37% of Gig Workers Have $0 in Savings. Here's How to Build an Emergency Fund Quickly

Being a gig worker can be both a good thing and a bad one. On the plus side, you can often set your own schedule and, in many cases, work from a location that's convenient for you.

On the negative side, gig workers aren't entitled to employee benefits like health insurance and paid time off. And if you want to save for retirement, you'll need to open your own IRA, because you won't have access to an employer 401(k) plan.

Another problem with being a gig worker? Your income might fluctuate quite a bit. That could make it difficult to manage your bills. And it could also put you in a position where it's very difficult to build up your savings account balance.

In fact, many gig workers do not have money socked away in the bank. A good 37% have $0 saved, according to a Branch survey. That's up from 31% who had no savings a year ago. And that's a problem.

You can't afford to go without emergency savings

If you don't have any money in savings to fall back on, you might instantly be forced into debt if your workload dries up or your gig opportunities go away. Another problem with being a gig worker is that you're not entitled to unemployment benefits in the event of a lost job.

You may be thinking, "Wait a minute -- didn't gig workers get to collect unemployment benefits during the pandemic?" But that was a special provision put in place specifically during the early days of the COVID-19 pandemic to help gig workers during what was an unprecedented time.

Generally speaking, gig workers, or anyone who's self-employed, cannot receive unemployment benefits. So if your work goes away, you might become immediately dependent on your savings to get by. And so if you don't have savings, that's a problem.

How to build an emergency fund as a gig worker

Saving money can be particularly challenging when you're a gig worker because you can't rely on the same paycheck week after week. So if you want to build savings, what you need to do is get yourself on a budget that's based on the lowest income you think you'll earn in the course of a given month. Find a way to eke out savings based on your lowest earnings, and you'll have even more opportunities to save during months when you do better.

As an example, say you comb through your checking account and see that over the past four months, your income has ranged from $2,800 to $3,800. If you rearrange your spending so you're able to not only pay your bills on $2,800, but also, say, save 5% of that sum, then you'll be in an even stronger position to save during the months when your income is higher.

You'll also, of course, need to pay close attention to what you're spending money on. If there are non-essential expenses in your budget, slash them until your savings account has at least some money in it.

It's extra important to have emergency savings when you're a gig worker. Your goal should really be to save enough to cover three full months of expenses at a minimum. But if you're starting with $0, do the best you can to at least give yourself some type of cushion, and then work your way up gradually.