Money Management

Female freelancers charge about 26% less than male freelancers. See how freelancers can get paid more by ending the gender pay gap. [[{“value”:”

Being a freelancer is a great way to start a small business. If you have professional skills in technology, marketing, business consulting, or other expertise, being an independent professional freelancer is a great way to make a living with a flexible schedule.

Some people decide to become freelancers so they can get away from the restrictions and frustrations of office jobs in the corporate world. But one big problem with “real jobs” unfortunately can also be common for freelancers: the gender pay gap.

A recent survey from OnDeck, a small business lender, found that male freelancers charge about 26% more per hour than female freelancers. That means that the “freelance gender pay gap” is even bigger than the overall gender pay gap, where women get paid about $0.82 for every dollar that men get paid (or 18% less).

How can freelancers and small business owners fix this gender pay gap? Let’s look at a few ideas.

1. Better pay transparency

The gender pay gap is often a result of systemic problems and disparities. Big employers can try harder to fix it with pay equity policies and salary transparency — such as publicly posting the salary ranges for all job listings.

But these actions might not apply to freelancers. Freelancers often negotiate their own hourly rates or fees per project. To fix the freelance pay gap, freelancers should try harder to encourage pay transparency. When people know what a job (or freelance gig) pays, they can negotiate a better deal for themselves.

Freelancers and their unions or associations should encourage employers to openly post and share freelance gig pay rates, hourly rates, and per-project fees.

2. Better market research among freelancers

Big corporations do market research every day so they can understand what customers want and how much customers are willing to pay. Freelancers need to do the same. As a freelancer, if you’re part of any industry associations, professional groups, or discussion boards where you can network with your fellow freelancer peers and colleagues, there are a few questions that you should ask frequently:

How much does that client pay?How much is that project worth?Can you share the pay rates for that?How much did you charge per hour when you were just getting started, and how much do you charge now?

Freelancers should communicate amongst themselves to share how much they earn or how much they charge. You might be surprised at how much more money your colleagues and competitors are charging for the same work that you’re giving away at a discount. Don’t accidentally end up in a situation where you’re not charging competitive rates. This isn’t about gouging clients or asking people to share sensitive secrets — it’s about setting your rates at a fair level.

3. Freelancers should join associations like the Freelancers Union

Being a freelancer doesn’t have to be lonely. Join professional organizations like the Freelancers Union. Look for industry-specific groups and professional development associations. Go to in-person meetings and networking events. Meet other people who are making a living in your industry as consultants, freelancers, or other independent professionals.

Because freelancers often work as solo professionals on one-off projects. Just by the nature of the flexible, short-term work that so many freelancers do, joining a union doesn’t always mean the same thing that it might mean for a factory worker, firefighter, or Hollywood screenwriter. You might not get collective bargaining power like the Screenwriters Guild or other high-profile unions. And that might not be legal, possible, or desirable for the gigs you want and for how you manage customer relationships.

But by joining a union or other professional association, you can get better information and insights on how your industry works and how much you deserve to get paid. Freelancers don’t have to go it alone. You can connect with a larger community of peers to get equipped with better tactics, tools, and contracts for how to ask for what you deserve.

Bottom line

The freelance gender pay gap is a reflection of larger systemic problems with how men and women get paid. But we don’t have to accept it! Freelancers, consultants, and solo entrepreneurs have the power to change the way they work, the way they charge, and the way they build community to advocate for their best interests and get a better deal from every client and contract. Understanding your value as a freelancer can help you command higher hourly rates and put more money in your small business bank account.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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If you don’t have enough savings to cover an emergency expense, try to avoid debt. This type of credit card could help you avoid expensive interest charges. [[{“value”:”

Receiving a hefty surprise bill is not fun. If you don’t have savings, your first thought might be to use a credit card to pay off the expense. But before you rush to swipe a credit card, there’s another option you should explore that may allow you to escape a difficult financial situation without incurring credit card debt.

Avoid interest charges when swiping a credit card

Some credit card companies offer 0% APR credit cards. These cards charge 0% interest for a set introductory period. Some allow cardholders to avoid interest charges when making new purchases, while others allow cardholders to avoid interest on eligible balance transfers.

If you need to pay for an unexpected large purchase and don’t have enough money in your emergency fund to cover it, consider using a card like this. You won’t be charged interest if you pay off the balance before the introductory 0% APR period ends.

How to benefit from using a 0% APR credit card

Review the offer terms and card details before you get a 0% APR credit card. This will allow you to choose a card that meets your expectations. Understanding how long the promotional period runs can also help you devise a plan to pay off the debt.

Here’s an example of how you can use a 0% APR credit card to pay for an emergency expense without racking up any debt: Imagine you open a credit card with an intro offer of 0% APR on purchases for 15 months. You use the card to pay for a $3,000 expense. You must pay off the balance before the promotional period ends to avoid debt. Paying $200 monthly for the next 15 months will allow you to do that, which is more manageable than paying $3,000 upfront.

Credit card debt is a growing problem

You might wonder why you shouldn’t use the credit card you already have to cover an emergency expense. Unless you can pay the entire balance when your statement arrives, your credit card issuer will tack on interest charges. Most credit cards have high interest rates, some with variable interest rates of up to 29.99% — so these fees can add up fast.

