Will all financial blunders 'cost' me money?
The most direct answer should be no, it will not always cost you in terms of your income or profit. But that is only on the surface until you realize it is costing you more than money!
Here are a few troubles which might follow if an independent contractor commits a financial mistake:
- Dispute with the gig platform over commissions charged
- Dispute with the customer over fare/delivery charges
- Inaccurate record of expenses
- Losing on tax deductions
But beyond losing on numbers you stand the chance of losing potential and efficiency in the long run in case some mistakes grow into habits!
How can I stop making such mistakes and maximize my income?
It is genuinely difficult for every gig worker to research the backgrounds and policies of the rideshare or delivery platform they are working with. Most of them are not full time independent contractors which makes it difficult to focus on just one type of gig.
Amidst all this confusing 'business terms' like compensation coverage, business vehicle registration, ABN and so on, it is usual to lose focus on the real-time efforts which you are putting in to earn money.
We found out some easily avoidable common mistakes that independent contractors usually make:
- If you are not regular with insurance premiums or do not update insurance plans on time, it is a big financial red flag!
- You will definitely lose opportunities of maximizing your savings if you neglect recording small receipts, under $70.
- Not separating business expenses from personal expenses
- Not keeping an organized back-up for your log-book
- Not being regular in tracking your mileage
If you’d like to go the extra mile and make financial resolutions to secure your income we are sure you will love our insider podcast on some Hot Tips to Financial resilience in gig work.
Effects and consequences if you get habituated to these mistakes
Some of these might seem unnecessary costs to cover but the banking firms that come up with the policies, rules and influence the laws would like you to think otherwise.
Not updating your insurance plan from time to time will:
- Increase your chances of missing out on better coverage and benefits
- Remove facilities available in your former package
- Charge you extra for renewal
- Have adverse effect on your savings in case you haven't claimed any insurance money yet
Similarly not tracking expenses and mileage daily will cause you to:
- Lose sight of your financial goal
- Face difficulty in recognizing a profit or loss situation
- Not be eligible for accurate tax returns
- Minimize your business savings
Overcoming these financial obstacles, increasing your income and stabilizing your earnings are all related
There are several solutions to these mishaps. But it can be confusing as well to put time and effort into understanding methods than to just give 100% to your job.
The easiest way to start eliminating these problems is to figure out what works best for you. Fix a certain period of time and work toward a financial goal set for this time. Having a weekly/monthly financial goal can help you:
- Be aware of your income-expense ratio
- Become conscious about the possible mistakes
- Take further steps to grow the goal amount
- Have a forecast of how much you will be able to save
Which tools can I use to minimize the risk of these blunders?
It's simple to detect the key factors affected by these common issues: income and expense, maintenance and taxation.
The possible solutions to safeguard these would be budgeting, insuring and tracking!
Here's a list of some amazing tools and websites available on the internet to help you dodge the blunders:
Or boost your income by 2X with a one stop solution for all these challenges!
When you download the MyGigsters app you upgrade to a redefined level of smart driving. You can auto-track your income, expense, business receipts and mileage with one tap! All of this information is securely stored and organized for future use, especially generating tax reports.
We believe in creating a financially independent community of gig workers who are secured in their profession- monetarily, physically and mentally.
We constantly strive to introduce user perks which boost your extra income and help you save more. With your support we hope to build a better interface soon that has in-built SOS signaling to keep you safe from abuse or robbery, more direct cost saving features, real-time traffic tracking and many such smart tools.
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