Protecting yourself and your family from a job loss is one of the most important steps you can take to providing security within your family unit. But how can you do that, exactly?

Stop and ask yourself: If you got fired tomorrow, how would you cope?

Could you cope? 

The more likely scenario in the current economic climate is rather than being fired, your department may be ‘downsized’ – resulting potentially in your redundancy – or business functions being outsourced or centralised in a location far from where you live.

Preparedness for such events can make the difference between weathering the storm, or drowning in it.

Back in 2009 I wrote about my plan for redundancy when I was deep in debt, and this 2-part post is effectively an update to that. Part 2 will look at the things you need to get rolling after you lose your job.

 

Before You Lose Your Job

There are some actions you can take before you lose your job that can help lighten the burden later on. Providing your financial house is in order, it will be relatively simple to do. If you’re just starting out after years of financial ‘head in the sand’ syndrome, it’d be best to set aside a day to go through everything.

 

1. Know Your Redundancy Rights

As an employee you have rights when it comes to being made redundant. You have a right to be consulted during the redundancy process. If your employer is getting rid of 20 or more staff, it must consult with the union or staff representative before even giving notice and should take place at least 30 days prior to notices being issued. If it is shedding 100 or more, it must take place at least 90 days before.

You should also be consulted individually and not just via your union. If this does not happen you may have a case for unfair dismissal (see next heading).

Further help and guidance can be obtained via Direct.gov:

• Your Redundancy Rights
• Entitlement to Redundancy Pay
• Calculate Your Redundancy Pay
• Redundancy Selection & Notice Periods

 

2. Know What is Unfair Dismissal

Unfair dismissal is exactly as it sounds – you lost your job for unfair reasons. There are endless potential examples, but a ‘for instance’ would be dismissing you for becoming pregnant, or refusing to work when it would be against the working time directive to do so, even when so ordered by your employer.

See Direct.gov for further guidance on unfair dismissal.

 

3. Fix Your Mortgage

Within the next 12 months myself and others are predicting a large-ish rise in mortgage rates. We are already seeing a slow rise in the cost of standard variable rates over the last 6 months, and with the Bank of England widely reckoned to be upping the base rate from 0.5%, a steady rise in mortgage rates is inevitable.

Protect yourself from untimely increases by re-fixing at a competitive rate now. Even if the rate is slightly higher than it is now resulting in a slightly higher cost than normal, when the rates begin to creep higher and higher you’ll be sitting relatively pretty than if you’d just remained on the Standard Variable Rate.

 

4. Fix Your Utilities

Similar to your mortgage, utility prices are on the up as well. If you can, shop around and find a good price-fixed deal. This will save you from untimely price rises at just the wrong moment when you can least afford to absorb them.

Dual-fuel deals are usually more cost effective, but don’t automatically assume that to be the case. See my 6 tips to reduce your electricity costs and 12 Tips to Save Water while you’re at it.

 

5. Pay Off Your Debts

Central to any plan to weather a job loss is to make sure you are debt free, or as near to debt free as possible in your circumstances. If your income is drastically reduced and you are concentrating on trying to find new work the incessant worry about how you will make the minimum credit card, loan and car payments will strangle you.

If you have debt such that you cannot hope to even meet the minimums in such a scenario, the non-stop telephone harassment and postal assault will surely drive you over the edge and severely damage your credit score in the process, potentially making finding a new job even harder.

For tips and advice to paying off your debts, head on over to my Get Out of Debt! series to get started.

 

6. Consider Your Next Job

Do you enjoy your current job, or is it time for a career change? Take the initiative and turn the current situation around into something more positive. Even if you are still gainfully employed now, begin looking around for ideas for your next move. You can write your C.V. to specifically target that market to help you get into it and have it ready to go for when the worst happens.

If you have talked yourself into wanting a change that badly, you could do worse than consider sending it in even while still in the employment of your previous employer.

Remember to balance the situation of your current employment against the potential gains of moving employer voluntarily. If you have been with your current employer for more than 2 years you have redundancy rights. If you move jobs, you would give up those rights for the first 2 years.

 

7. Spruce Up Your C.V.

If you have been in the same job for 10 years, it is quite likely that was the last time you looked at your C.V. Think of all the skills you’ve obtained since then. All the extra challenges you have faced in your work and home life that could add value to you as an employee. Dig it out, add your latest and greatest to it and sell yourself!

See the Top 10 HR secrets that will help get you hired.

 

8. Consider Your Health Insurance

If your employer currently provides you and/or your family with private medical insurance, now might be a good time to take the whole family for a check-up, a dentist’s visit and so on. Coverage will likely cease soon after your employment, so it makes sense to check nothing major needs doing before you lose your coverage.

Along a similar vain, if you are provided with a company car or insurance, consider how your transport may be affected by a job loss. You will need to factor in public transport or private insurance costs. If you own your own car there are still ways you can reduce your fuel costs and generally make your motoring life cheaper.

