Opinion May 10, 2016 | 9:12 am

Should you join the Gig Economy?

Today, our standard workday isn’t so standard anymore andwe’re talking more about "gigs" – alternative work arrangements thatoften depend on the latest technology and a desire to set one’s own scheduleand pay. However, the question is whether everyone plans for the reality of thework or the impact self-employment in any form can have on his or her long-termfinances.

Gig workers – a broad spectrum that includes temporary helpagency workers, on-call employees, contract company workers, independentcontractors and freelancers – were measured as a startling and growing economicforce in a March study by Harvard and Princeton researchers(https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_march_29_20165.pdf).According to their measurements, this diverse group of earners that made up10.1 percent of the workforce in February 2005 has grown to nearly 16 percentas of late 2015.

Anyone thinking about going into business in place of or inaddition to their day job should consider a planning period with the help of aqualified financial or tax expert. Major issues to cover include:

Consider qualified tax and financial advice. Switching togig work – even if you find lucrative contract work in your field – can be anenormous shock to your finances. Cash flow can be irregular, disrupting budgetsand long-term savings. It’s a good idea to get some qualified financial and taxadvice so you understand the changes you might face and to keep major financialgoals like retirement and college savings on track.

Setting up a business structure: While most gig economyparticipants settle on a sole proprietorship or some form of limited liabilitycompany (LLC) business structure,(https://www.sba.gov/starting-business/choose-your-business-structure) thechoice needs to be carefully considered based on your particular businessactivity, overall tax situation and other financial factors unique to you. Thisis probably one of the most important reasons to seek out qualified tax, legalor financial expertise – the level of personal or property risk inherent inyour choice might call for a structure that offers additional protection againstlawsuits or insurance claims.

Think carefully about your benefits… Unless you fit aparticular group exempt(https://www.healthcare.gov/health-coverage-exemptions/exemptions-from-the-fee/)from the Patient Protection and Affordable Care Act or are insured by a spouseor partner, you’ll have to invest in healthcare insurance for yourself orconsider the cost of being uninsured. This is a particularly important expenseto plan in advance based on your health needs and the type of affordablecoverage that’s available. Get referrals on qualified health insurance agentsto get a full range of choices. And most of all, make a plan to keep saving andinvesting your money for long-term goals. Walking away from a weekly check can makethat process tougher – talk about it and plan for it.

Track your spending and planning carefully. If you don’tbudget or track your expenses now, it’s time to start. Being in businessentitles you to certain deductions for home office expenses, equipment andother costs related to your work. So whether you use a specific softwareprogram or a computer spreadsheet or paper and pen to track your expenses, doso regularly to avoid missing items that could eventually save you money. Ifyou’re working with a tax professional or financial planner, coordinate thisrecordkeeping with the work they’re doing for you. Also keep a constantdiscussion going about saving for the future, including retirement.

Make sure you’re really right for this. With proper planning,the gig economy can be both enjoyable and challenging. You’ll not only learnwhether you can support yourself, but also whether you’ll enjoy doing itlong-term. Many of us dream of being our own boss, but reality can be verydifferent, particularly when managing uneven earnings and cash flow common tomany new companies. It’s not just about business; it’s about whether yourlifestyle and personality traits(https://hbr.org/2010/02/should-you-be-an-entrepreneur) make you right foroperating a business in this economy – or any economy.

Bottom line: Plenty of people find themselves dealingeither by choice or necessity with the brave new world of "gig" work.It’s important to approach it as a financial and lifestyle decision on par withstarting a business.

Nathaniel Sillin directs Visa’s financial educationprograms. To follow Practical Money Skills on Twitter:www.twitter.com/PracticalMoney.

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