The Motley Fool Ascent highlighted credit card debt statistics and found that it is a growing problem for Americans. In 2023, the average American had $6,501 of credit card debt.

The longer it takes to pay off high-interest debt like this, the faster the account balance grows. It’s essential to do what you can to avoid interest charges. Paying your account balance in full each month is the best strategy to avoid costly interest fees.

You can prepare for emergency expenses before they happen

Using a 0% APR credit card for emergency expenses is an excellent strategy to avoid debt if you don’t have savings. But you can financially prepare for emergencies before they happen. Establishing a solid emergency fund is one way to do that. Even if you can only afford to set aside $50 a month, it’ll make a difference, and your fund will grow over time.

Consider keeping your emergency fund in a high-yield savings account so you earn interest while your cash sits in the bank. If you struggle with remembering to save, you can use automation. Setting up automated transfers from your checking account to your savings account is easy, and it can help you stay on track while you continue to tackle your goals.

Setting aside money before a big life change or emergency occurs could help you stay out of debt. But if you need to pay a costly bill and don’t have savings, consider a 0% APR credit card.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Did you save cash during the pandemic? Fed research shows that Americans saved a ton of money — but now it’s gone. Read on to learn the impact. [[{“value”:”

Do you feel like you’ve been spending a lot of extra money and burning through savings lately? If so, you’re not alone. A recent study from the Federal Reserve found that Americans have finally spent the “excess savings” that they built up during the pandemic.

During March 2020–August 2021, Americans managed to save a lot of extra money. But now those savings accounts have been depleted. What are excess savings, where did they come from, and where did they go? And what does the end of the pandemic savings boom mean for the economy, for your investments, and for your savings account?

Let’s look at a few insights about the end of pandemic savings — and what could happen next.

“Excess savings” during the pandemic: $2.1 trillion

A recent blog article from The Fed explains that between March 2020 and August 2021, Americans built up an extra $2.1 trillion of savings. These are called “excess savings” by economists, or a “surplus” of savings — because people suddenly started saving significantly more than they had been saving before the pandemic hit.

Remember the days of pandemic lockdowns and social distancing and stimulus checks, when most people stopped traveling, going to movies, and dining at restaurants? Along with the vast human suffering and tragedy of the pandemic, those times were terrible for a lot of small businesses and for many people’s mental health — but they were good times for savings accounts. It turns out, not going anywhere or doing anything for months is a great way to save money.

In a country where people are known for being spendthrifts, where many people struggle to build up a decent emergency fund, Americans saved an extra $2.1 trillion in about 18 months.

How Americans spent their extra pandemic savings

The Fed’s economists tracked America’s spending habits and found that Americans spent their excess savings from the pandemic at a rate of about $70 billion per month, starting from September 2021. That pace of spending sped up since autumn 2023, to a rate of about $85 billion per month — and as of March 2024, Americans’ excess savings were totally depleted.

The Fed’s data doesn’t show exactly what Americans spent that extra money on, but it’s likely that higher prices for groceries, food, healthcare, cars, car insurance, and pretty much everything else have taken their toll. Add some “revenge spending” and “doom spending” to the mix, and it’s easy to see how many Americans could quickly deplete their savings accounts in the past three years.

This doesn’t mean that all Americans have zero dollars left in the bank. Many Americans still have emergency savings, and some people are (hopefully) still saving more money every month out of every paycheck. But it does show that the extra stash of “excess savings” is finally gone.

The end of pandemic savings doesn’t mean economic pain

What does the depletion of America’s extra pandemic savings mean for the American economy? Good news: The Fed’s researchers don’t believe that the American economy is about to suffer from a slowdown in consumer spending.

The authors write: “…the depletion of these excess savings is unlikely to result in American households sharply cutting their spending levels as long as they are able to support their consumption habits through continuous employment or wage gains, other forms of wealth—including non-pandemic-related savings—and higher debt.”

The job market is still strong, wages are still rising, and many Americans still have access to credit, steady incomes, and plenty of spending money, even though prices have risen painfully in the past few years. We could be in for a “soft landing” in the economy, where even though the Fed has raised interest rates, it doesn’t lead to a recession.

What to do with your savings — excess or “regular”

No matter how much money you have in your savings account, you deserve to see that money grow. Some banks are still paying terribly low yields of 0.01% APY. But the best savings accounts and money market accounts are offering 5.00% APY and higher. If you still have savings, put them in a high-yield savings account. And try to keep adding to your savings every month.

Bottom line

New research from the Federal Reserve shows that Americans built up $2.1 trillion of “excess savings” during the pandemic — and as of March 2024, that extra money has all been spent. But that doesn’t mean we’re doomed to a recession and a stock market downturn. Many Americans are still spending at high levels, thanks to a strong job market, rising wages, and steady access to credit.

The economy might turn out to be fine, despite the end of the pandemic era’s extra pile of savings. But whatever happens next with the economy, your savings account should be earning a high yield — 5.00% APY or higher in the best savings accounts.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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