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How To Achieve Financial Success In The Gig Economy

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    The gig economy is expanding as an increasing number of people decide to leave their demanding full-time jobs in favour of jobs that offer more flexibility, freedom, and the chance to work on interesting projects. It's the topic that everyone seems to be talking about these days.

    As maintaining a healthy work-life balance becomes increasingly important for the average worker, statistics show that workers in the gig economy are of all ages and come from a variety of different backgrounds. This is in contrast to what was once believed to be a shift in work behaviour that was unique to millennials.

    According to the Australian Bureau of Statistics, approximately 2.5 million Australians, including freelance and gig workers, are currently working on a casual basis.

    This equates to around a quarter of the workforce being comprised of gig workers, which is an increase of approximately 13 percentage points since the 1990s.

    Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

    There are a few disadvantages associated with participating in the gig economy, despite the fact that it has a lot of benefits for people who are trying to find a better balance between their personal and professional lives. These would be things like having an uncertain income as well as an insecure employment situation, not having any savings for retirement, and not having any personal protection in case something happened that prevented you from being able to work.

    Nevertheless, despite these limitations, there is no need for you to fall behind other people when it comes to achieving monetary success. You can strive towards a more financially secure future in a variety of different ways while still making use of the job flexibility options available to you.

    The secret to achieving one's goals? organisation in addition to support and instruction from specialists.

    And now, directly from those financial gurus who were just mentioned, here are some suggestions for achieving financial success in the gig economy:

    1 – Make An Easily Accessible Safety Net

    If you work in the gig economy, it is highly unlikely that you will ever be able to accurately forecast exactly where or how much money will be included in your subsequent pay check. Establishing and maintaining a financial safety nett that you are able to draw on quickly in times of need is therefore absolutely necessary in order to achieve the desired level of financial success.

    When work is sluggish or a payment you were counting on is late, having a cash reserve on hand ensures that you won't need to use your credit card or take out a loan to supplement your income in order to keep up with your expenses. If you want your money to work a little bit harder for you while still allowing you access to it, one option is to invest some of your reserve in short-term assets such as high-interest savings accounts. This can be done if you want your money to work harder for you but still allow you access to it.

    You may be able to gain a better understanding of your current financial condition if you make an effort to stabilise the flow of your money as much as you possibly can; however, you must first complete this step before you can begin constructing a safety nett.

    In spite of the fact that the gig economy is typically cited as having significant negatives, there are ways that exist to provide you control over the flow of your revenue. One of these tactics is talking to customers in advance about making a deposit so that you can count on a certain amount of cash flow. When you know how little money you should budget for each month, it is much simpler to put some of that money aside, even if it is only a tiny amount, in case you need it for anything unexpected.

    2 – Keep in Mind Your Retirement

    Employees in the gig economy generally put retirement planning and considerations last on their list of priorities because life tends to come in the way of such endeavours. Freelancers and temporary workers, on the other hand, do not qualify for this benefit, despite the fact that full-time workers receive retirement benefits from their employers in the form of contributions to their superannuation funds thanks to the length of their employment.

    If you work as a freelancer, it is entirely up to you to ensure that you will be able to afford the retirement of your dreams. Even though it may not seem vital when you are focused on obtaining your next career opportunity, it is essential to plan for the period after your employment is complete in order to become financially successful.

    The amount of money put into one's superannuation account is likely to be one of the most significant financial decisions that the majority of Australians will ever make. The level of involvement you have in the process of saving for your retirement will have a significant impact on the quality of life you can anticipate in your golden years. As a freelancer, you are the only person responsible for making these contributions; therefore, you need to make sure that you account for them in your overall financial strategy.

    If the idea of planning for your retirement on top of whatever else you could be handling is too much for you to handle, you might find it helpful to seek the advice of a financial professional. This will make the process simpler.

    If you want to make sure that your financial life is taken care of without you having to be engaged in every detail, you need to make sure that you have a team by your side that you can trust. Being in charge of your own financial life might give you a sense of independence.

