Side Hustle Success: 5 Financial Tips for Freelancers and Gig Economy Workers

Admin • August 25, 2023

The freelance and gig economy certainly has many attractive benefits. Many people want or need to supplement their primary income, others crave flexibility and variety, and some don’t want to be tied to a single physical location or the same schedule every day. Approximately 16% of the American workforce is comprised of gig workers with nearly half of gig workers also holding full-time jobs.

The high earning potential and ability to be your own boss lure many people into the freelance and gig economy world. But it’s important to remember and be prepared for the challenges that come with this type of work such as lack of insurance, differences in tax reporting, and irregular income. 

 

5 Financial Tips for Freelancers and Gig Economy Workers

With sufficient financial knowledge and self-discipline, you can be successful as a freelancer and accomplish your goals. Understanding these five concepts can help you start on the right foot. 

  1. You should diversify your income options. 
  2. You need to know your worth. 
  3. Become a master of your tax responsibilities. 
  4. Learn how to manage your fluctuating income. 
  5. Insure yourself today and invest in your future. 

These tips, along with regular and comprehensive financial planning will help you navigate the amazing world of side hustles, freelancing, and the gig economy. 

 

1. You should diversify your income options.

Finding success as a freelancer, especially when you freelance full-time, often takes a variety of skills. For example, if you work online as a virtual assistant, it’s best to be familiar with all the major bookkeeping software and customer relationship management (CRM) programs, as well as have strong communication and social media skills. Ensuring you’re the “complete package” will make you more marketable and valuable. 

It’s also important to diversify your skills and talents because freelance work can often be volatile. If your work is suddenly no longer needed with one client or platform, you’ll need to quickly pivot and find a new opportunity. Having a variety of skills under your belt will help decrease the amount of time you’re out of work. 

Take some time to research the services that are most in need and commit to learning them through online workshops, reading articles, or watching tutorials. As you continue working in the gig economy, never stop learning, increasing your skills, and adapting to the ever-changing landscape. 

 

2. You need to know your worth. 

Pricing yourself correctly as a freelancer is an extremely important part of being financially successful. Price yourself too high and you may find your inbox empty. Price yourself too low and you sell yourself short. There are many strategies you can use to discover your worth and price yourself: 

  • Discover what other freelancers are charging for similar services (remember, your specific experience and positive references will be a major factor in your worth and prices as a freelancer). 
  • Think about the expenses you will incur in your freelance work (including taxes!). 
  • Determine if you’ll charge an hourly rate or a project rate.
  • Think about the worth you are providing your clients. Oftentimes, your work is providing clients with intangible value and those benefits should not be overlooked. 
  • Pricing your goods and services is not a one-time task, you’ll want to continually evaluate your prices as your skills, experience, and expenses increase. 

 

3. Become a master of your tax responsibilities.

Freelancers and gig economy workers have to pay special attention to their taxes. Instead of the traditional W2 tax form, you will receive a 1099-NEC form from every client you worked for throughout the year. 

As a freelancer, you are responsible for paying self-employment tax (15.3%) as well as your standard income tax. Typically, your employer would pay for half of your Social Security and Medicare taxes, but as a freelance worker, you’re responsible for the entire portion. 

If you expect to owe more than $1,000 in taxes in any given year, you must pay part of your tax bill quarterly. You can use IRS Form 1040-ES to estimate how much you should pay for each quarterly tax payment. Some states also require freelancers to pay quarterly state income taxes. 

Because freelancers typically incur expenses that typical W2 employees don’t (for example, if a W2 employee needs a phone to perform their job duties, one is typically issued and paid for by the employer), they can claim tax deductions . 

Typical freelancer tax deductions include home office supplies, business-related meals and travel, required equipment, phone, and Internet services, certifications, and more. These deductions can drastically help reduce your tax liability, just ensure they are legitimate and properly documented. 

