The last four years have seen some pretty uncertain financial times for many Aussies. Most of us will know something of redundancy either through friends, family, colleagues or even personal experience. The inconvenient reality is, it can also affect more than your career. Guest writer Peter Wood, provides some practical insights on coping with redundancy.
Redundancy or loss of employment can leave you in a spin wondering what to do next while also affecting your wellbeing and relationships. However, before it becomes too overwhelming, there are a few areas you can address as you step back and assess the situation to help plan a new financial path.
Bolster your savings position
RaboDirect’s National Savings and Debt Barometer recently found that 46 per cent of working Australians fell short of being able to survive more than a month without employment. Meanwhile, ASIC advises that planning on how to pay for the next two months of living should begin immediately.
This means many people don’t leave themselves enough time to get back on their feet before debt collectors come knocking at the door. Savvy savings account users would already be channelling a portion of their income into a high interest account. If you remain safely in employment, these emergency funds could later lead be channelled into investment.
Paying the mortgage
If you do lose your job, talk to your bank as soon as possible to ensure you are in a better position for organising a repayment plan. Even something as simple as switching to interest-only repayments for a short period could alleviate some mortgage stress between jobs.
In line for a big payout? Open a mortgage offset account immediately. That way, any idle funds will effectively be paying off your debt while still allowing you to access them as you need to.
You could even investigate your eligibility for mortgage relief, often available for up to 12 months. If you believe your bank fails to assist during financial difficulty, contact the Financial Ombudsman Service.
Careful payout planning
When it comes to those payout “windfalls”, our financial instincts are often to close looming debts, cut a chunk out of your mortgage or funnel funds into superannuation. Firstly, consider how far off that new job might be or whether you will be waiting for any potential Centrelink benefits. If you put money into a debt or even a super account, it could be great for your future but leave you short now when you need it most.
Quickly get past any embarrassment
The sooner you deal with redundancy, the better you will be at reassessing your career or reaching out for prospective opportunities. You are better off focusing your attention on the future, registering with recruiters and ensuring LinkedIn profile resumes are brought up to date.
Depending on your field, it could be better for your network to know you are available than to sit idly. And you need to be able to spread the word with a positive approach that you’re looking for work.
In this day of shifting fields and changing careers, your friends, colleagues and recruiters are the best networks you have. At the same time, there is a wealth of financial information and advice available for those who want it. Just remember to seek it out early.