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Managing your Money in Redundancy

by James McGregor

If you are made redundant then you can find yourself suddenly without an income and with very little notice to be able to plan. This can be very difficult but there are things that you can do to make it easier to manage the money that you have, until you get a new job. As you do not know how long you will be without work, it is wise to make sure that you are extremely careful until you actually start a new job. 

Find Out How Much Money You Have

It is a good idea to start by finding out how much money you have. This will help you to know how much you can afford to spend. You may have some savings and you may get some redundancy pay and this could help to keep you going while you look for a job. The more you have, the more you will be able to spend. However, you will not know how long you will be out of work and so you still need to be very careful with spending money. Once you have had a look to see what jobs are available and considered how likely you are to find a new job, you will be able to more easily guess how long it will take you to get an income coming in again. 

You may also have other means of income, such as interest on savings or investments or other people in the household earning. You will be able to calculate whether you will be able to manage that money, or whether you will need to cut back significantly. This will depend on what you normally spend and looking at your bank statements to see what outgoings you have, will help you to calculate this. 

Investigate Benefits

It is worth checking to see whether you will be able to claim any benefits. This will depend on what money you have in savings as well as your household income, so if someone else is working or you have income from other sources, such as investments, you may not qualify. It is worth investigating though, just to make sure that you are getting everything that you are entitled to. You will be able to look on the government website or get in touch with the citizens advice bureau for help.

Only Buy Necessities

It can be a good idea to only buy things that you really need. This means things like loan repayments and bills as well as food. You may need to pay to run your car to ferry the family around or to get to job interviews and for clothing, toiletries, things for other family members etc. However, it is worth making sure that you are not spending money on things that you do not need or that you can wait to buy, once you have a job again. It is worth looking through your bank statement to see what sorts of things you buy and whether you can stop buying any of those things. For example, it could be a good idea to cancel subscriptions, charity donations and memberships for a while. You can always make up for those once you are earning again. You may also be able to negotiate lower payments for utility bills and things like that, which could save you a significant amount of money and again, you could pay more when you are able to. 

Compare Prices

It can be wise to compare prices on the items that you are buying. Even if you are only buying the basics, you may still be paying more for them than necessary. So, make sure that you look at where you can buy those things and see whether it will be possible for you to find them cheaper elsewhere. For example, compare supermarkets to see if there is a cheaper one that you can shop at. Look at the retailers that you shop at and see if there are cheaper ones but also think about swapping brands to own brands or just cheaper brands. You can compare prices on phone, broadband and utility companies as well and this could help you to spend less. Even if you save a little bit, if you save on everything that you buy, then you will be able to significantly reduce your spending and that will help you to manage for longer without an income. So it is well worth the effort in researching the prices of everything to see whether you can pay less.

Get the Whole Household Helping

It is a good idea to speak to everyone in the household about the fact that you are trying to spend less money. Make sure that they have a good understanding of what they can do to help. It might be that they are children and so if they know not to ask you to buy them things that could help or you may need to stop giving them pocket money or buying them little treats for a while. Hopefully they will be able to understand that this will be a good help to you. Make sure they also understand that it will not always be the case and that when you find a job, they will be able to have more again. This should help them to feel better about the situation and not worry so much about not having things as they know you will make it up to them when you can.

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