The gig economy is booming.
If you’re thinking of using your skills to take on a side gig, what should you do with the extra money?
Here are a few possibilities:
First, you could contribute to your IRA.
For the 2023 tax year, you can put in up to $6,500 to an IRA, or $7,500 if you’re 50 or older.
Income limitations do apply for a Roth IRA.
You might also use your gig money to explore other investment opportunities.
For example, if you have children, you could invest in a 529 education savings plan.
A 529 plan offers potential tax benefits and can be used for college, qualified trade schools, and even K-12 expenses.
Potential tax benefits will vary by state.
Here’s another possibility: Use some of your gig money to build an emergency fund containing several months’ worth of living expenses.
You’ll want to keep this fund in a liquid, low-risk account separate from your daily spending accounts.
Furthermore, you might want to pay down some debts, especially if you’ve got high-rate credit cards.
Your side gig money could open several promising windows of opportunity - so take a look through all of them.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
