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Surviving Redundancy

written by Shelley Marsh 22/10/2014
Redundancy

I think I am in a pretty unique position to write about redundancy.  You see, I have been made redundant twice during my career and my hubby was made redundant at the start of 2014.  So a score of 3 for our family so far.  The first time I was made redundant was in 2004, when the British hedge fund I was working for packed up its Australian office and moved back to the UK.  One minute we all had jobs.  The next minute none of us did.  The model we were trading off hadn’t been performing, so we kind of saw it coming.  Even then it was a shock.  The second time I was made redundant was in 2012.  It was my 39th birthday and I was 11 months in from my return from maternity leave when I was taken into the little room and told my services were no longer required.  I was told it was cost cutting.  Enough said.

Redundancy is a stressful time and can be a time of really powerful, often very mixed, emotions.  Most of the time it is a shock.  It changes everything and throws you onto a completely different path that you did not see coming.  Given we have been through it a few times in our household, here are some of my tips on how to not only survive redundancy moneywise, but come out of it better and happier than ever….

Let’s start on the money front:

  1. Figure out what Centrelink benefits you qualify for:

    I am not just talking about Newstart, but it is handy to know what you have to do to qualify for this. In our case, when my hubby got made redundant and with me working only 3 days a week, we all of a sudden qualified for the Family Tax benefit A & B and the Childcare benefit (the means tested one).  Now you know how much income you are getting from the redundancy you can change your income estimate in mygov and contact Centrelink and see what they say.  You might also find the Centrelink payment calculator useful.  Click here to see it.  Getting these extra payments have helped to cushion our finances during this time.

  2. Think about what to do with your lump sum payment

    Depending on your terms and conditions and how long you were employed for you can get a decent pay out. Now I cannot tell you what to do with yours, if you want specific advice you should see a financial planner, however, for us we have always made sure that our payments were readily accessible, as you never know how long it will take you to find another job.   Since we have a mortgage we put redundancy payments into our mortgage offset account.  It helps to pay off the mortgage but allows us to easily access to the cash.  Click here to see how an offset account works.

  3. Create a budget

    If you haven’t done one, click here and see how to. If you have done one, your redundancy means it is time to change it.  You would be surprised how many of your costs can disappear, lunches at work, travel costs, uniforms or clothes.  We have found ourselves eating out less as we have more time to prepare, plan and cook meals at home.  Also while you have the time, review your expenses.  For each expense figure out whether you really need it and if there is a way to do it differently that will save you money.  For example I rang around our insurance providers to make sure we were getting the best deal.

  4. Check your insurance in your superannuation fund

    I had income protection and life insurance in my superannuation. When I checked the terms and conditions on my insurance as it turns out my income protection insurance was no longer valid on my redundancy.  So I cancelled it.  I am sure they would have merrily collected the premiums but not paid out should I claim while I did not have a job.  So check your terms of your insurance and see if your redundancy makes a difference.  Just remember to put your income protection insurance back on when you get another job 🙂

  5. Think broadly about your skill set and what you might be able to do
    I was a stock market analyst for 17 years, now I blog and train social workers about money. Quite different in many respects but I love how I am using my knowledge-base in a completely different way.  You don’t have to do what you have always done.  You have a wonderful skill base.  Think about how it might be used in a totally different way.  I promise you that you won’t regret it.
  6. Ride the emotional roller coaster

    Being made redundant is an emotional time. You might feel angry, you might feel lost (even if you hated your job), you might feel rejected.  On the days that you feel those emotions know it is perfectly normal.  Redundancy is a big change, it will come with hiccups.  I know it is really hard but try not to take it personally.  Businesses are big machines and they will roll over you if deemed necessary, no matter how good/loyal/hard-working you are.  Rest assured that it is not your fault.

I don’t regret my two redundancies.  They were gifts in disguise and have led me to do things that I would never have dreamed I would be doing.  My last one has allowed me to take a job that gives me more time with my precious daughter and to work in an area I am hugely passionate about and find deeply satisfying.  I finally have a job that makes a real difference.  And, well, you would not be reading this right now without my redundancy as Money Mummy would not exist.  Let’s just say I am not a very good housewife, so created Money Mummy so I had something to do during my redundancy-induced time off :-)!!  Good luck on your redundancy journey, you will be amazed where you will end up.  However, when you are feeling low please repeat after me “One door shuts, another door opens”.  It worked for me :-).

