Losing your job is a miserable experience, whether you were expecting it or not. While finances are a top of mind concern, losing your job may not be the financially devastating situation that you though. Hold tight, don’t panic, and work through the plan to evaluate and stabilise your financial situation. Better days are coming.
Step One – Assess your financial resources
If you are a person with some financial stability, you probably already have a good idea of the balance in your checking and savings accounts. Now is a very good time, however, to get a more complete handle on what your total resources are.
Firstly consider severance, holiday and other payments. If you have been made redundant, you may be entitled to severance pay, which should be equivalent to the time it takes to find a similar position. If you have been dismissed for cause, you may still be entitled to holiday or long service pay. If you did not receive the final pay you believe you deserve, it may be helpful to contact the Australian Fair Work Ombudsman for advice. If you have been unfairly dismissed, you may want to contact an unfair dismissal lawyer. This option is not available to everyone and an application must be filed within 14 days of termination.
If your employer went into liquidation or bankruptcy, you may be entitled to unpaid wages, unpaid leave, payment in lieu of notice and redundancy pay under the Fair Entitlements Guarantee. You may also be entitled to a Centrelink Newstart Allowance, although asset limits apply and a waiting period is usually required.
Leaving your employer may mean that you have to transfer out of an employer fund. You may also lose life or disability insurance. Continuance insurance or income protection coverage may be a good idea, but remember that this generally needs to be applied for within 30 days of termination. Under certain hardship provisions, you may also be able to access superannuation payments early. Make sure that you understand the tax implications of this choice, however.
Part-time or contract work may also be a temporary stop-gap to consider. Work for a previous client or vendor may turn into something permanent while bringing in short-term income. It can also keep you active in your network of friends and colleagues. Think about your professional network as a financial resource.
Step Two – Create an emergency budget
This particular state of affairs will not last forever, but it may last longer than you want. Add an extra couple of months to your anticipated timeline, just to be on the safe side.
Experts suggest putting your redundancy and other payments into a separate account and then paying yourself a “salary” from this account at regular intervals. If you anticipate being unemployed for four months, add two and then divide whatever lump sum you have by six, for example. That will tell you what your maximum expenditures for each month can be. It also may help create a sense of normalcy.
List all of your expenses, and then decide which are discretionary and which are essential. Reduce the discretionary ones first. If necessary contact lenders about emergency provisions that may permit reduced mortgage or other debt payments.
Step Three – Make an optimistic (but not crazy) plan about what you want to do next
Having to rethink your career plans and your finances may not be the worst thing in the world. It may be an unsought opportunity for some mid-course correction, but it’s probably not a good time to write that novel.
Brush off your resume. Take care of your mental, physical and social health. Get dressed, get some exercise, see sunshine, meet colleagues for lunch and set a goal of a certain number of professional contacts every day. Remember that your job is to get a better job than the one you had before. Having a firm hand on your finances can do a lot to help you make the most of the situation.
At Owen Hodge Lawyers, our attorneys can help you explore what your financial options and entitlements are and what plans might best support your future goals.
Please call us to schedule a consultation at 1800 770 780.