Depending on the size of your redundancy payout and current savings, you may want to consider ways of reducing your spending to help see you through.
Drafting a budget is a useful step here. It will show how much you can afford to spend each week based on your payout and other savings and also show areas where you could trim spending to make your money go further.
Leave your credit card at home when shopping. This makes it harder to overspend.
Think about whether you really need a purchase – redundancy is no time for impulse buys.
Delay the purchase of big ticket items where possible – you don’t know how long it could be before you land another job.
The Commonwealth government offers financial support and job-seeking assistance if you have been retrenched or your job has been made redundant. It makes sense to see what assistance you may be eligible for and apply at an early stage as it could take several weeks for payments to start flowing.
In redundancy, more so than at any other time, it is critical to manage your money wisely.
To make the most of your money, you may like to consider depositing your redundancy payout into saving accounts such as an online savings account or a cash management account. Here it can potentially earn extra interest while you determine what to do with your payout. Then refer back to your newly revised budget to see how much of your savings you need to dip into each week or month to make ends meet. This will give you an idea of how long your savings will last.
Having your job made redundant can be a cue to speak with your financial adviser. It can help you get a clear picture of where you stand financially and make informed financial decisions so you can continue to reach for your long term financial goals.
It can be tempting to use your redundancy payment to pay off debts like your home loan, personal loans or credit cards. But you may not know how long you could be out of work so it pays not to use all of your payout to clear every debt.
If you’re ahead with your loan, you may be able to take a small break from repayments. Or, it can be worth paying off those debts with higher interest rates first such as any high interest credit cards you have.
However it is a good idea to contact all your lenders and let them know what has happened. Some could offer a revised repayment plan that reflects your ability to pay until you land another job, or extend your loan term or let you deposit your redundancy payment in a mortgage offset account.
If you find yourself out of work for an extended period, your financial wellbeing may start to suffer. The good news is that there are plenty of free or low cost financial counselling organisations that can help you get back on your feet financially and even speak with creditors on your behalf to arrange more suitable repayment options.
When you’re in the market for a new job, it pays to leave no stone unturned. Take your time to draft a knock-out resume (and be prepared to fine-tune it for individual roles you see advertised.)
List your name with recruitment agencies, get in touch with your professional network and let contacts know you are looking for a new role. Pick up the phone to speak with past clients or customers who may have a position suitable for you. Plenty of great jobs are not advertised so don’t be embarrassed about contacting people you know to explain your availability.
While you are looking for a permanent role, consider interim, contract, or temp jobs. These days interim employees or contractors are hired for anything from the most junior roles through to executive positions and project-based jobs. Consider registering with a recruitment agency that has a strong interim or contract employment division to see what is available for your skill set.
Sometimes having your job made redundant can spark a desire for a new direction. That’s not always a bad thing. It could be the start of a new business venture, an opportunity to study and learn skills to embrace a brand new career, or you may want to set up your own consultancy or work freelance within the industry you were a part of.
Your redundancy payout could provide a source of upfront capital for the venture. Allocate part of your payout for money to live on as it can take time for a small business to become self-funding.
Working for yourself can be a success both financially and in terms of personal rewards. Just be sure to do plenty of homework, and be prepared for lots of hard work, to ensure your new venture is a success.
After you leave your employer, your super could be affected in ways you may not have anticipated. You could lose some or all of your insurance cover when you leave employment, so contact your fund to check if insurance continuation options are available to you.
Depending on your insurance arrangements, you may not be able to make a claim on your income protection insurance or total and permanent disability (TPD) policy if you become injured or ill while you are out of work.
Your super contributions from your employer will cease once you leave your job. Check with your super fund for more information about how your superannuation benefits might be affected.
Losing your job can be a major source of stress. Make an effort to take care of yourself – maintain an active lifestyle and a healthy diet. Your next brilliant role could be just around the corner.
This information is current as at 15/08/2016.
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.
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