Because self-employed taxes can be so nuanced, it can be wise to hire a tax professional. They will be able to advise you on your quarterly tax payments, business structures, and tax deductions. 

 

4. Learn how to manage your fluctuating income. 

Irregular income can be challenging to budget, but it’s not impossible! Follow these guidelines to start your freelance budget today: 

  • Start by looking at your monthly expenses and determine what you need to earn every month to cover your essentials. 
  • If you don’t have one already, make a plan to build up an emergency fund to cover you for slower income seasons. 
  • Average your monthly income and create spending allowances for non-essential expenses. Allow yourself to spend money on fun items and experiences within reason. 
  • Use higher-earner months to fund your bigger goals. After knowing what you need to earn to cover your essentials and even a few non-essential expenses, you can save and invest any extra income for non-monthly expenses like a vacation or down payment on a home. 
  • Keep detailed records of your business expenses—this will save you money and time during tax season.
  • Always overestimate your expenses and underestimate your income. 

And while we’re on the topic of getting income, invoice management is a skill you will want to master, regardless of the field you’re in. Here are some tips to get you started: 

  • Request a deposit before starting work on a project. 
  • Automate your invoicing and ask consistent clients to sign-up for automatic payments. 
  • Be clear about your payment terms and don’t be afraid to tack on late-payment fees. 
  • Keep records of all invoices. 

It’s solely your responsibility to make sure you get paid. By having automatic, professional systems in place, this process can become streamlined and easy to manage. 

 

5. Insure yourself today and invest in your future. 

Health insurance is often offered at a free or reduced rate from W2 employers, but as a freelancer, it’s up to you to secure your own health insurance plan. You can apply for coverage through Health Insurance Marketplace and thankfully, your premiums are tax-deductible ! You don’t want an unexpected medical expense to derail your financial freelancing progress. 

Retirement contributions through paycheck deductions are common with W2 contracts as well. As a freelancer, you’ll want to ensure you’re not putting off your retirement contributions. You can contribute to a: 

Before committing to a certain retirement plan, take time to understand the contribution limits, withdrawal rules, and tax implications so you can choose the best option for your financial situation. 

Navigate the Gig Economy with Five Pine Wealth Management

At Five Pine Wealth Management , we can help you navigate your various income sources while providing you with comprehensive retirement, investment, tax, and goal-planning advice. Whether you are a full-time freelancer or supplementing your primary income, you want to ensure you’re using your money in the most strategic way possible. 

To see how we can help you today, email us at info@fivepinewealth.com or give us a call at 877.333.1015. We can’t wait to hear from you! 

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When Saving Money Starts Getting in the Way of Living

