To Her Credit offers targeted advice about personal finance based on unique challenges faced by women. It is authored by women with different financial backgrounds, dedicated to encouraging empowerment through financial literacy.
The pandemic has been painful for everyone, but women have taken the biggest financial hit.
As of February 1, women held 5.3 million fewer jobs than they did in February of 2020, according to the Institute for Women’s Policy Research. Men have lost jobs too, but not as many: Men held 4.6 million fewer jobs in February than the year before.
Women of color have been slammed particularly hard. In fact, Black and Hispanic women are 67% and 73%, respectively, more likely to be unemployed than white women.
An analysis by Gallup found that there are two major reasons women have been having a tough time. First, women are overrepresented in jobs that were eliminated due to pandemic-related shutdowns, such as those in the personal care or restaurant industries. Women also tend to be the caregivers in their families, and some have had to leave jobs to take care of children who have been attending school virtually because of the pandemic.
Since family responsibilities won’t lessen as the world moves out of the pandemic, flexible work arrangements will be key to women’s recovery in the job market, experts say.
“Flexible working conditions could be a great asset for women in this economy,” says Stacie Haller, career counselor and expert at job seeker site ResumeBuilder.com. If women have the ability to work when it makes the most sense in their lives, that can only help in the large-scale financial recovery, she adds.
If you are seeking that flexibility – and the money that comes with it – consider expanding your search beyond traditional jobs and also consider the gig economy.
Building a career through gig work
Dionna Dorsey, a Washington, D.C.-based graphic designer and brand development strategist, felt the financial strain from the pandemic early on. By April 2020, she had noticed more than a 50% decline in client requests to her full-time design business, and it soon became apparent that she would need another way to make ends meet. Luckily, she had an option.
Back in 2014, Dorsey had launched an online store called District of Clothing, which sold t-shirts and other items with motivational messages. While District of Clothing was intended to be a side hustle that brought in passive income, during the pandemic, it became Dorsey’s main moneymaker.
See related: Making it as a female entrepreneur
“If 2020 has taught us anything, it’s that you don’t know what is coming tomorrow and we, as women, have to take steps to try to protect ourselves financially as much as we possibly can,” Dorsey says. “Having multiple streams of income not only allowed me to continue moving forward and contribute to my household, but it gave me a sense of peace.”
Making the most of the gig economy
Gig work allows women to create multiple streams of income rather than relying on one company for all of their earnings. Not only that, but it allows women to work as much – or as little – as they want. That means income potential has no limit; if you are willing to put in the work, you can reap the rewards.
Since many gigs allow you to set your own schedule, you can work around childcare duties or even a full-time job.
“There’s an interesting and wide variety of jobs that can be done on part-time schedules or on a freelance basis to allow for more flexibility,” says Brie Weiler Reynolds, career development manager and coach at FlexJobs and Remote.co.
See related: Sexism in job hunting: How to get what you’re worth
When you are sifting through opportunities, consider your schedule, how much time you’ll have available to work and what type of work you would like – or not like – to do.
Among the more popular roles Weiler Reynolds sees listed at FlexJobs are writing and editing jobs, tutoring and instruction opportunities, and social media management gigs. Other common types of freelance and part-time opportunities include customer service, bookkeeping, business development and sales, administrative and virtual assistants, bilingual and translation services, and data entry, Weiler Reynolds adds.
Some companies have also made gig work easy to pick up for practically anyone. Uber and Lyft transformed the ridesharing industry, turning everyday people into taxi drivers. Meanwhile, companies like DoorDash and Instacart let women make money delivering meals and groceries.
If you are looking for domestic work, Care.com lets you pick up jobs offering caregiving services to others while TaskRabbit lets you get paid to do odd jobs around the house for those in your neighborhood.
Managing money in a gig economy
Finding work in the gig economy is only the first step. Managing the money you make is another thing entirely.
One of the biggest mistakes you can make is not treating your gig like a business, says Beverly Miller, a personal finance and small business coach in western Pennsylvania. “When you do gig work, you are an independent contractor and therefore a business owner, and you need to treat it that way,” Miller says.
Make sure you keep track of expenses and set aside enough money to pay taxes. An accountant can help you figure out how much you should be setting aside. It’s also a good idea to set up a separate business account, so you can keep your gig expenses separate from your personal expenses.
If you are out of work and contemplating doing gig work full time instead of looking for a full-time job, make sure you understand the financial risks.
“I would never recommend someone think about doing gig work full time if they have any debt other than their mortgage,” Miller says. However, Miller adds that “gig work is a great way to supplement regular job income and get out of debt.”
Miller also recommends ideally building an emergency fund of at least six months’ worth of household expenses in a liquid savings account before attempting to be a full-time gig worker.
Ultimately, the best decision for you will depend on your situation. For example, someone with a working spouse who makes good money and has a stable job can get by with less money saved than someone who is the sole breadwinner, Miller points out.
Cashflow can be a problem
If you do start depending primarily upon freelance and gig work, there is a major drawback to consider. Depending upon the types of opportunities you go after, you may not be able to depend on a steady paycheck. You may make a lot of money one month and a little money the next.
If you are doing work on a freelance basis, you may also have to chase invoices if the client does not pay on time.
Recognizing those possibilities and having a contingency plan in place can not only help you avoid stress, but it can keep you from falling into financial ruin.
Ideally, it’s best to have enough in savings to be able to withstand a slow month or a late invoice. In absolute emergencies, a credit card can be used to tide you over until a late payment comes in, but make sure you pay the entire balance off as soon as possible, so your gig lifestyle does not send you into debt.
Also, consider any costs that you may incur as a result of your gigs. For example, if you sell artwork on Etsy, factor in the costs of art supplies. If you drive for Uber, consider the cost of gas.
When it comes to buying supplies, you might be able to use a rewards card to your advantage – as long as you don’t carry a balance. For example, if you offer professional services to clients and buy business supplies regularly, a business rewards card might offer cash back on business purchases.
Overall, gig work can be a rewarding way to pad your bank account, whether you are between jobs, looking for multiple streams of income or thinking about building your own business.
“If you want the freedom that gig work provides, figure out what kind of business you could run that does give you complete control over all aspects of the business,” says Miller. “Gig work can support you while you make that happen.”