Managing debt when you’ve been made redundant

A woman managing debt after being made redundant

One of the biggest challenges people face after being made redundant is adjusting their finances while searching for work. When you lose your key source of income, meeting your repayments can be a very daunting task. This is especially true when you have financial commitments such as credit card debt, a personal loan, or a mortgage.

Here are our three tips to help with managing debt so you can stay afloat and protect your financial future.

Re-evaluate your spending habits

Even if you’ve received a generous redundancy payout, you may still need to alter your spending habits.

Finding a new job may take time and without a regular income you could be dipping into your savings more than you would like. Planning your finances, tracking expenses and reducing unnecessary spending can help you stay on track during this difficult time.

Manage your repayments

Managing debt can be particularly stressful when you have lost your income. Some people use part of their redundancy payment to pay off debts. Others deposit their redundancy payout into a savings account to earn extra interest.

However, if you are out of work for a long period of time, this may not be an option.

During this time, it’s important to keep track of what debts you owe and how much your repayments will be. If you don’t think you can maintain your repayments, contact your creditors and let them know about your situation. When you open these lines of communications with your creditors, most of the time, you may be able to discuss alternative short-term solutions until you are able to find employment.

Although it can be difficult to deal with, make sure you don’t avoid meeting the repayments on your debts or contacting your creditors while you are unemployed. This can result in mounting interest and fees and can have long-term effects on your financial health – such as credit scores and lending capacity.

 

Seek professional help with managing debt

A redundancy can be a challenging lifestyle change to manage. Seeking professional advice can help you make more informed decisions about your financial future.

At United Debt Assist, we’ve witnessed firsthand the stress felt by many Australians experiencing financial hardship. Our specialist team have experience restructuring debts, freezing fees and interest, and delivering solutions that work for your personal situation.

Explore our debt solutions to assist in managing debt and staying on top of your finances. If you’d like to speak with our debt experts to get personalised advice, click here.

The information in this article is general in nature and does not take into account your personal objectives, financial situation, or requirements. Therefore, please consider whether the information is appropriate to your circumstance before acting on it and seek independent advice from a finance or legal professional if necessary.

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