Redundancy is one of the most common causes of debt. We wish we could tell you that when most people are made redundant, they almost immediately find another job. That doesn’t happen. It can take months or even a year until they find a job that’s paying even close to the same as the one they lost. We’d like also to tell you that the redundancy packages most businesses offer will keep them safe from debt until they bounce back. But again, this isn’t the case. In fact in most situations, the redundancy package will only cover them for the first month or two. It can even be less than that at just a couple of weeks. These days, a lot of people work on a freelancing contract as well. That means that the employer is under no obligation to a pay a redundancy package at all.
So, how can you avoid debt in this difficult and stressful situation.
Why Were You Made Redundant?
This is an important question to ask. If the redundancy wasn’t your fault, you might have the possibility of a legal claim. With a legal claim against your previous company, you can win some money to keep you afloat while you search for another job. You might have been made redundant because you were injured at work. If that’s the case, you almost certainly have the chance to file a PI claim. If you think you are entitled to make this type of claim you should contact a law company such as SiebenCarey. They’ll be able to advise you on the best way to proceed.
It’s worth pointing out that to have a legal claim, it doesn’t need to be a physical injury. It’s possible that the injury was emotional. If you were bullied at work or felt harassed, you might still hold the possibility of bringing forward a legal claim. The payouts of these types of settlements can be massive. Even when they don’t end up in court.
Although, you should be aware that taking a case like this can stop you getting further work. Officially, employers will point to other reasons for not hiring you. But unofficially business owners will always be wary of hiring someone who has previously sued their employer.
Save As Much As You Can
Before you ever face redundancy, you should be saving a good portion of your annual or monthly paycheck. This is by far one of the best ways to deal with debt before you’re hit with the circumstances that cause it. Essentially, you need to be careful, that you’re not just living without thought for the future. You should always have a few thousand in your account for emergencies. Without this amount, you’re going to struggle to survive a period of redundancy. At least without using a benefit such as job seekers allowance.
Once you’re made redundant, you also need to think about further ways you can save money and cut back spending. In particular, be wary of energy bills. Energy bills take a fortune from your income each month without you even realizing it. If you’re not careful, you can spend a lot of money with the cash almost literally going down the drain. Start thinking about how you can use less water, gas and electricity. You’d be surprised at what temperature a home can be once you get used to it. Essentially, you don’t need the heating on full to stay cozy and warm.
Job seekers allowance can provide the crutches you need to continue to walk when you’re crippled by redundancy. But you have to be aware of the terms that come attached. If you use JSA, you must always search for a job. You also need to accept any offer that comes your way. If you don’t do this, then you will find that the benefits stop. This is why most people avoid JSA for as long as possible.
Using Your Assets
Finally, when you are made redundant, you can use assets to help you keep your finances healthy. These are things that you own such as your car or your home. It’s possible to rent your car out online to earn some extra cash. You can also rent a spare room in your home or even sell your home to downsize. Any one of these options could keep you free from debt for a little longer.
We hope you have found this information useful. Redundancy is horrible, and it’s not something we would wish on anyone. But it’s going to hit all of us at one point or another, so it’s best to be prepared.