Being made redundant can be both an exciting and yet difficult time in your life.
It is exciting because most people see the $$ signs and think life will be wonderful. The windfall can open new opportunities previously unavailable due to having money on hand and the gift of time.
However, it can quickly turn into a difficult time if not managed correctly.
Here are some points for consideration to sort out your money and your future when you are made redundant.
Make a Plan
1. Consider how long your payout will last with your current expenses.
2. Look at your budget to see if there are some areas in your life that you can minimise spending until you have a new job.
3. Consider paying off that pesky credit card debt (if you have one) or any other high interest loans.
A redundancy can give you the opportunity to re-consider your employment. It may help to ask yourself these questions:
1. Do you want to remain in the same profession or industry?
2. Do you have time to pursue a short course?
3. Do you want to retrain and start a new career?
4. Can you retire earlier as the result of receiving a redundancy package?
Returning to Work
Many people underestimate how long it can take to get a new job.
Whatever time frame you think, double it is a good rule-of-thumb.
Finding a new job often comes with relief. This can be the time to decide what to do with any money left over. Options include:
1. Paying off debt
2. Maintain a savings account
3. Invest in income producing assets such as property and / or shares
4. Contribute more to your superannuation to boost your retirement
Being made redundant can be an exciting time due to a financial windfall.
It can also be a difficult time particularly if it takes a while to re-enter the workforce.
It’s important to keep a level head and plan as much as possible so that you make the best of what you have. A positive attitude will show through in job interviews and seek professional financial advice if you think you need it.
Dean Mico is a qualified financial planner. Contact Us if you want professional financial advice in the best interest of your circumstances.
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.