-share driver with just a valid driver’s licence and a vehicle.
Considerations for using gig work to pay off debt
While gig work can help you pay off debt, there are some things to keep in mind. Gig work income can vary week to week, so it’s important to budget carefully and be prepared for times when work is slow. As a gig worker, you’re considered self-employed, so you’re responsible for paying your own taxes. This includes both income tax and National Insurance contributions, which can be higher than what regular employees pay.
Gig workers also don’t get benefits like paid leave, health insurance, or retirement contributions, so you’ll need to plan for these additional expenses.
For more information on dealing with debt, check out our article on How to Deal with Debt Anxiety.
For personalised expert guidance on Individual Voluntary Arrangements (IVAs) and Debt Management Plans (DMPs), you can speak with the helpful team at MoneyPlus today.
