One of the most difficult things about losing your job is the financial pressure it brings. Most people do not have enough savings to maintain their current lifestyle under the circumstances of a job loss. This is where planning ahead can really be beneficial. Unfortunately, job loss can strike without warning. As outlined in my last article, there are certain rights and benefits for those under a notice of redundancy. These serve as financial protections to get you through the rough financial time ahead until you can become successfully re-employed. Here are a few tips on how you can make the most of these resources.
If you have qualified for the maximum SRP, you will receive a lump sum of £12,000. If you would like to calculate your potential SRP payment, check out the current SRP formula. Most workers will not receive even close to this amount, so it is important to make what you do receive stretch as far as you can.
You may want to think about paying ahead on critical bills and necessities, such as mortgage or rent payments, utilities and even automobile payments. It’s much less stressful if you know these items are covered for a period of time. You don’t have to try to come up with funds at the last minute to try to keep a roof over your head.
It is also important to immediately notify your creditors of your upcoming job loss. Find out early if there are any programmes available to help you get through the redundancy. Some lenders may allow you options to defer a certain number of payments or make reduced (interest-only) payments for a period of time.
Cut your spending. If you’ve planned ahead, you already know which items you can cut or reduce. If not, it’s important for you to identify every item of spending you can eliminate (dinners out, holidays/travel) and then identify those you can cut down (petrol, child care, electricity). It is important to recognise that unless you have significant savings available, you will be unable to maintain your current lifestyle for very long. By cutting back, you will make the situation bearable for a longer period of time and lower the stress involved, knowing that many of the essentials are covered.
Finally, don’t completely eliminate the ‘extras’ from your budget. A significant part of conducting a successful job search is maintaining a positive mental attitude. If you strip your life bare of all non-essentials, it may diminish your confidence, happiness and self-esteem. Additionally, you will still need those haircuts, manicures and perhaps new clothes to maintain your appearance for interviews. Keeping yourself looking nicely groomed is essential and not a luxury.