Gig workers are more financially savvy than you think

When each new gig assignment brings with it an additional paycheck – and lack of work can wreck one’s monthly budget – gig workers can get pretty adept at tracking their finances, according to the T. Rowe Price report, “2018 Financial Attitudes & Behaviors Toward the Gig Economy.”

T. Rowe Price surveyed 800 adults, and found that, while gig and traditional workers report similar levels of income, gig workers are more likely to be proactive with their finances than traditional workers. Indeed, 78 percent of gig workers consider themselves more involved in their personal finances as a result of participating in the gig economy.

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Thirty-nine percent of gig workers report checking their accounts more regularly, 32 percent are more on top of their bills, and 23 percent are more “hands on” with their individual investment accounts since joining the gig economy. Among respondents with investable assets outside of an employer-sponsored retirement plan, 60 percent of workers in the gig economy report managing their own investments compared to 50 percent of those traditionally employed.

“Individuals participating in the gig economy are generally perceived as less financially stable, but it’s really encouraging to see that they are building similar levels of income as traditional workers,” says Stuart Ritter, senior financial planner at T. Rowe Price. “This may suggest that gig work offers an opportunity for workers to reach their financial goals.”

Additional findings of the survey include:

– Twenty-five percent of survey respondents participated in the gig economy either full- or part-time at the time of the survey, with 68 percent participating as a choice and not out of necessity. – The gig economy may be closing the employment gap for men and women. Based on survey responses, men led women in traditional full-time employment, with a 12-point difference, whereas the gap was smaller with a five-point difference between men and women working in the gig economy.

– Both gig and traditional workers consider their work satisfying. Eighty percent of gig workers are more likely to plan to continue working in some capacity after reaching retirement age, compared to 61 percent of traditional workers, with the majority of both gig and traditional workers stating they plan to continue to work because of personal satisfaction, versus a need to do so.

“We were also surprised to see that workers participating in the gig economy span all generations, despite the perception that gig work is exclusively a trend among younger individuals,” Ritter says. “The gig economy seems to fulfill differing financial needs based on life stage, with younger workers using the income to cover daily costs and older participants applying the income toward their approaching retirement.”

Among the range of gig workers:

– Older respondents participating in the gig economy were more likely to be motivated by work/life balance and less about money, with baby boomers twice as likely to participate for this reason compared to other generations.

– Generation X shows the highest rate of gig economy work participation. Thirty-two percent of Gen Xers work independently in some capacity, compared to 18 percent of millennials and 26 percent of baby boomers.

– Millennials are less likely to view traditional work as secure. Twenty-six percent of millennials feel the gig economy offers more job security than traditional work, higher than both Gen Xers (18 percent) and baby boomers (15 percent).

Among survey respondents, baby boomers expressed the most positive feelings about the gig economy. Baby boomers associated words such as “free,” “independent,” and “empowered” when describing how the gig economy makes them feel, more often than Gen Xers and millennials. However, a higher percentage of baby boomers are more likely to enter the gig economy out of necessity — 43 percent — versus 23 percent of millennials and 33 percent of Gen Xers.