Vikas Modgil at Knowledgebank IQ | 07 October 2014 | Financial Planning

What to do if you lose your job

Losing your job or being made redundant can be a stressful time. Not only can it affect your career, but it can affect your health and personal relationships

Aside from looking after yourself, knowing where you stand financially and ensuring your finances are sorted out for the next two months plays an important role in clearing your head so that you can make better decisions moving forward. 




Things to look at might include the following: 

  • Budgeting
  • Debts
  • Government Benefits

 

Budgeting

It is highly likely that your spending habits will need to be reviewed, working out what expenses still need to be paid and what you can do without. If required, there are a range of online budgeting tools. One is freely available on the Australian Securities and Investments Commission (ASIC) website at www.moneysmart.gov.au
 

Debts

Managing debts can particularly be a concern for individuals where there is a large mortgage and/or credit card bills in place. 

One common strategy is to consolidate debts (where there is more than one) into the loan with the lowest interest rate. For example, any outstanding credit card debts might be paid off from a home loan that has a re-draw facility helping to reduce any expenses.

Another strategy might be to consolidate multiple credit card debts into just the one card with many providers offering low interest rates in the short term (usually known as a 'honeymoon period'). This will give you a short period of time to get your affairs in order as the full balance would ideally need to be paid prior to any “honeymoon” period. 

Where it looks as if there may be a serious budget shortfall, it may be worth talking to your lenders, especially if they have security over your home, car or other assets. Advise them of your situation and that you wish to discuss repayment arrangements. 
 

Government Benefits

One option is to talk to the Department of Human Services, commonly referred to as Centrelink, to find out if you may be eligible for any government assistance such as the Newstart Allowance or family benefits. Their website can be found at www.humanservices.gov.au

Losing your job or being made redundant can be a stressful time for many individuals. However, for those that take care of themselves and spend the time looking at where they stand financially and planning ahead, the time off from work can be a time where goals can be re-assessed and/or additional skills acquired through training so that new opportunities may be created.

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