    3 – Form A Team You Can Trust

    It goes without saying that the state of your financial world can be challenging depending on the type of employment you have and your current financial status. It may be much more difficult to keep track of your finances if you work as a freelancer or participate in the gig economy.

    It is essential to establish a team of financial specialists, including a financial advisor, in order to ensure that every aspect of your financial world is taken care of while also streamlining your to-do list. This can be accomplished by assembling a team of financial professionals.

    Your world of finances encompasses a wide range of distinct aspects, including the following:

    • Making retirement plans
    • Investment
    • Budgeting and Cash Flow Insurance
    • Accounting and tax
    • Superannuation
    • Estate preparation

    No matter what life may throw at you, having a thorough financial plan and a committed financial advisor guarantees that you'll have a realistic path to attaining your financial goals.

    financial success

    Finding a financial advisor who takes into account your entire financial world and ambitions before making recommendations is essential, in the same way that finding the right dentist or doctor is essential.

    Your individual financial condition will be taken into consideration by the appropriate financial advisor, who will then devise financial plans that are adapted to your specific requirements and level of comfort with taking investment risk.

    In addition, we will be here to provide you with financial guidance and assistance whenever and wherever you might require it.

    4 – Consider Yourself a Company Owner

    Treating yourself like if you were running a business and making plans that are commensurate with that mindset is one of the keys to achieving financial success in the gig economy, despite the fact that this may appear to be an obvious piece of advice.

    This requires cultivating the habit of holding yourself accountable for your expenditures and making decisions that will assist you in developing over the course of time.

    In addition to formulating a financial plan, it is necessary to take the time to sit down and design a company strategy that will point you in the right direction on the road to achieving monetary security. A business strategy could comprise the following elements:

    • How do you intend to make money
    • Your areas of specialisation
    • Your available services
    • Your costs and fees

    The measures you take to get there will be guided by this plan, which will also help you comprehend your current financial condition and your long-term goals.

    5 – Long-Term Investment

    It's likely that workers in the gig economy who have a less stable income would face the same challenges when deciding which investing option is best for their circumstances. However, when it comes to investing in shares, many people are apprehensive by the usually unpredictable fluctuations that occur on the stock market.

    We at My Wealth Solutions believe that a successful investment strategy is one that is both long-term and as diverse as is reasonably possible. This type of investment portfolio is the one that has the best chance of withstanding the inevitable volatility of the stock market.

    Thankfully, this is the kind of financial strategy that works best for people who work on a freelance basis. A long-term investing approach enables you to take steps to generate and grow wealth on a steady basis over a number of years, as opposed to trying to expand your money quickly by taking unwarranted risks. This method is advantageous in comparison to the alternative.

    This is really important for those of you who are balancing a family with a part-time job because your long-term investments will give you the ability to meet the needs of your family as your wealth grows.

    6 – Declare How Much Your Time Is Worth

    Freelancers and gig workers typically have difficulty determining what an appropriate pricing for their services should be, and as a result, they may be willing to settle for less money than they should receive.

    This is not only unethical, but it may also make it more challenging for you to achieve success in the financial realm.

    If you haven't done so already, you should be sure to indicate how long each work that you might accomplish for a client might take and how much money would be a fair payment for that amount of time. If you haven't done so before, this is something that you should do.

    After that, implement this rate into your business strategy so that you can assure you are making a solid profit while yet charging reasonable prices to your clients. After this rate has been determined, you will be in a situation where you will be better able to secure a more stable financial future for yourself.

    7 – Spread out Your Income

    Once you enter the gig economy, diversifying your revenue is essential for freelancers and part-time employees to succeed financially. Even if this may come easily to you, it is necessary for the success of freelancers and part-time employees to diversify their income.

    Because labour in the gig economy is, by its very definition, temporary, it is essential to diversify your income as much as possible in order to maintain control over your finances and your business.

    However, if you want to diversify your income, you should strive to divide it over a range of businesses in addition to labour from a variety of employers. This will allow you to maximise your earning potential.

