Optimize your work-life balance: Work Less and Be Financially Strong

In today's society, finding a balance between work and private life is an increasing challenge. Still writing that email, or responding to a colleague on the weekend. Many people are considering working less or organizing their work differently because of this, among other things. 

This article briefly offers a number of insights and practical tips on how to approach this and remain financially strong at the same time.

Working Less or Differently

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 complaints and even a stronger immune system. You have more time for relaxation, exercise and healthy choices. In addition, it provides more time to be with your family or loved ones and it strengthens creativity and productivity at times when you are working. 

All these benefits sound great, but how do you approach this without jeopardizing your financial security? Because without security, you'll still end up disappointed. 

1. Calculate the Financial Consequences

It is essential to get a clear picture of the financial impact of working less. Make 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 schemes. Use tools such as the buffer calculator to see how much buffer you need. 

2. Discuss it with your Employer

Transparent communication with your employer is crucial. Explain why you want to work less and discuss the options, such as flexible working hours, part-time work or a sabbatical. Many employers are open to such discussions, especially if you can demonstrate that it benefits your productivity and well-being.

3. Career switch or Sabbatical

If working fewer hours within your current position is not possible, consider a career switch or a sabbatical. A career switch can offer you the opportunity to find a profession that better suits your needs and desires. A sabbatical can give you time to reorient yourself and invest in personal development.

Financially Empowered

Mothers in particular who want to reduce their working hours can benefit from specific financial strategies. It is important to get a grip on your finances and ensure that you are independent and confident. It is also very important because according to recent statistics, women lag behind in both their pension knowledge and accrual. Not useful if you want to be confident later in life. 

1. Budgeting and Saving

A good budget is the foundation of financial stability. Make a detailed overview of your monthly income and expenses. Look for savings opportunities and set realistic savings goals. Automatic saving can help to regularly set aside money. 

Automatic saving is a powerful way to achieve your financial goals, especially because it taps 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 barrier to taking action and ensures that saving becomes a habit.

In addition, automatic saving eliminates the temptation to spend money as soon as it is in your account. You simply don't see the money, so it feels less like you're 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.

2. Planning Financial Goals

Set short- and long-term goals for yourself (and your family). This can range from building an emergency fund to saving for a vacation 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 to visualize your goal and take small steps. This way you have your goal clearly in mind, for example a long vacation, or an education. And through the small goals you get the chance to win a victory every time. 

But what about stopping earlier?

Retiring Early

Many people dream of retiring earlier, but this requires careful planning and preparation. It is important to know how much income you need to live comfortably without working.

1. Calculate income sources

Calculate your expected pension benefits and additional sources of income, such as savings, investments or part-time work. Make sure you have a realistic view of your future financial situation. Use tools such as the Pension Pie Chart to determine a good amount to set aside.

2. Being financially prepared

Building a solid financial foundation is crucial. Ensure you have sufficient savings and invest wisely to maximize your income. Consider speaking with a financial advisor to optimize your pension planning. Discipline is important here; set up automatic transfers to regularly save for your pension and take advantage of tax benefits. 

Being Financially Prepared: Further Details

Building a financial foundation goes beyond just saving. Here are some detailed steps to better prepare you:

1. Automatic Savings Plans: Set up automatic transfers to your savings or investment account as soon as your salary comes in. This helps to save consistently without having to think about it.
2. Investment strategies: Consider investing a portion of your savings. Investing can yield more in the long term than saving, despite the fact that it involves more risks. Use investment instruments such as index funds or ETFs to build a diversified portfolio.
3. Use Tax Benefits: Take advantage of tax benefits such as the annual allowance and unused annual allowance to build your pension in a tax-efficient manner. The money you transfer to your pension pot is often tax-deductible, which means you get a portion of your contribution back from the Tax Authorities.
4. Financial Planning: Use financial planning tools and apps to get a detailed picture of your financial future. Tools such as the 'Pensioenschijf-van-vijf' (Pension Wheel of Five) help you to better estimate your future expenses and income.
5. Buffer: Build up a buffer that is sufficient to cover at least three to six months of your fixed costs. This provides a buffer for unforeseen circumstances such as job loss or emergencies.

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 balance between work and private life, while maintaining financial security.