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I’ve spent a lot of time over the past decade or so pointing out the personal finance challenges raised by the gig economy, which is a euphemism for temporary or freelance work. That means no benefits, no job security and no pension or group RRSP to help with retirement saving.

But whether by necessity or preference, a lot of young adults in particular work in the gig economy and do fine. One of them is Sachi Lovatt, a Toronto-based actress whose recent work includes a role in the TV series The Handmaid’s Tale and narrating the Penguin Random House audiobook Speak, Okinawa.

Ms. Lovatt got in touch recently to say she’s enjoying the Stress Test podcast I’m doing with Globe personal finance editor Roma Luciw, and to suggest some topics related to gig work. I decided to ask her to tell us more about managing your finances as a gig worker. Here’s a Q&A we did by e-mail:

Q: What can you tell us about the stresses and benefits of being a freelancer with an income that varies month by month and year by year?

A: The stresses – it is challenging to make a budget, stick to it and meet savings goals without ever knowing how much I will earn. Although I now always earn enough to pay my bills, that wasn’t always the case in the beginning of my freelancing career, which was stressful. I seldom take vacations because if I don’t work I don’t get paid.

The benefits – there is no income cap; sometimes I earn three times as much as a normal month. Some months I earn more than my spouse, who has a full-time salaried job. I can work as much or as little as I’d like. If I take time off, I can easily earn money again when I return; there is no job hunting required, just reconnecting with old clients. I make my job work around my life, not the other way around, which for me is priceless.

Q: How much is in your Plan B fund for emergencies such as a lengthy period between gigs, and how long did it take to get there?

A: I have the security of a spouse who has a full-time job, and our emergency fund is $3,500. We used to have $15,000 in savings, but recently put $11,500 of that toward our debt. I never have lengthy periods between gigs because I have diversified: I have multiple freelance jobs in addition to my main profession as an actor. The pandemic made it evident to me that there is actually quite a bit of financial security by being a diversified freelancer. I earned more money during the pandemic than before it.

Q: How often do you find yourself drawing down on your Plan B fund?

A: A few years ago I drew upon it every few months, as we had just moved countries and had no jobs. Since being more settled, I rarely touch the Plan B fund. The last time I did was when we moved about a year ago. I borrowed from our savings to pay for the first and last month’s rent, but was able to pay myself back (i.e., replenish the fund) quickly.

Q: How do you balance keeping your Plan B fund topped up and saving for retirement?

A: I recently read Dave Ramsay’s book, The Total Money Makeover, and have started following his step-by-step guide. As a result, I am aggressively paying off debt, then will be saving three to six months’ worth for an emergency fund, then saving/investing for retirement. My eventual goal is to live off half my income and to invest the other half.

Q: What’s your system for making sure you can pay the income taxes you owe?

A: For every paycheque that is not taxed at source, I immediately put 15 to 20 per cent of it into a TFSA. I only use it to pay off my tax bill once a year, and anything left over I add into my savings. I keep track of all my income, expenses and money set aside for taxes in a spreadsheet.

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