May 21, 2026
Key Takeaways Saving money is important, but constantly postponing meaningful experiences can leave you financially secure and personally unfulfilled. Fear, habit, and identity often play a bigger role in spending decisions than numbers do. A healthy financial plan should support both your future security and your ability to enjoy life along the way. Imagine you’ve saved diligently for decades. You have a healthy income, growing retirement accounts, manageable debt, and investment balances that continue climbing year after year. Yet, somewhere in the back of your mind, a voice keeps saying, “Not enough.” So you hold off on the vacation or skip the kitchen renovation. You tell yourself you will spend more freely later, once things feel more certain. You keep asking yourself the same question, “Can we really afford this?” Sometimes the answer is yes by every objective financial measure, but emotionally, it still feels uncomfortable. For years, personal finance advice has focused heavily on the dangers of overspending. Save more. Spend less. Delay gratification. Avoid lifestyle creep. That advice absolutely matters. Many people would benefit from stronger saving habits. But there is another side of the equation that does not get discussed enough. Some people become so good at saving that they forget what the money was for in the first place. Am I Saving Too Much?  This question sounds almost absurd, and many people feel uncomfortable asking it. In our culture, saving is viewed as responsible and disciplined. Spending often gets framed as careless or indulgent. So when someone continues accumulating wealth year after year, nobody really raises concerns. But over-saving can create its own problems. We have worked with people who consistently save large percentages of their income while postponing almost everything meaningful to them. They delay vacations. Put hobbies on hold. Continue working in stressful jobs long after they financially need to. They keep waiting for some future point where they will finally feel safe enough to enjoy what they built. The challenge is that “enough” can become a moving target. As portfolios grow, lifestyles usually grow too. Concerns about inflation, healthcare costs, market volatility, taxes, and longevity all start competing for attention. Even financially successful people can develop a persistent fear that one wrong decision could jeopardize everything. That fear is often emotional rather than mathematical. In many cases, the numbers support far more flexibility than the person believes. The Psychology of Saving Money Saving behavior is deeply tied to emotion, identity, and the stories we tell ourselves about security. Understanding why you save the way you do is the first step toward making more intentional choices. Fear of running out is one of the most powerful drivers. Even people with substantial assets can feel that their wealth is fragile, particularly if they grew up without financial stability or lived through a major market downturn. The brain tends to overweigh dramatic losses compared to equivalent gains, which means the emotional pain of imagining a depleted account is often disproportionate to the actual probability of it happening. Habit reinforcement plays a significant role as well. If you spent 30 years in accumulation mode, consistently saving and reinvesting and growing, your financial behaviors became deeply ingrained. Transitioning from saving to spending, even intentionally, and when the numbers support it, can feel wrong at a gut level. The habits that built your wealth can work against you when the time comes to use it. Societal pressure adds another layer. High-earning professionals are often surrounded by messages that equate financial discipline with virtue. Spending on yourself can feel indulgent or even irresponsible, even when it’s neither. There is a difference between careless spending and deliberate investment in your own well-being, but the cultural script often blurs that line. For business owners and dual-income households, there is also the identity piece. When so much of your sense of self is tied to building, growing, and accumulating, shifting toward enjoyment requires a genuine psychological reorientation, not just a new budget line. Values-Based Spending Over-saving isn't fixed by spending more randomly. What actually helps is spending with intention — putting money toward things that genuinely matter to you. This is what we mean by values-based spending : aligning how money flows with what you care about. The exercise starts with a conversation about what you want your life to look like. Not the life you think you should want, and not the life your parents had or your colleagues' project, but the experiences, relationships, contributions, and comforts that would make your days feel meaningful and full. From there, a good financial plan becomes a permission structure. When your advisor can show you, concretely, that your goals are funded and your risks are managed, spending stops feeling like a threat to your security. It starts feeling like money doing what money is supposed to do. Values-based spending also helps you stop spending on things that don’t matter to you. Many high earners discover that their default expenditures have drifted away from their priorities over time. Redirecting those dollars toward what genuinely matters often feels better than a raw increase in spending. Signs You May Be Under-Living Financially A few patterns tend to show up repeatedly among chronic oversavers: You feel guilty spending money even after careful planning. Your savings goals continue increasing without a clear reason. You postpone experiences you deeply want because you “might” need the money someday. You struggle to define what financial freedom would look like for you. Your net worth keeps growing, but your day-to-day life feels largely unchanged. You continue working at a pace that negatively impacts your health or relationships, despite already being financially secure. None of these automatically means you are saving too much. But they are often signals worth examining more closely. Practical Steps to Align Your Money With Your Life Making the shift from over-saving to purposeful living does not require a dramatic overhaul. It starts with a few honest conversations and a willingness to examine some long-held assumptions. Start by revisiting your retirement projections with a financial advisor. Ask specifically what your models say about your ability to spend, not just your ability to accumulate. Many clients are surprised to find that their plan supports significantly more lifestyle spending than they had assumed. Build a "permission budget" for discretionary spending. This is not a ceiling on enjoyment but a deliberate allocation toward experiences and priorities you have identified as meaningful. Giving yourself explicit permission to spend in certain areas, backed by a sound financial plan, reduces the guilt that often accompanies even well-deserved expenditures. Consider what you are waiting for. If the answer is a number that keeps moving, or a level of certainty that financial markets will never provide, it’s worth exploring whether the hesitation is financial or psychological. A good advisor can help you separate the two. A Healthy Financial Plan Should Support Your Life A strong financial plan should create confidence, not permanent deprivation. Saving diligently is important, but there is also value in recognizing when enough may already be enough. The goal is for your spending to reflect your values, your priorities, and where you are in life right now. Because eventually, there has to be a point where the money begins serving you instead of the other way around. If you’ve been wondering whether your saving habits still align with the life you want to live, we’d love to help you think through it. At Five Pine Wealth Management , we help clients build financial plans that support both long-term security and meaningful living today. Call us at 877.333.1015 or email us at info@fivepinewealth.com to start the conversation. Frequently Asked Questions (FAQs) Q: Why do I feel anxious spending money even when I can afford it? A: Spending anxiety is often tied to the psychology of saving money. Past financial stress, market downturns, family experiences, and years of disciplined saving can condition people to associate spending with risk, even when their financial plan supports it. Q: Can over-saving negatively affect your quality of life? A: Yes. Constantly delaying travel, hobbies, family experiences, or personal goals in pursuit of “more” can lead to burnout, stress, and missed opportunities. Financial security matters, but so does enjoying the life your money was meant to support.

