How to redundancy proof your finances

With unemployment rates at a 17 year high, fewer people than ever are feeling secure in their jobs. However by preparing your finances for the worst case scenario, you'll be able to see yourself and your family through difficult times. Here are some tips to help you redundancy proof your finances...

How to redundancy proof your finances

1. Start saving now

The most obvious way to prepare for the possibility of redundancy is to save as much money as you can afford to put away. Having a target in mind can help to motivate you to reach this figure, so calculate a savings goal. This should be the amount you need for at least three months worth of bills, mortgage or rent payments and living expenses. The more monthly nest eggs you can put away, the more secure you'll feel in your finances, no matter what the situation is with your career.

2. Speak to your bank about insurance

Credit card insurance and mortgage protection insurance are just a couple of the policies that may offer redundancy cover in case you lose your job. Depending on the insurer and the individual policy, your payments may be covered for up to six months - allowing you time to focus on finding a new job.

3. Pay off debts as soon as possible

Aim to be debt free as soon as you can. Pay off loans, store cards or credit cards that have the highest interest rates first, then begin to increase your payments of any other debts too.

4. Avoid spending on credit

Now that you have reduced or cleared your debt, avoid the temptation to spend on credit again until you are sure that your job is secure. That way your debt will remain minimal and your finances more redundancy proof.

5. Talk to your bank and creditors

Banks and creditors are usually surprisingly understanding about redundancies, and may offer you a break from repayments or an increased overdraft if you discuss it with them.

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