More and more professionals are embracing Australia’s gig economy, but at a significant financial cost. Amongst millennials in particular, freelancers, contractors, and small start-ups are exerting a growing culture that places emphasis on autonomy, flexibility, and the desire to upskill through sought-after variety.
A recent study highlighted a vast trajectory in numbers of remote workers, with the average respondent’s age at 32 years. Fifty percent of respondents earned under $49,000 per year, with twenty five percent in the $50,000 – $99,999 range, showing a clear gravitation from those in lower and medium income brackets.
Further, as the business climate becomes increasingly competitive, business agility and the need for programmes to execute innovation, means a rise in project-based work; that, combined with an online landscape that is heavily content driven, has resulted in a rising need for short-term marketing, communications and engineering labour.
As exciting as it is, the downside to the gig economy are factors such as paid leave, benefits such as health insurance, as well as tax and superannuation, are often inaccessible or neglected, resulting in financial turbulence. Beyond that, other things like building wealth through property investment remain a precarious task, particularly if financial management to date presents as disorderly.
Aside from the impact, this has on an individual’s livelihood and wellbeing, at a higher-level the potential repercussions from a socioeconomic perspective are alarming. But it needn’t play out that way.
Modern Approaches to Work Needn’t Result in Financial Loss
It’s commonplace for freelancers, sole traders and small business owners to prioritise the implementation of a business plan, only to leave their financial planning by the wayside.
Yet, financial counsel for striving millennials and young professionals is surprisingly inexpensive in comparison to the costs saved from strategising – even over the course of one financial year.
Superannuation is one of the biggest areas of concern for professionals with a more fluid and modern approach to work life. That said, there are some basic measures that can be adopted such as choosing the right fund for investment purposes, making consistent contributions, and taking advantage of concessions and government incentives.
A financial adviser can review your specific situation and present you with viable superannuation options, which can make a huge fiscal impact over a short period of time.
Tax is another factor that, when planned and managed correctly under sound advice, can be relatively confusion-free. We all know at least one sole trader that’s been hit with an unexpected tax bill in the absence of pre-empting and managing their tax accordingly. Don’t let this be your story.
Without the safety net of paid leave afforded by a conventional employer, those harnessing the gig economy benefit greatly from income protection and trauma insurances. A good financial adviser will present various options from a holistic viewpoint, factoring in your income, cash flow, lifestyle, and dependencies.
Embraced innovation and real-time communication tools aren’t reserved solely for marketing and scaling your business up – such inventions should also be leveraged when it comes to financial management and collaborating between stakeholders such as your adviser and/or accountant.
And with the rise of fintech and automation, streamlining and simplifying the way you manage your financials is more achievable than ever before.
Financial Adviser Or Accountant?
There is some cross over between financial advisers and accountants, and both tend to collaborate on some level. In short, a financial adviser’s role is to review, strategize and advise on and/or implement things like superannuation, income protection, and budgeting and cash flow strategy.
A good accountant will help with things like business structure (eg. Company or sole trader), bookkeeping, tax planning and governance, and general business activity reporting.
Both of these stakeholders are paramount to ensuring your finances are in good shape and you are able to not only manage your money effectively but also achieve your financial goals regardless of the nature of your working life.
Should you require more information on any of these topics, please contact us today on 1300 354 355