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Using the sharing economy to reach your savings goals

17 July 2018
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When I returned from a trip to Europe last year, I was inspired - inspired to ditch my car and to walk, cycle and use public transport more. Not only were there bikes aplenty in Europe, but the general mindset was geared towards staying active and being as mobile as possible.

So I decided to conduct an experiment. I wanted to find out whether I could use my car less, get more active, and earn some extra money in the process. But how could I test my theory? By participating in the emerging sharing economy.

What is the sharing economy?

In a nutshell, it involves earning money by sharing your possessions, or your skills, with a community. In other words, people pay to temporarily use the things you own or to get help from you with a task.

Most people are familiar with services like Uber and Airbnb, but there are lots of other ways people can earn money through the sharing economy, whether it’s looking after someone else’s dog, or letting someone borrow your bike for the day.

Particularly if you’re saving for a big goal like a home deposit, it may be worth looking into new techniques like these to see if you can get there a little faster.

What was my sharing economy experiment?

I chose to rent my car within an Australian car-sharing service called Car Next Door. It’s one of a number of ‘matchmaking’ services that connects people who own a car but sometimes aren’t using it, with people who don’t own a car and occasionally need one.

As a car owner, I pay a monthly fee (there’s no lock-in contract) and get things like:

  • Comprehensive insurance
  • Pre-screening of the car borrowers (must be over 21 and with a good credit rating)
  • Flexibility to still access to my car if I need it
  • Fuel and toll costs automatically charged to the renters

On the flipside, there are some drawbacks to think about:

  • Occasionally you might not be able to use your car when you need it
  • Your car may be dropped off somewhere that’s not 100% convenient for you
  • You need to get comfortable with the idea of other people using your car, and of course, their cleanliness standards

How has the experiment gone so far?

After just a couple of months of renting my car out to a small group of regular borrowers, I had made around $560. Considering my car repayments are only $86 per month, I’ve been pretty happy with the return.

You should bear in mind, though, that how much you might make through car sharing, or other parts of the sharing economy, will vary depending on lots of factors and your own circumstances.

But giving it a go on a trial basis initially may allow you to better understand the pros and cons. That way you’ll be in a position to decide whether participating in the sharing economy is going to be worth your while in the long run, and importantly, whether it will help with that savings goal.

Be sure to do your research first, only use reputable services and make sure you and your possessions are protected properly.

If done right, it’s money for jam and could get you to your savings goal that bit faster.

View savings accounts

Important information: Please note that this is only intended as a general guide in relation to issues you may want to consider when using the sharing economy. It is not intended to be an exhaustive list of all relevant issues and does not take into account your personal needs and financial circumstances. You should take into account your own particular circumstances, and obtain independent expert advice where needed, before proceeding. Examples quoted are indicative only for illustrative purposes.

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