Whether you're considering taking on a new part-time gig on top of your day job or are ready to kiss the rat race goodbye and jump headfirst into the gig economy, you may be wondering about whether your expectations of your new job and role are realistic. Often, both the benefits and potential drawbacks of short-term or freelance work can be overstated by those who have had experiences that are outside the norm.
By reading from a wide range of self-employment resources before going full-bore into your next gig, you'll have a better idea of what to expect and how to prepare yourself. Read on to learn about the most common and widespread pros and cons of working in the gig economy.
Pros of Gig Work
Self-employment can bring with it a number of benefits. Some of these include:
- You're Regularly Presented With New, Challenging Tasks. Studies have shown that maintaining a certain level of mental "strain" by tackling new tasks can keep your brain healthy. Unlike some jobs, which can become so routine you can nearly do them in your sleep, gig work will nearly always present you with new situations and challenges that force you to think on your feet, thereby keeping you sharp.
- You Can Work As Much – Or As Little – As You Want. Self-employment can provide you with a level of flexibility that's simply not found in full-time or W2 employment. Even fairly lenient jobs that offer weeks of paid vacation or personal time every year won't let you dictate your working hours and workload the way independent contracting arrangements do. For many, this flexibility is highly valued. Whether you need to hit a certain financial target for the next few months to fund a family vacation or would like to step back and take a few weeks off while recovering from a serious illness or medical procedure, freelancing and self-employment can help you make it happen without requiring pre-approval to drop off the radar.
- You Can Give Yourself Raises. Whether it's pricing out a particularly difficult customer to avoid having to deal with follow-up requests or simply raising your per-hour or per-job rate, you'll have the unique opportunity to give yourself a raise whenever you deem it appropriate.
Cons of Gig Work
While these benefits of freelance work are valuable ones, there are some potential drawbacks that can affect a wide swath of self-employed individuals as well. These "cons" include:
- No Health Insurance or Fringe Benefits. Although the Affordable Care Act (ACA) has presented workers with the opportunity to buy health insurance through their state or federal exchanges rather than relying on employer-paid insurance, for many, the insurance policies available through the ACA remain unaffordable. Investigating your healthcare and insurance options before pursuing full-time gig work is crucial to assessing your own needs.
- No Work = No Pay. Even if you tend not to use your former employer's sick or vacation days to take much time off work, giving up the prospect of paid time off in lieu of freelancing can sometimes present a financial challenge. If you're unable to work for a few weeks, or if work dries up during a slow time of year, you could find yourself without an income.
Whether a gig job lifestyle is a choice or a trap depends on each person's financial goals and risk tolerance.
