The gig economy as its referred to is all about freelance working on a job or gig basis. It is sometimes synonymous with though not quite the same thing as running a business. Gig economy workers have key considerations in terms of finance that are specific to the way they work and how their money comes. First, we will discuss the difference between gig work and running a business, then talk about some of the characteristics that give gig work it’s own financial considerations and finally a few finance tips to help smooth things.

Gig economy or running a business?

We’ve all embellished a little when asked and said we run a business when what we run is ourselves. One of my favourite definitions of business is “a system of processes that work towards a profit motive”. The true test here is how well your “business” survives without you.  If your absence leads to income dwindling you are pretty much self-employed or a gig economy worker. Nothing wrong with that. So you will find a lot of creatives, freelancers and tradespeople fall into this category.

Financial idiosyncrasies

We’ve already discussed one of the characteristics that make gig economy workers vulnerable financially; no work, no pay. Covid-19 has put people through a lot and once again gig economy workers were exposed financially when lockdown became the answer to the world’s scariest problem. To date, it is difficult to estimate just how much in potential revenue has been lost due to the events of 2020. Irregular incomes are not so bad in themself, what makes them bad is the regular expenditure that gig workers incur on both the personal and business front. These expenses must be met. So we have what those in finance and accounting would call matching problem. How do we manage regular expenses with irregular incomes?

Divide all income

There are many different expressions of this but for this discussion, we will use the pots method. Remember this is about your circumstances and they will expectedly differ from others. So you may want to use more pots if that works for you. When you receive income for a job it is important to have a system that distributes money across your goals. Say you have goals to save for the short term, invest for the long term and of course eat now. Let’s add to that your insurance (more on this later) and regular payments like subscriptions for subscriptions for services you use for earning income. The moment you receive income it is best to split it into 5 pots. The fifth pot is of course for tax. This works great if you have defined percentages such as 10% for saving (short term), 10% for investing (long term), 20% for subscriptions, 10% for your various insurance products, 10% for tax (this depends on tax rules in your industry) and the remaining 40% is what you live on. This is not easy to institute but is it worth it.


You’ll notice that I put both savings and investment there as opposed to grouping them as many will often do. There’s a reason for this. Investment is for your long term, this is money you put into shares or some other long term investment vehicle. Savings are akin to an emergency fund or short term facility you can use when the on-hand cash is low. You can put this money in an investment product but you need something ultra-low risk and with the economy we live in, something that beats inflation. You can also draw on this for working capital though it may be advisable to set up a separate fund for it. Savings are key because of irregular income. They allow you to maintain a semblance of normalcy at a time when the money may not be coming in.


It is those who can least afford insurance that needs it the most. Again the irregular income plays a big part in this. Medical aid and a burial plan are the most popular versions of insurance available in Zimbabwe. Life policies may also be a good idea if within your reach. Insurance policies on your belongings may also be beneficial to you. An important thing to remember is that many insurance policies lapse automatically if there are 3 consecutive months of non-payment. Check your insurance contract. It is, therefore, a good idea for those with irregular income to keep your insurance policies paid up well in advance.

Understand working capital

Working capital in simple terms is the money you have on hand to finance your operations. Working capital also includes the money owed to you by customers less the money you owe to your suppliers. Two things should jump at you there; the sooner you get what is owed to you the better and you will need money on hand to finance things. While the market determines a lot it is wise to ask for an upfront payment when commencing a job. Asking for the full amount may be a bit much if you don’t have the leverage but it is customary to ask for 20% – 50% upfront with the remainder paid upon delivering the finished job. This is recommended for two reasons, firstly it shows a client that is willing and able to pay and secondly takes the burden of financing the gig of your wallet.

Simple yet effective principles for gig economy workers to follow. If 2020 has taught us anything it’s that things can change very quickly we must always stand prepared.