How Should I Spend My Redundancy Money?
The decisions you will have to make on this subject will depend on how much redundancy money you are expected to receive. For some it may not be much, and keeping on top of bills while you look for another job will be of priority. For others the thought of a large, lump sum of income may provoke exciting ideas such as buying a new car or going on an extravagant holiday.
However, it is important to not waste your redundancy money, especially if your future circumstances are unclear. The only time you can be slightly more relaxed with how you spend it is if you secure a new job fairly quickly after officially leaving and when you have your redundancy pay securely in your bank.
There are conditions that mean you could lose your redundancy pay, such as if you find a new job before you have finished your consultation period in your current employment, or if you start before the date you are set to receive the money.
If you are in the situation where you have not got a new job lined up fairly quickly, there are a number of ways to effectively spend your money.
Keeping Up With Payments and Essentials
Your number one priority will be to keep on top of bills and payments due. Take the sum of money you have, sit down and budget for what is needed each month to cover these bills and essentials to live such as the food. You may need to reconsider your weekly shop and budget for essentials only. This way, you can put your mind at rest knowing how long your redundancy money can cover your current living costs. If your redundancy pay was minimal and you are worried about keeping up with payments, take a look at our page on what benefits you can claim to help.
If you find yourself in a manageable financial circumstance, especially if you have received a larger sum, it may be a good idea to clear any debts you currently possess. This will place you in an even better position for when you do start in a new job.
Redundancy can be a way of re-inventing yourself! If you have considered a change in career, you may need some new training. While you can gain some online qualifications for free, many do cost money. Take a look at our page that focuses on re-training.
Save or Invest
Again, if you are in a financial situation where you do not need the redundancy money straight away, it could be worthwhile placing the money into a savings account. Do some research into which bank offers the best deal for saving.
Alternatively, you could invest the money to help with long-term goals such as retiring early. An investment is made with the intention making your money grow by gaining a higher value than what you initially put in to something. A popular choice is to invest in stocks and shares or in property.
Start A Business!
If you find yourself in a very fortunate position where you can take the plunge and start that business you have always wanted, go for it! We have created a page focusing solely on starting your own business and how to go about it.