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Are you financially unstable?

financially unstable

Let’s look at financial stability, what it is, the causes of financial instability, and how to become financially stable.

Anxiety over financial instability isn’t a good feeling, but you’re not alone: According to a 2021 survey, fewer than 4 in 10 Americans could cover an unexpected $1,000 emergency with their savings. Nearly 20% said they would need to put that expense on a credit card and pay it off over time. 

As a gig worker or someone who is self-employed, you may feel the pressure of financial instability even more than most. While others have the benefit of receiving a regular income, your income varies from month to month and may fluctuate based on seasonal or economic changes. 

But stressing over finances doesn’t have to be normal. And while being able to pay for an emergency is a good indicator of financial security, it’s not the only one. Even if you’re experiencing financial instability right now, there are many steps you can take to improve your financial stability.  

What does financially stable mean? 

Financial stability can look different for each person or family, but there are some things financially stable people have in common. 

You’re not worried about making ends meet when you’re financially stable. And if you live on less than you make, you know you have enough to cover your bills each month. You also stick to a budget, are debt-free, and are saving for retirement. 

If you’re financially stable and lose your job, it’s not the end of the world. No one wants to lose their income unexpectedly, but part of being financially stable means you have at least a small savings account you can fall back on if times get tough. Financially stable people also have a plan for their future, which usually includes saving for retirement and other long-term savings strategies. 

How much money do you need to be financially stable? 

Since financial needs are unique to each individual or family, there’s no set amount of money you need to be financially stable. A good rule of thumb is to save up three to six months of expenses in an emergency fund.  

You won’t be able to come up with that kind of cash overnight, but once you make a budget, you can begin stashing a little bit of money into your savings account each month. Before you know it, you’ll be able to cover small emergencies. Being consistent with your savings over time will relieve financial pressure and give you more confidence in your financial stability. 

What are the causes of financial instability? 

Financial instability can have several causes. Usually, it’s a combination of several things: 

Living outside of your means – Having too much month left at the end of your money causes anxiety, stress, and scrambling to make ends meet. 

Too much debt – Debt, especially consumer debt like credit cards, often increases your expenses each month unless you’re diligent about paying it down regularly. Interest and late fees can cause debt to balloon. 

Not enough short-term savings – If you can’t cover small emergencies with your savings account, you may turn to credit cards, causing a vicious cycle of not having enough money to cover your expenses each month. 

Not enough long-term savings – Saving up enough cash to cover minor emergencies is great, but to be truly financially stable you also need to think in the long term. Having larger amounts of money set aside through investments, a retirement plan, or other long-term investment strategies is a part of financial stability. 

Cash flow issues – Even if you have good financial habits, months of reduced income (because of illness, lack of work, or some other factor) can cause financial instability. 

How to become financially stable? 

Even if you’re financially unstable now, you don’t have to live that way forever. Small changes over time can positively impact on your financial situation. Here are a few critical steps to get on the right track with your finances. 

Live on a budget – Living on a budget as a gig worker or an independent contractor is easier said than done, but it’s not impossible. Here are some tips for budgeting with an inconsistent income. The key here is to spend less than you make each month, even if it’s just a few dollars. 

Pay down debt – Whether it’s credit card debt, student loans, car loans, or other types of debt, these payments weigh down your financial life. There are a few different methods of paying off debt, so pick what works best for your situation and get started. 

Save up for an emergency fund – If you don’t already have a savings account, now is the perfect time to get started saving an emergency fund. It’s going to take some time but setting incremental goals for yourself can help you stay motivated. You could start with saving your first $500, then make a goal of $1,000 once you reach that. Keep building from there, and you’ll have your 3-6 months of expenses saved before you know it. 

Set up a long-term savings plan – Many employers offer their employees 401(k) plans, company shares, or other long-term investments. As a self-employed individual or gig worker, consider doing the same thing for yourself. If you’re not sure where to start, check with an accountant or a financial advisor to see what the best long-term investment strategy is for you. 

Diversify your incomeDiversifying your income is a good way to become more financially stable. Even if one income stream dries up, you have others to fall back on.  


Financial instability causes stress, anxiety, and feelings of helplessness. By making small changes in the way you handle your money, you can become more financially stable and begin making progress toward your financial goals. 

You can use your indi account to help you stay on track financially. Our banking solution was created to help gig workers and those who are self-employed bank on the go and save up for expenses. indi’s features like autosave for taxes, early pay, and fee free transfers make us an ideal partner to help you meet your financial goals. 

This article is not intended to provide financial, tax or legal advice and the information provided may not address your individual circumstances.