 

9. Review Your Household Budget

While you’re not panicking and running around like a headless chicken, take stock of your finances. What is your current cashflow situation? Do you know where every penny goes? If not then you need to start working out what you spend and when, to have some idea of how you’ll stand with a reduced income.

1. Complete an Online Statement of Affairs to calculate your monthly expenditure.
2. See what can be adjusted, reduced or disposed of entirely
3. Stick to the new budget and save what you free up

 

10. Look for Side Incomes

Any income is better than none at all, and if you can establish a side income stream while times are good, it can help carry you along when times are not so good. Why not start with my 5 tips for upping your income and then branch out from there. It need not be a huge commitment, perhaps taking a few hours a week at most. The point is to start it while you are not panicking about having no income at all.

Would you add to this list? Come share your experience and tips in the comments!

If you’re in debt, you’re almost certainly thinking about how you’ll get out of debt. There are several different ways of doing that. Some of them require specialist help and debt advice, while others are more a matter of determination and self-discipline.

Someone who’s a bit worried about the interest that’s racking up on their debt, for example, would probably benefit from reading around on the web, looking for money-saving tips that could help them free up some money from their monthly budget and get their debts repaid more quickly.

But someone who genuinely can’t keep up with their payments anymore might need to consider a debt solution such as a debt management plan or IVA (Individual Voluntary Arrangement) – two solutions which can help people struggling with their unsecured debts.

Debt management is a new repayment agreement with someone’s unsecured lenders. The borrower might find they’re willing to accept smaller monthly payments if it looks like the best way of getting the money repaid in full. They might agree to freeze interest and waive charges as well, if they think that’ll help, although they don’t have to agree to that (any more than they have to agree to lower payments) and repaying debt more slowly can cost more in the long run if interest is still accruing.

An IVA, on the other hand, is a different kind of agreement – legally binding and overseen by an Insolvency Practitioner. Unlike debt management, an IVA is designed to write off some of the unsecured debt in question: assuming the borrower sticks to the agreement and makes the necessary payments, their unsecured lenders will actually write off the portion of the debt they couldn’t repay in time (over a five-year period, typically). Also unlike debt management, the borrower might have to release equity from their property if they’re a homeowner.

Debt consolidation loans, another debt solution you may have heard of, are for people in a different kind of situation. Loans like this can simplify the process of repaying multiple debts but aren’t appropriate for people who’re really struggling and can’t commit to making regular monthly payments. They’re there to help people who are confident they’ll be able to repay the loan as agreed. When people secure a loan against their home, that’s especially important, as they could be putting their home at risk if they don’t keep up with the payments.

Another difference: a debt consolidation loan won’t impact on someone’s credit rating, while entering a debt management plan or IVA will.

We all know that most of us need to reduce our personal debt, not just for our own pockets but for the sake of the economy. Although it’s a depressing figure, by the end of January 2012 the total UK personal debt stood at £1,456 trillion.

However, it need not all be doom and gloom; there are still opportunities to treat ourselves without being totally out of pocket. Getting out of debt can mean not overindulging but there are also ways to do have memorable experiences without having to sacrifice everything you enjoy. Here are 5 tips to help you enjoy the finer points in life whilst still clearing debt…

1.      Ask for a payrise

Have you asked before? Even if you have, we all know, if we don’t ask, then we don’t get… Why not take a chance and see if you can get paid more for what you currently do. Then you can use the salary increase to help pay off debt, whilst maintaining your current lifestyle.

 

2.      Get a 2^nd job

If you’re not successful when asking for a payrise, why not get a second job to supplement your income. It doesn’t need to be a huge commitment. Perhaps you could be a home tutor a couple of nights a week. Or even try some freelance writing. Whatever your skill, with enough Googling, you are bound to find something to suit your skills set.

 

3.      Find cheaper ways of pampering yourself

You still need to look good right? Even if you’re asking for a payrise or interviewing for a second job, you want to know that you look your best when you are doing this. These days, there are so many websites offering beauty vouchers, so why not take a look on a site such as Groupon or other daily-offer sites and see what you can get.

 

4.      Cut corners with your shopping

Whether it’s your weekly food shop, DIY purchase for home improvements or a dress for a wedding, again, there are countless shopping vouchers to be found online. You need to pay attention to dates though, as these deals do not stay around for long but new ones are constantly appearing, so it’s nearly always a safe bet.

 

5.      Consolidate your debts

Paying several different loans and credit cards can get very confusing. Why not consolidate all of your debts in to one payment on the same day each month? Being organised this way will give you peace of mind and let you concentrate on the things you really care about. Ensure you find a reputable lender when doing this, however, and check APRs and fees. You need to ensure you won’t end up paying back more than you already owe!