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:
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.
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.
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.
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 🙂
- 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.
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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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.