MoMo Productions | Stone | Getty Images

Freelance, or gig work, is on the rise. People freelance for a range of reasons, and their satisfaction levels and financial challenges also vary, according to a survey from Prudential. For millennials, it’s all about work-life balance. This age group often has children under age 18, or still is in school. Gen X works the most hours per week of any generation, but earns less than boomers. They are likelier to be doing gig work to make ends meet, the survey found. Boomers want freedom, the study says. The gig model suits retirees working to make ends meet, and they have higher levels of satisfaction. “They’re doing things that are personally more engaging,” said Todd Sensing, a certified financial planner and owner of FamilyVest in Destin, Florida. “It’s not as much about the money.”

Gig work is here to stay. These work arrangements now make up 16 percent of the workforce, a 6 percent increase since 2005, the study found. Prudential polled 1,491 workers, including 514 full-time, 256 part-time traditional employees and 721 gig workers in 2017. The study’s top takeaway is that freelance workers at any age face financial challenges. From health insurance, to saving for retirement, to paying quarterly taxes, freelancers must arrange their own benefits. Here’s what gig workers can do to smooth out some of the unpredictability and meet some financial goals.

Tame income volatility

It’s hard to manage an uneven income, says Alicia Butera, a CFP for Planning Within Reach in San Diego. Get a grip on your money by setting a budget and choosing a method to move your money around. “Know how much of each paycheck to distribute into different bank accounts for separate purposes,” Butera said. For example, each paycheck could be divided among three accounts: 50 percent to standard checking, 30 percent for taxes and 20 percent for emergency savings or extra debt payments.

Save for a rainy day

Everyone needs an emergency stash, but gig workers especially need a cushion against a few months without income. Younger workers probably don’t need as much, says Shane Mason, a CPA and CFP in Brooklyn, New York. “There’s a lot more jobs when you’re in your 20s, because you’re at the bottom of the totem pole,” Mason says. He recommends three months for younger workers. Older workers need more emergency cash, Mason says. Those who live in New York City or San Francisco ─ where three months’ rent could be $5,500 ─ should build up more money than people in, say, Ohio, for example.

Remember the taxman

Add withholding and paying your own taxes to the list of tasks you must do as an independent contractor. Helen Ngo, a CFP and CEO of Capital Benchmark Partners in Atlanta, recommends estimating your total income for the year and setting up automatic contributions to a business high-interest savings account.

That way, you can make sure you have enough cash each year to pay taxes on time. “Not only are you getting into the habit of saving and ensuring you meet your tax bills, your money is also working for you until the quarterly tax due date. Let’s say you expect to make $40,000. You can estimate that 20 percent ─ $8,000 ─ may go toward taxes. Set up auto deductions of $667 a month to go into a high interest savings account. “Anything left over at the end of each year is additional savings you can reinvest in your business or use for additional retirement contributions,” Ngo says.

Put your money to work

"Save for retirement, but make sure to invest,” said Krista Cavalieri, a CFP and owner of Evolve Capital in Columbus, Ohio. “Many people forget that saving in a retirement account is not enough,” she said. Cavalieri cites what she calls horror stories of people saving without investing. “Years go by before they notice,” she says. In other words, people can lose out on upside potential in the market by avoiding risk.

Have an answer to ‘What if… ?’