Taking control of your finances when you’ve been made redundant

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If you have been made redundant, it’s important to take action so you can protect the lifestyle you’ve worked hard to achieve. Depending on the size of your redundancy payout and your current savings, you may want to reduce your spending to help see you through until you secure another position.

MAKING THE MOST OF YOUR MONEY

You could consider depositing your redundancy payout into an online savings account or a cash management account. This may give you the potential to earn extra interest while you determine what to do with your redundancy payment longer term. There are also other choices you could consider. It may be worth speaking to a financial adviser who can explore these with you.

WATCH YOUR BUDGET

It may take some time to find a new job. So it’s a good idea to plan how your finances will see you through to re-employment. Get in touch today to get help understanding what you spend and identifying areas where you can cut back.

YOUR MORTGAGE AND OTHER DEBT

Some people use part of their redundancy payment to pay off debts like their home loan, personal loans or credit cards. But take into account how long you may be out of work and how much money you will need to cover your expenses over this time. If you do put some money towards your debts, you may want to pay off those with higher interest rates first such as credit cards.

MANAGING MORTGAGE REPAYMENTS

Keeping up your monthly mortgage repayments when you’ve lost your income is often a priority. Contact your lender to talk through your options if you’re concerned you may be out of work for some time and you’re worried about paying your mortgage. Delaying or restructuring your repayments, extending your loan term, switching to an interest only option, or using your redundancy payment in a mortgage offset account may be options to help you manage your financial situation through this period.

REVIEW YOUR EMPLOYEE BENEFITS

You may need to make decisions about your life insurance and super contributions. Your super may be affected in ways you may not have anticipated after you leave your employer:

  • You may lose some or all of your insurance cover when you are made redundant. So check to see if insurance continuation options are available if it looks like you’ll lose your cover when you leave your current role.
  • You may not be able to claim against your salary continuance, income protection or TPD policy if you are injured or ill while you are out of work. If you’re made redundant, check with your insurer to find out how your policy is affected.
  • You may lose your employer benefits or any fee discounts.
  • Your super contributions from your employer will cease.

Check with your super fund for more information about how your superannuation benefits might be affected.

SEEK PROFESSIONAL FINANCIAL ADVICE

You may also want to consider seeking financial advice to help you make informed financial decisions in times of redundancy so you can continue to reach for your long-term financial goals.

Wealthness Pty Ltd ABN 13 231 248 112  [t/a Better Financial Planning Australia]  is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL No. 236523. It is important to be aware that Better Financial Planning Australia is not authorised by Infocus to provide advice relating to credit services or property advice. Infocus is not responsible for any advice outside of the scope of this authorisation and should you wish to act on any of this general information, please first seek professional financial advice.

Wealthness Pty Ltd t/as Better Financial Planning Australia will endeavour to update the website as needed. However, information can change without notice and Wealthness Pty Ltd t/as Better Financial Planning Australia does not guarantee the accuracy of information on the website, including information provided by third parties, at any time.

This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission.

Wealthness Pty Ltd t/as Better Financial Planning Australia does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this website. Except insofar as any liability under statute cannot be excluded, Wealthness Pty Ltd t/as Better Financial Planning Australia and its employees do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person.

Wealthness Pty Ltd (ACN 613 313 250) [t/a Better Financial Planning Australia] Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL Licence No. 236523.

Source: BT

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