Laid Off/Made Redundant? Here’s what to do with your finances

laid off

laid off

Estimated reading time: 6 mins

This is one of the worst things to happen – or so it feels at the time.

One of the things you will no doubt be worrying about is what to do to keep the bills paid and food on the table. Getting control of your finances will bring a lot more comfort to you. There will be certain things you have finances committed to that, quite frankly, you don’t really need.

I’ve been here twice myself. I know how crap it feels to worry about feeding your family and keeping them warm. It’s these things that are the most important. Now is the time to look at everything you spend and challenge it.

Reducing your outgoings will give you headroom and make any severance/redundancy payment go further, and you’ll more likely to be able to sleep at night. In fact you may feel, like I did, a feeling of emancipation and be ready for a fresh start.

Where do you start?

The first thing to do is to take your bank statements and all credit card statements for the last 12 months and to go through all of them, line by line, and identify the outgoing payments. Take a magic-marker and highlight them now. Then inspect each one and assess what it is. You’ll find that they fall into the categories below. I’ve estimated a typical expense for each item, to total up a potential saving per month:

Potential saving: 1380/month – see how it mounts up?

Other ways to stem the outflow of cash

Cash withdrawals: it won’t be easy to reconcile where this cash went, but you can get a handle on how much you have withdrawn. Some of this cash will have been spent on the above items, and then some will be irreconcilable. Note how much this is and carefully re-consider what you use cash for from now on.

What NOT to do

Don’t do anything you will regret. You WILL do something you don’t like, but once you have made your decision to align your outgoings to your new situation, do so knowing this is the right thing to do at this time. You WILL, at some point in the future, be in the position to spend more on luxuries, a bigger car and vacations.

This post is part 9 of 18 in the series Coping with Defeat
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