How work trends affect your personal finances
The way we work has significantly changed in the past few years; from remote and hybrid working to the gig economy, these trends are having a significant impact on personal finances in terms of income stability, budgeting, retirement planning and skills development.
Let’s take a closer look at the future of work and personal trends and what you can do to lessen the impact that these changes have on your ability to remain financially stable.
Cost of work and productivity
Every employee faces a cost of work, which is the amount of time, money and effort required to perform the role, and can include the office commute, workwear, etc. The cost of work directly impacts your personal finances, and it’s closely related to productivity.
When the cost of work is high, for example, when you live far away, and it takes a lot of time and money to commute, job satisfaction and work-life balance could be negatively impacted, leaving you asking whether it’s ‘worth it’ or feeling less motivated to work hard.
Remote and hybrid working
The popularity of remote and hybrid working has enabled many employees with the freedom and flexibility to work from wherever in the world they want. Increased flexibility and reduced commuting costs, such as fuel, parking and public transport, are big benefits, but remote workers need to invest in office equipment, technology and electricity backup at an additional cost to be able to perform their duties.
To ensure that this way of working works for you, it’s essential to create a budget that includes these additional expenses so that you can make the most of your flexible work arrangement.
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Top tip If you have a home office, you could be eligible for tax deductions for utilities and internet. Talk to your tax consultant today. |
Full-time office work
Many companies have brought their employees back to the office full-time. Unfortunately, employees bear the cost of being on the office premises. This mandatory rule may provide opportunities for more social interaction and collaboration, as well as access to amenities, such as coffee and tea, technology and electricity; however, it may also mean higher commuting costs and additional expenses, such as work clothes and lunches. The key to maintaining financial stability lies in reviewing your budget and prioritising your spending. Having a plan for exactly how much it costs you to be in the office full-time, will help you make the necessary adjustments.
The gig economy
With more people turning to freelance work, short-term contracts and side gigs, the gig economy offers many benefits, such as increased flexibility and autonomy. However, it can also be unpredictable and unstable, and you don’t have the same financial protections as full-time employees.
To remain financially stable, it’s important to create a financial safety net. You need to set aside money for periods where the income or work is less so that you can still manage your expenses. Avoid relying solely on one client or project and be careful not to get ‘used to’ the extra money so that you don’t fall into the trap of increasing your spending as your income increases.
How to set yourself up for future success and adaptability to changing job markets
- Investing in education and training can help enhance your skills and increase your earning potential, as well as help you to stay competitive. Positioning yourself as a valuable asset can help you get different employment or secure more lucrative projects.
- Diversifying your income stream will give your financial stability and security a boost so that if new expenses arise or if your income falls short, you’ll still be able to manage.
- Continue with your savings and investments; automate them as far as possible so that you don’t have to think about them. This will not only help create a financial safety net when you need it but also help you maintain and build on your financial stability later in life.
- When possible, take advantage of employee benefits, such as health insurance, retirement plans and car/spending accounts.
- Remember to be tax-efficient with your spending and savings and see whether you can get tax deductions for some of your work expenses.
Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).
Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.
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