How to manage your finances in a changing world of work

Published on: June 18th, 2019

There is no denying that the world of work is changing; contracting, casual work, flexible hours and working remotely are fast becoming the new normal in many industries. Technology is rapidly advancing and changing the way we work and even what we do – many of the jobs that will be critical in the relatively near future don’t even exist yet.

With these changes come considerable opportunities, but also some risks. Your career is the source of your income and future earning potential, so it’s important that, while embracing workplace change, you also consider the impact on your financial future.

While the future may hold lots of uncertainties for us all, there are a few things you can control to ensure you are able to live for today while planning for tomorrow:

Invest in yourself

With the impact of robotics, automation, and artificial intelligence being felt in almost every industry, it’s critical to invest in continuous learning. Career management is no longer about the linear salary rise to management or expert roles. The generations entering the workforce today will most likely have many jobs and careers, so it’s about upskilling and reskilling to meet market demands; in fact, it’s estimated that 54% of all workers will need reskilling in the next three years.

Investing in yourself will not only ensure you have the skills to withstand uncertainty, it will also give you the best chance to grow your biggest asset – your future earning potential. In many cases, your current workplace will offer training budgets to cover some or all of the cost of professional development, so it may not even leave you out of pocket.

Consider your lifestyle options

Increasingly high-tech collaborative tools are making it easier to work remotely and we are seeing more and more people working from localised co-working hubs or even from home, bringing greater freedom in where we live than ever before. If you have the flexibility to live outside a major metropolitan area and still earn a decent income in your chosen field, it’s an option that is worth considering. Moving out of a city means you will likely have lower housing costs and can enjoy benefits like more space and a less hectic lifestyle.

Don’t neglect your super

With the rise in variable employment arrangements, particularly casual and contract positions that may pay more upfront but don’t attract the same benefits as permanent roles, it’s critical to think long-term.

All of us should be playing a role in the management and growth of our superannuation – it is our money after all – but it’s even more critical for freelance or casual workers who don’t have regular contributions from an employer. An American study recently found that only 16% of workers employed in freelance or ‘gig economy’ roles were making regular contributions to retirement funds, and I suspect the figures would be similar in Australia too.

Growing your superannuation is vital; it might be hard to imagine today, but relying on an old age pension in retirement won’t lead to the type of lifestyle most of us would like to live.

Protect your biggest asset

Your income is most likely your biggest asset; in fact, over a 45-year working life at just the average income, you’re worth over $3.7 million, but many Australians aren’t protecting it or are relying on inadequate cover included in their superannuation.

Putting income protection in place while you are in permanent full-time employment means you can protect your current level of income even when you are no longer earning it, such as when you are on parental leave or working in a variable income arrangement.

Set clear financial goals

In a time of uncertainty and disruption in the labour market, knowing what you want to achieve is critical and will ensure you keep your eye on the prize. It will help you make the most of your money, enabling you to weather periods of variable income while still saving toward your goals. At Apt, we always encourage people to ‘start at the end’; envisioning what life will look like when you have achieved your goal will help you make a solid plan and stay on track to reach it.

This is where a financial planner can really help, acting as a money coach to keep you on track for the future while you focus on what matters today.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.