Have you been made redundant?  What are your tips for surviving it?

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Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice.  Please see your financial advisor for advice specific to your individual circumstances.

 

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19 comments

Lydia C. Lee 24/10/2014 at 7:14 am

Great post. I would also warn people not to dismiss how HUGE the emotional side is, and how long that can take to recover from. I would recommend seeing a counsellor ASAP, and continue until well placed in a new job. I don’t think people really understand what a big shock to the system/ego it is, even if, as you say, you hated the job.

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Bek @AuthorRebeccaMugridge 24/10/2014 at 7:27 am

This is a really helpful post indeed. My uncle was just made redundant after 36 years in his job, a shock to the system and a confusing time at his age too.
I’ll be sure to pass on the link for this great article X

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Cam @ Gen-Y Mum 24/10/2014 at 8:28 am

I too was made redundant twice. Both times I personally was happy about it because I was unhappy at my jobs but its funny how there’s a bit of a stigma with redundancies?

I’m yet to return back to the work force since my second redundancy because I’ve had a child since but I don’t want to go back to what I use to do. Could you share some tips or your personal experience of moving from stock market background to working with social workers …. when you have time of course.

Great post very informative and thank you for sharing that link to find all government entitlements

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Kirsty @ Smarter Happier 24/10/2014 at 10:17 am

I’ve just been made redundant myself and wrote a post last week with the exact same title – obviously great minds think alike! http://smarterhappier.com/5-strategies-cope-redundancy/ I agree with all your points – it is important to see it as an opportunity not as the end of the world. As long as you take the time to plan and understand what you are entitled to, it could actually be the best thing that ever happens to you 🙂

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Shelley Marsh 02/11/2014 at 8:51 am

Hi Kirsty, yes great minds think a like!!! I have shared your post on my facebook page. It is great to have a different perspective on these things. It is scary how common it is becoming! Good luck on your journey and I look forward to reading more about what you get up to next! 🙂

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Jody at Six Little Hearts 24/10/2014 at 10:42 am

Great post!
My Husband was made redundant just after the financial crisis. It was the biggest blessing ever! (Though very unpleasant at the time.) We scored a $20,000 payout and then he found a new job just 48 hours later on even better pay! Cha-ching!
We took a nice trip to QLD and used the rest towards our home deposit! Couldn’t have been happier about it all. Hopefully anyone reading this in the same boat will get a pick up doing so – one door closes and an even better one opens. 😀

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Shelley Marsh 02/11/2014 at 8:48 am

Hi Jody – a new job within 48 hours! That is awesome work!! Well done!!

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Vanessa 24/10/2014 at 11:43 am

Sadly, I’ve never been made redundant. And that probably sounds weird to put it that way. Earlier this year I finished working at a place that I had been for two years – most staff were permanent (frankly, even when they shouldn’t have been) but I was hired as a contract worker through an agency. Which meant that while all these other people got payouts and could relax (relatively speaking) about finding a new job, I was a bit more out on my ass and had to scramble to find any work as soon as possible.
Don’t get me wrong, I’ve learned things by being contract that I probably wouldn’t have otherwise, and that’s great, but at the end of a contract I guess I have lingering jealousy that people who are effectively the same as me have a payout, and I don’t.

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Shelley Marsh 26/10/2014 at 5:33 pm

Hi Vanessa – no I totally understand that. A redundancy payout can be great as it gives you time to find other work, a luxury you don’t get when a contract comes to an end. My current job is a yearly contract so if that comes to an end next October I will have to scramble to replace my income 🙁

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Jo 02/03/2015 at 8:56 am

I’m in the same boat Vanessa, my partner and I have spent the past three years working for a family owned business before being made redundant last week. As they employ less than fifteen people they don’t need to give us a redundancy payment. As our house is part of our job we also need to find somewhere to live within the next month. So no home, no incomes and no redundancy payment. We are lucky that we are not in debt however, I can see that this would be possibly even scarier for people with big mortgages.
It is a difficult time (that we are only at the very beginning of) the job application process moves very slowly and it seems that you can be #1 candidate one minute and passed over the next. We have been looking for another job on and off for the last twelve months prior to this happening so it’s not that we will be sad to leave, just concerned with finding a new job quickly.
It’s good to read posts like his one for some guidance as to how to proceed through this time.

