The uncertainty that comes with losing a job or redundancy is a challenge, but leaving one role always opens up new opportunities for others. The best thing we can do is be prepared. By sticking to a budget and having savings set aside in an emergency fund, we’ll be better placed to cope with the initial shock and stress of losing a job.
Been made redundant? Step one after losing a job is to take a close look at the budget to see how the household can cope with reduced income. If you have an emergency fund or a redundancy payment, work out how long it will last.
Use this budgeting tool to make or review a budget.
For personal help, find a local financial capability (budgeting) service.
Talk to your bank right away if you might have trouble meeting debt or mortgage repayments as a result of redundancy. They will have options they can talk through with you. Try not to miss a payment before getting in touch.
If you have repayment insurance as part of a personal loan or hire purchase agreement it may cover payments if you are made redundant. Check the policy document for details.
Redundancy insurance is also available on its own or as an add-on to life insurance – check your policies to see if they include this type of cover.
Your employment contract will state if you’re entitled to a redundancy payment and how much it would be.
Find out more about employee rights in the event of losing a job on the New Zealand at Work website.
The key to coping with redundancy is being prepared before it happens. Ideally, we should aim to have access to the equivalent of two to three months’ income as an emergency fund we can call on if we need it. But anything is a start.
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