The hard work of adjusting to the changes associated with losing your job and the financial ramifications are pretty demanding. You will have learnt some valuable skills as you’ve navigated your way through.
MoneyHelp will have helped you to understand that you have financial rights and options even when you have debts and your income has fallen. If you’ve looked at the sections of the website that refer to the specific types of bills that you are facing, you’ll have developed an understanding or how important it is for you to start working on managing your debts early. You’ll also know which debts you should attend to as a priority in your circumstances.
Under no circumstances should you ignore debts or any legal papers relating to them.
You have the most options the earlier you start to tackle your bills and debts. By making contact with your creditors as soon as you know you may find it difficult to make your regular repayments, you’ll be putting yourself in the best position to negotiate a payment plan. This will mean a lot less stress than if you try to juggle bills and debts and continue to borrow or spend more than you can afford in your circumstances.
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Improving your personal financial situation
You need to stick with your debt management plan and keep looking for ways to increase your income and reduce your spending. Start looking for another job or source of income so you’ll be able to keep your debts manageable and feel more in control.
Review your budget regularly and stay familiar with all debt payment options available. Pay a little extra than the agreed amount off your debts if you find you have extra cash at any time. Keep your credit card expenses under close watch, remembering how much things brought on credit can end up costing much more that you intended in money and in stress.
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Budgeting is key
You need to work at bringing your income and expenses into balance. This is important at all times; not just at times when your circumstances have changed because of job loss. But if you’ve lost your job or are working less hours, it will be essential for managing your way forward. A budget will assist you to work out how much you can realistically afford to pay. You can use your budget to demonstrate to your creditors that you are serious about achieving greater control over your finances.
Stay vigilant for spending leaks, those purchases and costs that you can avoid if you just pay attention. More information on how to reduce your day-day spending is available in MoneyHelp’s Money tips.
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Look after yourself
It is important to look after yourself if you’re experiencing job or income loss. Allow time away from organising your finances and make sure you eat well, get enough sleep and stay busy and active. Spend time outdoors, take walks, it costs nothing and gives you time to think through and sort out your life and financial goals. Treat yourself with free or modestly priced recreation.
Stay in touch and talk with the people who are important to you including your family, friends, and any community groups that you’re involved with. Enjoy the fact that you can spend more time at home with your family and pets. These activities will help prevent the symptoms of stress often experienced from job or financial loss such as sleeping poorly, feeling overwhelmed and an increased use of alcohol or drugs.
Financial well-being and health go together so it’s important to be aware of the support available and ask for it when needed.
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The important lessons you’ll have learnt
The economic downturn has affected people from across all industry sectors and at all levels within companies. Your willingness to work though the challenges and your perseverance will be key to achieving greater financial control and a less stressful future.
As the economy improves, you’ll have new financial management skills for when you re-enter the workforce or for handling retirement. If you adopt some of the many important lessons into your day-to-day life, you may end up at a much better place than where you were at before the downturn started. Develop your new behaviours as habits.
Live within your means
- Don’t borrow more than you can repay
- Use your credit card carefully
- Avoid unnecessary interest charges
- Save a small financial buffer for emergencies.
Stay on top of debts and bills
- Know your current financial situation by keeping track of your income and expenses
- Contact people to whom you owe money early and ask to help you find a way to pay
- Know your rights and options for paying when your circumstances change.
Understand what you are signing
- Read the fine print for any financial arrangement you sign
- Ask questions to clarify anything unclear in a contract
- Get a second opinion when you are signing up for credit.
Manage your paperwork
- Keep a record of all contact with creditors concerning payments and loan arrangements
- Check your bank statements and bills and making sure all transactions are correct
- Keep a receipts file for major purchases, guarantees and warranties so they’re easy to locate if you ever need them.