Forecasting. The Independent Worker's (or Gig Workers) Key to Building Wealth.

Bree Thomas

The rise of the independent worker.

There are 59 million+ independent workers (or gig workers, as some folks like to call them) in the US today. This group is growing 3x faster than the US workforce as a whole. They’ll be the new working majority by 2027. And honestly - we shouldn’t be surprised...cause “gig work” ain’t nothin’ new. It was common practice long before the likes of Uber and Upwork.

While it might seem that long-established ways of working are being disrupted, history shows us that the one person, one career model is a relatively recent phenomenon. Prior to industrialisation in the 19th century, most people worked multiple jobs to piece together a living.

Tawny Paul, The Conversation 2017

So why the hype now?

The Pandemic, the Great Resignation, Quiet Quitting, Rising Inflation and a Looming Recession to name a few. A dire chain of events for sure, but also a boon for the gig economy.

When you think about it, this pandemic has been the perfect storm for the gig economy. The first step was that people were forced to sit at home for months on end, this allowed them to see what their lives were like without their jobs and reconsider their options.
The second step that followed is that older people, Gen Xers and even some Boomers began dipping their feet into the gig-economy. This is notable because the majority of gig-workers had consisted on Millenials and Gen Zers.
The third and final step has been the great resignation, people have decided in droves to stick to their gig-work than return to their offices. Its been one thrilling and unexpected ride.

Dylan Ogline, Forbes 2022

Alanis said it best: “And Isn’t it ironic? Don’t you think?”

We realized our time was valuable in ways we were once too busy to recognize. A side-hustle could become the hustle. Hell, we could quietly quit the hustle all together. We could re-prioritize, re-leverage, and re-configure the work in our life. We could define work-life balance outside the confines of a regular office, an 8am-5pm workday, or a Monday-Friday workweek. For many, it was a whole new lease on life. But let’s not glamorize it. Whether an independent worker out of necessity or choice, the struggle is real. The majority (70%) will tell you they choose to work gigs for the independence. They want control over their time and work-life balance. Here’s the irony — those two things (time & work-life balance) are threatened by their primary stressor — money. Or rather, the inability to predict when money is going to be an issue.

With flexibility comes great responsibility.

We all have flexibility in what we spend. As an independent worker, you have the added flexibility in what you earn — dialing up or down on your gigs, shifts, appointments, projects, jobs. The independent worker adapts their time to maximize their money. You know how much a shift, an appointment, a project is going to earn. It’s how you update your day-to-day, build your schedules, and modify your budgeting in real-time. It’s a near constant financial diagnostic you run in your head. And because you’re running it in your head, it’s only reliable in about 2-week increments. Anything longer and you have to resort to paper (or spreadsheets) to figure out your money.

When you can’t plan farther than the couple weeks in your head, it fuels a reactive (think “feast or famine”) financial cycle rather than a proactive financial cycle.

Budgeting is only half the equation.

Budgeting is an important skill. We should all know how to live within our means. But if you’re an independent worker, it’s only half the equation. Traditional budgeting will tell you to plan out every dollar and stick to that plan. But if you work gigs, your plan is always changing. You need to look forward. So you can spot money issues (or opportunities) on the horizon, and adjust accordingly. For you, time is money, and your schedule dictates both. You run scenarios, against your calendar, to answer questions like:  

  • Should you pick up those extra shifts, projects, appointments?
  • Can you take that vacation?
  • Are you on track to weather a downturn?

You forecast. All the time. Because you have to.

I was chatting with a bartender I met recently, Scott, who works in the mountain towns of Colorado. He was kind enough to entertain questions about how he plans for future expenses. Here are the highlights:

  • Scott knew about how much money he was going to make that day.
  • He could also tell me his average earnings by season (big swings in summer v. winter)
  • He works at more than one bar to maximize (and diversify) his earnings.
  • There were three “windfall” holidays in the year where he made the most money. He would leverage those periods to plan for his largest expenses that year, and of course never took time off during those holidays.
  • He averages a little over 100K per year income.
  • He keeps track of his money on paper and the occasional spreadsheet.

Scott takes advantage of the ebbs and flows of his work by looking forward, not by simply sticking to the same monthly spending plan.

Why forecasting wins.

If you’re an independent worker, you already do it. You make smart bets. You estimate right time/right place. You know when to hold and when to fold. You know looking forward is how you make the most of today. It isn’t about certainty for you. It’s about visibility. It’s about embracing a margin of error that helps you plan your next best move. And if that move doesn’t go as planned, you need to quickly reassess the next best move after that. You are not scared of change, because you strive to be three options ahead. You’re super-power is in being adaptable. And your secret weapon is getting in front of the uncertainty.

The most important part of every plan is planning on your plan not going according to plan.

— Morgan Housel, The Psychology of Money

So what’s missing?

There are plenty of tools out there to help the salaried worker budget. And a number of tools that help the independent worker track their day-to-day expenses and run their micro businesses. At Balance, we’re building tools to help you — the independent (or gig) worker forecast. Forecast farther and with more options. With Balance, you’ll be able to forecast endless scenarios based on any number of inputs you control (shifts you can pick up, overtime you can earn, credit card terms you’re under, bank accounts you hold) — to find the right mix to achieve your goals.  We’re building tools that sit at the intersection of all the levers you, an independent (or gig) worker, can pull. Taking inputs from every aspect of your life and helping you instantly map the impact of today’s decisions on your financial future. We want to help you forecast more than next week’s schedule. We want to help you super-forecast building wealth for the rest of your life. On your terms.

If my calculations are correct, when this baby hits 88 miles per hour, you're gonna see some serious s***.

— Doc Brown, Back to the Future

doc-brown from back to the future movie

We hope you’ll join us on this ride. We’re building in public and we can’t do it without you.