    You will be better prepared financially in the event that something takes place that could lead a certain industry to go through a difficult moment if you choose to go in this manner. Working in a number of different businesses will, in addition, provide you a greater breadth of experience, which can be a selling point when it comes to wooing new clients.

    8 – Defend yourself

    Within the context of the gig economy, suffering an injury or being faced with any other circumstance that prevents you from working can have a devastating effect on both you and your family.

    Gig workers are required to purchase their own policies in order to protect themselves financially in the event that they are involved in an accident. This is in contrast to regular employees, who are eligible to file a claim for workers' compensation and may be eligible to receive long-term disability insurance through their company.

    If you are self-employed, the language of your protection coverage is far more crucial than it is for people who have full-time jobs than it is for people who work for someone else. For instance, some personal protection policies demand that you stop working entirely for a predetermined amount of time before you are eligible to receive their benefits. This can be problematic for individuals who work in the gig economy and are attempting to maintain their financial stability because it makes it more difficult for them to access their benefits.

    Your financial advisor will be able to assist you in this endeavour by assisting you in navigating the fine print in order to identify the personal protection plan that is most suitable for you.

    Your financial advisor can also assist you in formulating and putting into action a personal protection strategy that takes into account the particulars and risks of your financial situation. This can be done with the assistance of your financial advisor. This plan should make sure that you and your loved ones would still have access to a monthly income if something were to happen that prevented you from working. If you have a personal protection plan in place, you will be able to keep your focus on running your company while enjoying the peace of mind that comes from knowing that no matter what kind of challenge you face, your financial needs will be met regardless of the situation.

    9 – Organise yourself

    Since you will most likely be paid by a variety of companies and individuals in your capacity as a gig worker, the flow of money into your bank account is likely to be more complicated than it would be if you were employed full-time. When you're juggling so many different aspects of your financial life at once, it's easy for things that could be essential to your financial success to fall through the cracks. This is especially true when you have a lot on your plate already.

    Since of this, proper financial organisation is critical to achieving success because it prevents the accumulation of numerous seemingly insignificant financial duties that could otherwise lead to a significant challenge.

    Tax time is an example of how not organising your funds can make it tough to manage them if you are self-employed or work in the gig economy. If you have an economic team already in place, you won't have to organise your financial world all by yourself, which is a huge relief. Your financial advisor can help you keep track of your income and expenses while also holding you accountable for the record-keeping you do as part of your relationship with them.

    10 – Do not wait to begin

    Life has a way of throwing even the most meticulously crafted financial plans off track, most often because your attention is divided among a number of other goals. If you don't start taking action immediately to build the road for your financial success, your good intentions are likely to remain just that.

    That's right; there has never been a greater opportunity to put these ideas into action and guarantee that you make the most of your efforts to build a more secure financial future for yourself.

    The gig economy can make it challenging for you to keep track of your finances, in addition to having an impact on other facets of your life. You do not, however, have to tackle this challenge on your own.

    Your devoted financial advisor is here to provide assistance with clarity and direction as they work with you to provide a feasible path leading from where you are now to where you want to go. Your financial advisor can instil in you the self-assurance you need to reach the level of financial success you desire, even if you participate in the gig economy. This can help you avoid falling behind full-time employees.

    Financial Planning Basics: Must-Have Personal Finance Tips

    There is a lot of talk about managing your money and mastering the fundamentals of finance. Sometimes the most sound counsel is the straightforward, time-tested advise. To manage your finances, you don't need to be a financial expert or have a large budget for outside assistance.

    If you understand the fundamentals of finance, anything is possible. We can help you achieve your financial objectives, whether they be to increase your savings, plan for the future, or reduce debt. Here are some financial fundamentals that you can use as a base for your financial plan.

    Spend Less Than You Make

    Even if this piece of advice is straightforward, it is not necessarily simple to implement. Living within (or below) your means can be challenging when bills are coming at you from all directions.

    To figure out what you're spending your money on, it's important to keep track of all of your expenses over a few months (don't forget to include credit card transactions!). using a budget for personal finances.

    financial success

    Building your savings also requires spending less than you make. This will help you in times of need and make you feel much more at ease knowing that you have saved money for unforeseen events in life.