What's Inside Your 457? (And Why It Matters More Than You Think)

April 30, 2026
Key Takeaways Your 457 should work alongside your pension to support your overall retirement income plan. Many 457 plans are set on autopilot, but your investments shouldn’t stay that way as you near retirement. Understanding what you're invested in helps you make better decisions when markets move. Turning 50 is your signal to review your 457 more closely so you can check your contributions, risk level, and how it fits with your pension before retirement gets too close. Like many first responders in Washington and Idaho, you probably have a pretty solid grasp of your "Plan A." Between the WA LEOFF Plan 2 or ID PERSI, you’ve spent your career earning a guaranteed monthly pension. It’s the foundation of your retirement — the steady paycheck that arrives regardless of what the stock market does. But then there’s that "other" account. The one you’ve been tucking money into every pay period through deferred compensation. In Washington, it’s usually the Washington State Deferred Compensation Program (WSDCP); in Idaho, it’s often the State of Idaho 457(b) Plan. When we sit down with firefighters and police officers who are within 10 years of their "end of watch" date, they usually know two things about this account: how much is in it and that they’re glad they started it. But when we ask, 'What is that money actually doing?' — that question usually gets a pause. If you’re 50 or older, it’s time to move past the "set it and forget it" mentality. Let’s take a look at how your 457 works and how to make sure it’s working for you. 457 Plan Investment Options  Unlike your pension, which is managed by the state, your 457 is a “defined contribution” plan. That means the outcome depends entirely on how much you put in and how those funds are invested. A 457 plan is just a container. Think of it like a toolbox. What matters is what’s inside the box. Your account isn’t sitting in cash (at least it shouldn’t be). It’s invested in a mix of underlying funds, usually including: Stock funds (equities): These are your growth engines. They tend to go up over time, but they can be volatile. These could be U.S. stock funds or international funds. Bond funds (fixed income): These provide stability and income, but with historically reduced long-term returns. Stable value or cash equivalents: Lower risk, but also lower growth. Most public service 457 plans in the Northwest offer a menu of these options. Some people choose to build their own mix, while others choose a single “all-in-one” fund and let it do the work. This brings us to the most common choice we see… What is a Target-Date Fund? A Target-Date Fund (TDF) is designed to be a one-stop shop. The “date” in the name is the year the fund assumes you will retire. If you plan to hang up the uniform in 2030, you’d likely be in a 2030 fund. A TDF automatically shifts its risk level as you get closer to that date. This is called the glide path . When you are 20 years away from retirement, the fund is aggressive. It buys mostly stocks because you have time to recover from market crashes. As you get closer to the target year, the fund manager automatically “glides” the investments away from risky stocks and into “safer” bonds and cash. TDFs are built for the “average” American worker who relies solely on Social Security and a 401(k), but you aren’t the average worker. You have a LEOFF or PERSI pension. Because your pension acts like a “super bond” (stable, guaranteed income), being too conservative in your 457 might hinder your growth. Conversely, if you’re planning to retire at 53 (common for LEOFF 2) but your fund is target age 65, you might be taking way more risk than you realize. It’s also important to note that two funds with the same year, for example, 2035, can have very different levels of risk depending on the provider. One may still hold 60% in stocks near retirement, while another might be closer to 40%. How Risk Changes as Retirement Approaches In your 20s, 30s, and even early 40s, “risk” is your friend. Risk is what grows a $50,000 account into a $500,000 account. However, as you approach the age of 50, the definition of risk changes. That’s because you’re entering what we call the “retirement red zone,” roughly five years before and five years after your retirement date. This is when: Your portfolio is at its largest You have less time to recover from downturns You may soon rely on the money for income We look at two specific types of risk for our clients: Sequence of Returns Risk: The risk that a market crash occurs just as you start taking withdrawals. If the market drops 20% the year you retire, and you start pulling money out to travel or pay off the mortgage, your account may never recover. Inflation Risk: If you get scared and move everything into the “Fixed Account” or “Stable Value Fund,” you might not lose money, but you’ll lose purchasing power. If your account earns 2% but the cost of living goes up by 4%, you’re technically getting poorer every year. Finding the “Goldilocks” zone — not too hot, not too cold — is the primary job of a pre-retiree. The Age 50 Checklist Once you’re in your 50s, it’s time to stop running on autopilot and take a closer look at your 457. Check Your “Catch-Up” Options In 2026, the standard 457 contribution limit is $24,500; however, once you’re 50, you can add an extra $8,000 in “Age 50 Catch Up” contributions. Even better, if you're within three years of your normal retirement age and haven’t maxed out your contributions in previous years, you may be able to contribute up to double the normal limit ($49,000). This is a massive boost for your savings. Diversify Your Tax Buckets Most first responders have their money in a Traditional 457, meaning you get a tax break now but pay taxes when you take the money out. Both Washington and Idaho offer Roth 457 options. With a Roth, you pay the tax today, but the money grows and comes out tax-free. For high-earners who expect their pension to keep them in a higher tax bracket during retirement, having a “tax-free” bucket of money can be helpful. Coordinate With Your Pension If your LEOFF or PERSI pension covers 70% of your needed income, your 457 can afford to be a bit more aggressive in fighting inflation. If you plan to use your 457 to bridge the gap until you collect Social Security, that money needs to be protected differently. Let’s Take a Look Together At Five Pine Wealth Management, we work with first responders in Washington and Idaho who are approaching retirement and want clarity around their financial picture. We understand how LEOFF Plan 2 and PERSI fit into the bigger picture, and how your 457 can support the retirement you’ve worked hard to build. If you’d like help understanding what you’re invested in, we’d be happy to take a look with you. You can email or call us at 877.333.1015 to schedule. We’d welcome the conversation. You’ve spent your career looking out for the community; let us help you look out for your future. Frequently Asked Questions (FAQs) Q: Is a Target-Date Fund enough for my 457 plan? A: For many people, it is, but as you get closer to retirement, it’s important to review whether the fund’s risk level matches your timeline and overall financial picture. Q: Is there a penalty for taking money out before age 59½? A: No. Unlike a 401(k), the 457 plan has no 10% early withdrawal penalty if you leave your employer, making it an ideal tool for first responders retiring in their early 50s. Q: Should I choose a Target-Date Fund or build my own portfolio in a 457? A: Target-date funds offer simplicity, but building your own portfolio allows for more customization. If you have a pension that already provides a stable income, building your own could be a good option.