What to do if you lose your job
Losing your job will have an immediate and unavoidable impact on your finances. Depending on your circumstances, some of the financial issues you will need to consider are:
- Will I receive a redundancy payout?
- What are my legal rights and entitlements?
- What is my current financial commitments?
- Where to from here?
- What is my exact financial situation?
Before making any decisions, taking any money or signing any documents, find out your entitlements and the best way for you to deal with any money you may receive. You may not be able to undo a decision you are unhappy about.
WINZ (Work and Income New Zealand), through the ReStart programme offer a range of payments and employment and job services - contact them to find out if you are eligible.
Ask someone who understands your terms of employment and your superannuation benefits, how much tax you’ll pay and what makes the best sense for you financially. If you belong to a union, they may be able to give you free advice.
Depending on your age and your employment options different financial issues will be a priority. Whatever your circumstances, you will probably need to review your budget, loans, credit cards and super.
What should I do if I can't pay my bills and pay back my loans?
First, stay calm! Work out what you can reasonably pay each person to whom you owe money (your 'creditors'), considering your living costs, rent or mortgage, and all your debts. Get assistance early on about making any changes to your loan repayments.
If you need more help with budgeting or financial problems, talk to a financial counselling service. A financial counsellor can help you take control of your situation.
Don’t let your situation get worse by not addressing your finances – creditors won’t ever go away and the longer you leave it, the more serious your situation will become. Contact your creditors promptly and tell them you are having financial difficulties and want to discuss repayment arrangements. This is especially important if creditors hold security over your home, car or other assets. Offer only what you can reasonably afford to pay, and offer something to each creditor. Try to cover interest or charges applying to the debt. Ask if the creditor will agree to reduce the interest on the debt until you can get back on your feet. Confirm any agreement in writing.
TIPPrepare a family budget to give you the best understanding of how to manage your finances.
What about my super and insurance cover?
Talk to your super fund about any benefit entitlements that apply on retrenchment. Find out if you can continue your existing life or disability insurance when your employer will no longer be contributing to the fund on your behalf. Some funds may allow you to continue your cover but there may be only a small window of time for you to make these arrangements.
Find money saving tips
- How to cut the family budget
- How to cut your shopping bill
- How to eat out on a budget
- How to entertain kids on a budget
- How to save on your home loan
- Managing your credit card
This article was created by Ella Walsh for Kidspot - New Zealand's leading parenting website. Sources include the federal government and ASIC.