Simple Financial Tips for Gen Z Navigating the Gig Economy

The gig economy is no longer an outlier. For many people in Generation Z, it is becoming the norm.

A 2023 World Bank report estimated that there were as many as 435 million gig workers around the world, representing as much as 12.5% of the global labor force. By 2027, about half of all workers in developed countries are expected to be part of the gig economy, which is growing three times faster than the traditional workforce, according to a report by Ogilvy. And Gen Z appears to be leading that trend.

Stoy Hall, CEO of the financial advisory firm Black Mammoth, argues that this can be a double-edged sword: “They’ve got flexibility, autonomy, and multiple streams of income. That’s powerful,” he said. “But they’re also skipping out on the things that build long-term financial security—like retirement plans, employer benefits like health insurance, and predictable income. The gig mindset feels freeing, but [it’s] leaving a lot of young folks financially exposed.”

Despite challenges, there are ways for gig workers to cobble together a safety net on their own terms.

Build a Cushion for Emergencies

Irregular paychecks make static budgets and schedules hard to follow. Personal finance experts recommend a reverse approach: Base this month’s spending plan on last month’s income, then park surplus cash in a cushion equal to one month’s expenses before you start allocating funds. One popular approach is zero-based budgeting, where each budget period starts from zero and every expenditure is justified from scratch. 

When starting out, freelancers should aim for an emergency fund of six to 12 months‘ expenses—more than the typical three-month rule. Because gig assignments can dry up suddenly, a larger buffer will provide an extra cushion before new jobs start coming in. Automating savings deposits can keep savings plans on track and help avoid the temptation to spend.

Taxes also require special attention. Because platforms do not typically withhold payroll taxes, the IRS expects freelancers who owe at least $1,000 for the year to make quarterly estimated tax payments (via Form 1040-ES). So you don’t run afoul of IRS rules, aim to carve out 25% to 30% of every payment you receive in a high-yield savings account earmarked specifically for taxes.

Replace Benefits With a DIY Stack

• Health insurance: Gen Zers whose gigs are their primary income can buy coverage on the Affordable Care Act marketplace. Enhanced premium subsidies—extended through 2025—keep plans affordable even for those with moderate incomes, sometimes lowering premiums to under $10 a month.
• Retirement planning: Two self-employed options stand out:
• Roth IRA or traditional IRA: Contribute up to $7,000 in 2025 (or $8,000 if you’re 50 or older).
• Solo 401(k) or SEP-IRA: For higher earners, a solo 401(k) allows elective deferrals plus an “employer” profit-sharing contribution, capped at $70,000 in 2025. SEPs offer similarly high limits with less paperwork but no tax-exempt Roth feature.
• Insurance gaps: Gig workers should also consider
• Disability insurance, which protects your income if an accident or serious illness sidelines you.
• Liability or commercial-auto coverage if you drive or deliver.
• Portable benefits accounts: Utah, Alabama, and other states are piloting programs that let platforms contribute to pooled benefit funds that you control when you shift between gigs.

The Bottom Line

Gen Z’s embrace of gig work offers unmatched flexibility and autonomy, but it also shifts the burden of benefits and long-term security onto the individual. Hall sums it up this way: “If you want the freedom of a CEO, you need the financial discipline of a CFO.”

By budgeting for irregular cash flow, building a DIY suite of insurance and retirement accounts, and continually investing in both markets and new skills, young freelancers can turn the gig life into a diversified, resilient, and ultimately prosperous financial future.