If you make your money with an app — delivering food or driving people around — you already know how up and down it feels. Some days are solid, while others are dead. And just when you think you’re ahead, the car needs brakes, or gas jumps a dollar.
It’s hard to stay on top when your pay changes every week, and the thing you rely on to earn money is also what drains it. But the good news is that you can develop a system that makes your financial life less boom-or-bust. So let’s go over some ways you can ensure you’re in the driver’s seat.
Move Your Money Before You Spend It
The biggest mistake most rideshare drivers make is keeping all your earnings in one place. By not creating buckets for your money, you set yourself up for stress in the short- and long-term. The fix is to split your money the second you get paid. Here’s a simple way to start:
- Move 15% to 20% into a separate account for taxes. It can be sad to sit on money you’d otherwise want in your wallet, but trust us: Ensuring you can cover your taxes means a lot less pain and expense in the long run.
- Move 5% to 10% into another account for car repairs. This means you’re saving not just for big stuff, but little things like oil changes and random problems.
Even small amounts help. If you made $200, setting aside $30 for taxes and $10 for car stuff puts you in a better spot than last week. The IRS has great resources for rideshare drivers on preparing for tax season and managing your finances, too.
Use Good Weeks to Cover the Bad Ones
Most drivers have at least one “bad week” every month. But if you’re spending big during your good weeks, that can make the slow ones feel even worse.
But you can make a system to help you escape the doldrums:
- Look at your last 6 to 8 weeks. Add up your total income and divide by how many weeks you counted to get your average weekly earnings.
- Move the extra into a separate account each week you earn more than that number. When you earn less, use some of that backup to help cover basics — gas, bills, groceries.
Even if you only do this a few times a month, it smooths out the highs and lows, and keeps you from reaching for credit cards just to stay afloat.
Stop Losing Money to “Dead Miles”
Every time you drive with no rider, are waiting around more than you’re working or go too far for a low-paying order, you’re spending more than you’re making. These are called dead miles, and they’re one of the biggest reasons money can simply seem to vanish.
Instead, use your experience to inform your strategy. Keep track of changes to the app by engaging with your business community online. Prioritize busy zones during periods of peak demand instead of driving all over the map, or stay in dense areas when delivering food. Some people only drive during surge pricing hours, while others focus on trips with short pickups and stacked rides. No matter what works for you,be sure to track it.
Check in on your habits too: Your app might show you how much you made, but it doesn’t show how much you kept. Look back at your recent high-paying rides and factor in the cost of gas, the length of the drive and whether you were able to get a follow-up ride without needing to drive a significant distance. Your goal is to understand your real earnings — and what you find should inform your strategy going forward.
Set a Quick Check-In Every Few Months
A 10-minute check-in every 3 months can save you from a big surprise later. Just ask yourself a few things:
- Are you putting away enough for taxes?
- Did you use your car fund yet?
- Did you earn less than you thought this month?
The point of checking in regularly is to catch issues before they snowball. Based on what you find, you can adjust your approach if needed by bumping up your tax savings a bit, or allocating more funds to your car repair account.
Take Breaks to Avoid Burnout
If you’re always tired, your spending will go up. Energy is the difference between spending money on fast food and cooking yourself a meal before hitting the road. And when you’re putting everything into earning money, you risk filling your social needs with buying stuff.
And the best medicine for burnout is rest. So while your schedule might change from week-to-week, always make sure you’re taking a day off to rest your brain, body and car. Be thoughtful about getting some exercise and socializing in, too. After all, enjoying your earnings is better when you’re feeling healthy!
Give Yourself Some Leeway
If your credit card, medical or personal loan debts are eating into your earnings, know that there’s a better way to pay off your debt. With Accredited Debt Relief, you could slash your eligible monthly payments by 40% or more, and even get free from debt in as little as 24-48 months.