    Pay Off Your Credit Cards Each Month

    You should pay off your credit cards each month to prevent hefty interest charges. If you keep carrying the debt over, you can spend more on interest than you did for the original item.

    For instance, if you have $4,400 in credit card debt and just make the minimum payments, it will take you 31 years to pay it off and will cost you almost $14,900 in interest, according to ASIC's Money Smart. That is an increase of $10,500 over the initial debt!

    Even if you can't completely pay off your credit cards each month, try to pay more than the minimum. Any payment is preferable to none, but it always pays off to pay off your debts quickly when you have the money to do so.

    Build an Emergency Fund

    An emergency fund is what? An emergency fund is a special savings account set up for unforeseen costs. It can be viewed as a safety net for unforeseen expenses, such as auto repairs, job loss, and other situations.

    Since it is difficult to predict the future, the best course of action is to always be ready for anything. If you don't have an emergency fund, your only options are to cut back on your spending or incur debt (by using a credit card) to pay for these expenses.

    A dangerous road to financial difficulties, that!

    How can an emergency fund be created? Open a unique, high-interest savings account first. After that, arrange for automatic payments to be made each month once you have been paid.

    Although some experts advise having three to six months' worth of living expenses saved up, you don't have to. Once you've met your desired goal, think about contributing a lesser but regular sum from your monthly savings to your emergency fund.

    Make a Monthly Budget

    The basis of your financial situation is your budget. Before creating a budget, you must examine your income, expenses, and debts. How do you divide up your monthly spending? Do you still have money after paying your debts and fees? If not, you should make some changes to your budget.

    You will have a clear path to achieving your financial objectives once you have a budget in place. You may start saving now rather than expecting you'll be able to in the future. You can start setting money aside for your financial objectives, such as retirement savings, an emergency fund, and a holiday fund.

    Pay Down Your Debt

    One of your top goals for managing your finances should be paying off your debt. You are burdened by your debt and cannot contribute to your financial future.

    Understanding how to efficiently pay off your debt is one of the essential fundamentals of finance. Make sure to spend more than the minimum amount while paying off a credit card to avoid paying exorbitant interest fees. The same is true for any other debts you could have in addition to your mortgage. You'll quickly reach your debt-free goals!

    Save for Retirement

    Have you considered the amount of money you would require to retire? If not, when? Even though it can seem far off, it's never too early to begin making plans for your senior years.

    Every pay stub for an Australian includes 9.5 per cent superannuation. However, depending on how much you've already saved, you might want to consider saving 10 or 11 per cent. Maintaining your retirement funds will ensure that you are on the proper path to achieving your future objectives.

    Look at your superannuation fund and estimate how much you would have when you reach retirement age, which is now 65 but will increase to 67 in 2023. This will help you understand the situation better so that you can start making changes for your future self.

    Get Properly Insured

    Even though it's simple to forget, ensuring sure you have enough insurance is a crucial financial fundamental. A necessity is an insurance. If you don't have enough insurance, losing your job or having a house fire might ruin your life.

    Along with saving money for emergencies, insure your finances with life, income, mortgage, or renters' insurance. This can occasionally be the difference between a minor setback and financial ruin.

    Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

    Be Consistent With Your Finances

    When it comes to money, consistency is your friend. Once you've established some sound financial practices, try your best to maintain them. It's very normal to veer off course occasionally, but sticking with your strategy over the long haul will drastically improve your financial situation.

    Financial success is all about balance, perspective, knowledge, values, and how you define what is most important to your happiness. For some, the idea of “more” holds a level of allure and enticement that will motivate their actions to make more money and surround themselves with the trappings of wealth.

    1. Step One: Find The Balance.
    2. Step Two: Set Intentions And Priorities.
    3. Step Three: Focus On What You Can Control.
    Financial success is important because without enough money and financial resources. Life can be very difficult. Since it's no fun to live paycheck to paycheck. And worry every month about having enough money to pay the bills.
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