In today's society, finding a work-life balance is an ever-increasing challenge. Still writing that email, or just responding to a colleague during the weekend. Many people are considering working less or structuring their work differently, partly because of this.
This article briefly offers a number of insights and practical tips on how you can tackle this while remaining financially strong.
Working less can offer many benefits, such as more time for yourself, your family, and your passions. It can also contribute to better mental and physical health.
Research shows that a lower workload can lead to better sleep, fewer burnout symptoms, and even a stronger immune system. You have more time for relaxation, exercise, and healthy choices. Additionally, it provides more time to be with your family or loved ones and enhances creativity and productivity at moments when you ARE working.
Nice, all those benefits, but how do you tackle this without compromising your financial security? Because without certainty, you'll still come home empty-handed.
It is essential to get a clear picture of the financial impact of working less. Create an overview of your current income and expenses and calculate how much you can save by working less. For example, because you have to travel less by train or car. Perhaps you pay less for childcare.
Also consider possible tax benefits and other financial arrangements. Use tools such as the buffer calculator to see how much of a buffer you need.
Transparent communication with your employer is crucial. Explain why you want to work less and discuss the possibilities, such as flexible working hours, part-time work, or a sabbatical. Many employers are open to such conversations, especially if you can demonstrate that it will benefit your productivity and well-being.
If working less is not possible within your current role, consider a career switch or a sabbatical. A career switch can offer you the opportunity to find a profession that better aligns with your wishes and needs. A sabbatical can give you the time to reorient and invest in personal development.
Mothers in particular who want to reduce their working hours can benefit from specific financial strategies. It is important to gain control over your finances and ensure that you are independent and self-assured. It is also very important because, according to recent statistics, women are lagging behind in both their pension knowledge and accrual. Not smart if you want to be financially secure later on.
A good budget is the foundation of financial stability. Create a detailed overview of your monthly income and expenses. Look for savings opportunities and set realistic savings goals. Automatic saving can help to regularly put money aside.
Automatic saving is a powerful way to achieve your financial goals, especially because it plays into important psychological principles. One of these is the concept of "default bias", or the preference for the standard option. If it happens automatically, you don't have to think about it every time. This lowers the threshold for taking action and ensures that saving becomes a habit.
Additionally, automatic saving eliminates the temptation to spend money as soon as it enters your account. You simply don't see the money, which makes it feel less like you are giving something up. This principle is called "mental accounting": you unconsciously divide your money into categories, and money that has already been saved feels less available for impulse purchases.
Automatic saving is therefore a smart and stress-free strategy for a better financial future.
Set short- and long-term goals for yourself (and your family). This can range from building an emergency fund to saving for a holiday or your children's education. By clearly defining your goals, you can work more purposefully towards your financial future.
A psychological trick that is often suggested is visualising your goal and taking small steps. This way, you have your goal clearly in mind, for example, a long holiday, or an education. And the small goals give you the chance to constantly achieve a victory.
But what about retiring early?
Many people dream of retiring early, but this requires careful planning and preparation. It is important to know how much income you need to live comfortably without working.
Calculate your expected pension payments and additional income sources, such as savings, investments, or part-time work. Ensure you have a realistic view of your future financial situation. Use tools such as the Pension Disc of Five to determine a good amount you should put aside.
Building a solid financial foundation is crucial. Ensure you have a sufficient buffer and invest wisely to maximise your income. Consider talking to a financial advisor to optimise your pension planning. Discipline is important here; set up automatic direct debits to save regularly for your pension and use tax benefits.
Building a financial foundation goes beyond just saving. Here are some detailed steps to better prepare yourself:
Working less or retiring earlier are achievable goals, provided you are well prepared and make smart financial choices. By budgeting consciously, planning your goals, and communicating openly with your employer, you can find a better work-life balance while maintaining your financial security.