How Gig Workers View Their Jobs, Personal Finances Will Surprise You

Do you think gig workers — mainly freelancers, contractors, part-timers and temporary workers — are too busy scrambling for their next gig to bother thinking about retirement planning and other aspects of their personal finances? If so, think again. Seventy-eight percent of gig workers believe they are more involved in their personal finances as a result of participating in the gig economy, according to a new survey by mutual fund giant T. Rowe Price.

And a T. Rowe Price expert points out how gig workers can leverage that heightened focus to build bigger retirement accounts.

Why do gig workers pay more attention? Being forced to hustle for each paycheck seems to sharpen gig economy workers’ focus on their income and how they put their money to work.

They can’t take their income or their financial futures for granted, says Stuart Ritter, a senior financial planner for T. Rowe Price.

“Since gig work requires more attention to some aspects of personal finance than does traditional work (for example, filing quarterly taxes), those workers may be more inclined to apply that attention to a broad spectrum of money matters,” he said.

Once becoming gig workers, 39% of them check their financial accounts more regularly, T. Rowe Price says. Also, 32% put more effort into paying attention to bills and paying them on time. And 23% are more “hands on” with their individual retirement accounts (IRAs) since joining the gig economy.

The same pattern is true when it comes to investing. Sixty percent of workers with a side hustle, as gig work is also known, manage their own investments. Only 50% of workers who are traditionally employed do that.

Forget Stereotypes About Gig Workers

Having a side hustle doesn’t just mean driving for Uber or Lyft. Freelance web developers are one of the most in-demand types of gig workers, according to They earn $58,000-$68,000 a year on average, Glassdoor says.

And gig workers are not disproportionately millennials. The biggest portion of gig workers, 32%, are members of Generation X, who are 37 to 52 years old, T. Rowe Price says. Millennials — ages 18 to 36 — are far behind, making up only 18% of all gig workers. Baby boomers are actually the second largest segment, at 26%. The balance of gig workers belong to other age groups such as the silent generation.

But millennials do stand out from other generational groups in one key area. Even though traditional work by definition offers a steady paycheck, millennials are much more likely to feel the gig economy offers more job security. Twenty-six percent of millennials feel that way vs. only 18% of Gen Xers and 15% of boomers.

Apparently, millennials make this distinction: A traditional job may provide a paycheck at predictable intervals, but you can be fired from a traditional job. Gig workers, to a large extent, work for themselves.

Advice For Gig Workers

Lesson No. 1: Open and fund an IRA.
Ritter said, “Millennials need to step up and take more control over their own retirement savings. Extend your control to your retirement savings by putting more money into an account with your name on it. That way, you own it, you decide how to invest it.” And as you switch traditional jobs or add or subtract side hustles, an IRA remains under your ownership.

Lesson No. 2: “Make that IRA a Roth,” he said. “Put the maximum amount in and let it grow.” Decades later, your withdrawals will be tax-free.

Lesson No. 3: “The same advice goes for a 401(k) account if you have a traditional job. Put the maximum amount in, set that on autopilot and let it grow.” The matching contributions you’re likely to receive from your employer will turbocharge growth of your balance.
Side hustles differ from traditional jobs in another important way. The gender pay gap is smaller. Men in full-time-only traditional jobs earn 12% more than women in comparable positions, T. Rowe Price says, whereas among workers with any side hustle that gap is only 5%. That leads to one more lesson for workers:

Lesson No. 4: If your household has two wage earners, talk and strategize with the other person. “Have open discussions about where your incomes come from and how to save — how much to put into 401(k)s and IRAs,” Ritter said. You can even contribute to a nonworking spouse’s IRA under circumstances, Ritter points out.

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