Here’s how to prepare for you financial future if you work in the gig economy

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  • The gig economy makes up 16% of all US workers.
  • A lack of benefits is a downside of being part of the gig economy. 
  • People who work in the gig economy need to prepare for their financial futures.


Gig workers have freedoms that most full-timers only dream of: setting their own hours, working from home, being their own bosses. No wonder the gig economy comprised 16 percent of all workers by 2015, according to research by economists Lawrence Katz and Alan Krueger.

However, being a free-agent also has its downsides. According to Prudential Financial Inc.’s 2017 study Gig Workers in America: Profiles, Mindsets and Financial Wellness, erratic income, less job security and fewer employer-provided benefits are some of the main issues associated with the growing trend. Only 16 percent of people who work solely as independent contractors have access to employee-retirement plans. Further, fewer of them have access to standard employer-provided benefits, even through their spouses or domestic partners. This often makes the three steps to financial wellness – living within a budget, saving for important goals and protecting against financial risks –  a challenge.

Unless there is a fundamental shift in the behaviors of gig workers and their employers, the lack of employer-provided benefits to a growing sector of the economy could mean that we are heading toward a widespread personal financial crisis in America.

Laying the foundation to financial wellness by following the three basic steps sounds simple enough, but it becomes difficult when matched against ingrained behavior. We put off thinking about the future; we don’t anticipate financial emergencies, choosing to focus on immediate, day-to-day needs; and we’d rather buy nice things now instead of making the right choices to ensure our future financial wellness.

With so many different people performing gig work, there is no one-size-fits-all solution. From a baby boomer who moved into self-employment after a career of full-time work, to a gen-Xer who is pursuing a dream of using professional skills independently, or perhaps a millennial who is building a career foundation while trying to make rent and pay down student debt. Each individual needs a different approach to ensuring their financial wellness, and here’s how they can do it:

  • Create a livable, sensible household budget and stick to it.
  • Build an emergency fund. It’s not the most fun step, but can be the most important. Save a set amount or a percentage of each paycheck for an emergency like a car/home repair or a health care bill. This is especially important for gig workers who rely on sometimes sporadic income streams and often don’t have the same protections as the full-time workforce.
  • Create your own long-term safety net. Gig workers can set up Individual Retirement Accounts, buy individual health care coverage and tap into benefits offered by professional associations.
  • Plan for the future: consult a financial professional. Given the challenges in creating a budget and planning how much to save, perhaps the best place to get help is from a pro. We trust experts to fix our houses and cut our hair, why wouldn’t we get advice on budget-making and budget-following from one?

While the traditional workforce probably won’t be surpassed by gig workers in the next few years – full-timers offer employers consistency and loyalty – the advantages of the gig economy mean that it is unlikely to disappear. Helping individuals learn how to own their personal financial wellness can help prevent today’s trend from becoming tomorrow’s crisis.

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