Covid Finances 101:
When Redundancy Hits
(Disclosure: This is a contributing post.)
For millions of people across the globe, the Covid-19 crisis has brought economic uncertainty as well as health concerns. This two-fold misery has seen a downturn in the jobs market. Senior leadership and management positions have become elusive and redundancy is on the cards for many. If you find yourself faced with the threat of a furlough or you are contemplating voluntary redundancy, you'll need to look at a few areas of your finances.
First...create more breathing room...
Write down all of your monthly expenses (both fixed and fluid costs). Call up credit card companies, mortgage lenders, utilities, car loans, phone companies, insurance agents and even landlords to see who's willing to help.
You'll be surprised to find out who may! Our mortgage company offers 3-6 months of deferment. I've had clients who has landlords that either gave them a total break or gave them a 50% discount! And...right now since no one is driving...your car insurance company should definitely be giving you a break. If yours hasn't, call them and ask them to fill out a new mileage form. My car insurance bill went from $110 per month for two cars down to $41 per month!
Next, look at what you are not using anymore... or where you may be able to buy in bulk to save money.
And definitely apply for unemployment, grants or low interest loans if you qualify. Anything to help get you through the crisis should be considered.
Your Home
If you live on a large property and you have excess space, think about either selling or renting. If you really need money in the bank as quickly as possible, call professional homebuyers who will make an offer on your home. This will enable you to move forward and purchase a smaller pad quickly or rent something temporarily. You might even want to take the equity that you have built up in your home to either refinance (mortgage rates are super low right now) and get a lower rate or take out some equity to pay off debts. This will give you much more financial freedom while you look for a new job or consider retraining for a new career.
Retraining
If you want to retrain for a new career either out of choice or because your industry looks bleak, it’s necessary to consider the financial implications of this. Remember, any money that you spend to gain new qualifications will be worthwhile and prepare you for the future. You may have to begin working in an entry-level position but hopefully, you will be making money AND doing something impactful and fulfilling with your life.
Losing a job can come as a real financial and emotional shock, especially if you have been working in your current role for a decade or more. Try and consider your future if you see redundancy on the distant horizon. Do some number crunching and consider how you can save some money. This is a temporary period in your life which may test you, but ultimately, you can emerge stronger and more financially better in the future.