In our fast-paced modern society, there’s a growing desire for achieving a better balance between work and personal life. This goal resonates with various demographics, ranging from professionals grappling with lengthy work hours, dual-income households balancing demanding jobs with childcare responsibilities, to older individuals seeking more time for family and hobbies as they transition into retirement.
While some individuals aim to increase their working hours, the predominant motive for pursuing work-life balance is to reduce the time spent on the job. Many of us have dreamt of additional hours to pursue personal interests or hobbies, maybe dedicating more time to family activities, adding exercise into our routines, or simply unwinding on the couch after a demanding day.
Initially, it was primarily professional women who pursued part-time work arrangements to balance career aspirations with parenting duties.
Today, a growing number of both men and women are exploring flexible work setups that allow them to balance professional commitments with personal pursuits, caregiving responsibilities, health improvement endeavours, or voluntary engagements.
The need for time out
The Gender Equity Commission states that 15 percent of Australian men work part-time, compared to 42 percent of women. Economists estimate that women who take breaks from the workforce to care for children experience an average income decline of 17 percent over their lifetime, significantly impacting their overall earning potential (There’s big changes coming for the paid parental leave, click here to read more)
Before reducing your working hours, it’s crucial to grasp the implications on your take-home pay and weekly expenses. While certain expenses, like childcare, may decrease, most financial obligations remain constant.
Ideally, your financial situation should still allow for financial progress even after transitioning to part-time work. If not, a detailed review of expenses is necessary to identify areas for cost-cutting.
Key considerations when contemplating part-time work include ongoing expenses, changes in tax liabilities, access to credit and managing existing debts (particularly substantial ones like mortgages), and potential eligibility for government benefits.
What about your Super?
It’s also essential to assess the impact of reduced wages on your superannuation savings. Many individuals are surprised by the significant difference in their final balance after taking a career break or adjusting their work-life balance. Consideration of additional contributions to your super fund may be prudent to maintain previous contribution levels.
Exploring Alternatives
If the prospect of part-time work doesn’t align with your preferences, there are alternative strategies to achieve a better work-life balance while retaining your full-time position.
Discussing flexible work arrangements with your employer, such as working from home or adjusting work hours, can provide more flexibility without reducing your work hours. Outsourcing household chores can also free up time and improve overall family well-being.
Crafting a Financial Strategy
Achieving a balanced work-life dynamic is feasible without compromising financial stability or career aspirations. Financial advisers can help navigate the financial implications of transitioning to part-time work and discuss a financial plan to optimise your situation amidst these changes.
If you’d like to discuss your options to reduce your working hours or transitioning to retirement, contact us here to arrange an appointment.