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Shelley Marsh 05/03/2015 at 9:06 am

Hi Jo, thanks for stopping by my blog. I am glad you found my post useful. Good luck on our journey and I hope you and your partner find new jobs soon. Shelley

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Emily @ Have A Laugh On Me 24/10/2014 at 6:01 pm

This happened to hubby 6 weeks before Xmas last year and it was very freaky. Luckily he got a start again quickly but it’s a scary position to be in, I’m sure this post will help those in this position

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Shelley Marsh 26/10/2014 at 5:30 pm

Hi Emily, that is harsh being made redundant before Christmas. So glad a start again quickly.

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Grace 27/10/2014 at 3:11 pm

I’ve been made redundant twice too! The second time was extremely harsh and oh my, that emotional roller coaster was a tough one!
But in the end, I do think they’re blessings in disguise.

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Shelley Marsh 02/11/2014 at 8:47 am

Hi Grace, yes I agree that they are blessings in disguise. Though you are right the emotional roller coaster is something else!!!

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Lisa Wood 27/10/2014 at 5:28 pm

I have never been made redundant from a Job – but have had friends and family who have!
Its stressful money wise at first but then in the long run they seem to find better jobs.
The mortgage off-set account is a great idea, we used to have one when we had our House and it kept the interest rate down low.

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Shelley Marsh 02/11/2014 at 8:46 am

Hi Lisa, yes redundancy can be a stressful experience. I have always tried to look at each one as an opportunity to do something different. As they say one door shuts another opens!

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Larissa @heylittlespender 11/11/2014 at 7:31 pm

You’re so right that redundancy can be a gift in disguise – even if it doesn’t seem so at the time. I haven’t officially been made redundant, but I once lost my casual job with only two weeks’ notice. While it was a casual job, it was my foot in the door at my dream gig, and I’d been working four to five days a week there for a couple of years. I was really quite devastated and took it personally – way too personally in hindsight. Being single, I wondered how I was going to pay my mortgage if I didn’t find a job within a couple of months.

Luckily I already had a trip planned to Cambodia, and that put things in perspective. I realised even if everything went to mush, I still had people that would look out for me, and I could still find jobs that made me money. Funnily enough, my workplace asked me to come back two months later, but after landing a full-time gig there, a few years later I made the decision to go freelance. I think that losing that initial job was the thing that gave me the courage to do it, because I knew I was more resilient than I thought, and that there were quite a few opportunities out there if you looked hard enough.

So my tips would be: try not to take it personally (it’s probably just a financial decision and likely doesn’t have anything to do with you or your skills). After your initial panic, sit down and work out what you can cut back on while you find another job. Maybe you can put your mortgage on interest only, or get a flatmate, or rent out your spare room on Airbnb. There’s heaps of stuff you can do to save money while you’re finding another job.

Or if you have a bit of money to spare, maybe you could take a well-earned break, even for a long weekend, and get your thoughts in order (and just have some time to wind down). It might actually be a good time to fulfil a dream such as going travelling overseas for a stint. Or you might want to train in something else and try something completely different.

But from my experience, I would say try not to let it dent your confidence, and just get out there and start talking to people who could potentially give you work. Go for coffees, update your LinkedIn profile, tell all your friends and maybe even post something on Facebook saying you’re available. You might be surprised what comes back, and you could even start your own business. Good luck if anyone is in this position!

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Mel 24/10/2016 at 10:14 pm

Thank you so much for this blog, my position has recently been made redundant and I am also 7 weeks pregnant (cue mild freak out)! I have never been unemployed so its all new territory for me, Im excited but anxious at the same time about the uncertainty of the future!

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