Improving the way you manage your finances is one of the best ways to prevent your side hustle from morphing into a side nuisance.
Making money through extracurricular activities is not a novel idea by any stretch of the imagination. People have been known to launch enterprises, engage in freelancing and moonlighting, take on many jobs, and put in long hours in order to stay afloat for many years.
But now, a number of factors have contributed to a super-surge in the micro-entrepreneurial and side-gigging markets. This presents an undiscovered opportunity for a nation like South Africa, which is in dire need of economic reform, according to Prin Munsamy, the Solutions Actuary at Metropolitan GetUp.
The South African Freelance Economy is Thriving
It is believed that there are approximately 3.9 million side hustlers in South Africa at the moment, which is a number that is quickly expanding. The Stellenbosch Business School recently published its Global Entrepreneurship Monitor (GEM) study 2021/2022, which found a significant rise in premature entrepreneurial behavior among South Africans; the percentage jumped from 10.8% in 2019 to 17.5% in 2021.
According to Munsamy, “Pandemia-related jobs loss and lack of income drove to people search for alternative ways to make live paycheck to paycheck, and technology helped speed up this process.” “It has empowered people to develop and drive a range of entrepreneurial initiatives and side hustles; allowing new on-demand career choices to be utilized globally.”
He goes on to say that as a result of the pandemic, people in South Africa have been forced to reconsider their monetary and lifestyle choices. “They have developed a taste for the freedom, versatility, and unlimited potential earnings that their creative endeavors and technology have made possible, which has fundamentally transformed how they want to work and, more crucially, how they must approach their finances. ”
The Financial Requirements That the Entrepreneur Must Meet
He emphasizes the fact that the financial requirements, difficulties, and duties of a micro-entrepreneur or freelancer are considerably different from those of an employee whose main source of revenue is a wage that they receive from their employer.
These people are often creative, adaptable, and have a way of thinking that is outside the norm. We ought to rejoice about this development since these freelancers and independent business owners have the ability to become important members of the economy.
According to Munsamy, these people confront a number of difficulties, one of which is the shifting cost of petrol, which varies based on the task that they are performing at any specific time (compared to an office job, where transport is easier to budget for every month.)
“The ever-increasing prices of petrol can make running a company a costly endeavor, particularly for those in the transport, delivery, and ride-hailing industries,” he says.
“Some months can also be harder compared to others for business owners and giggers who mostly face delays and costs for services provided or inaccurate compensation patterns. This can put them in a precarious position from the perspective of cash reserves, and it can make the planning of debit order payments difficult.
In order to prevent their side hustle from becoming a burden, giggers should follow his three recommendations and investigate more adaptable cash possibilities.
Establish an Emergency Savings Account or Plan
Because of the unpredictability of your revenue, you need to set aside some money as a safety net for the months that are less hectic so that you can continue to pay your bills. Make it a goal to save aside a sizeable amount of the money you bring in during prosperous months so that you will be better prepared to weather the storms of less prosperous periods.
If you find it difficult to save aside money, you should make an effort to ensure that as numerous of your outgoing financial obligations as possible are adaptable, allowing you to suspend them when necessary. An excellent illustration of this would be halting your subscription to a streaming service, which you may then resume when your circumstances have improved.
Remember That You Have Support When Things Get Difficult
“To protect yourself from the challenging months ahead, search for financial service providers who are adaptable and ready to lend a helping hand when times go rough. For example, Metropolitan GetUp provides funeral policies that include payment skip alternatives or “tokens” that may be utilized to pay premiums during challenging months, so assuring that the policyholder will continue to be insured.
Look for Services and Manufacturers That Provide a Greater Degree of Customization Options
“Insurance that covers you and your family members ought to be a financial priority, and the industry is adapting to respond to the altering demands of consumers. This is especially true for those customers who don’t take a paycheck home at the same time per month. Invest some effort in finding adaptable alternatives that can work with your specific financial circumstances.