Minimising Financial Risk
If you have recognised the signs that you could be vulnerable to job termination or severance through redundancy or dismissal, then you can take pre-emptive steps to ensure you are in the best possible financial position.
The initial concern that most people experience when they lose their job is financial - how can you ensure your mortgage payments are met each month and have money to pay the bills? Unfortunately, we now live in an age where many people have experienced job loss through redundancy or dismissal. Taking steps to prepare for job termination or severance is one way to ensure you feel more in control of the situation.
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Insurance. There are different kinds of insurance that you can take out. These include mortgage payment protection and income protection, which can give you a guaranteed level of income when you lose your job. You can compare different policies at Moneysupermarket.com . Just be aware of the small print - some only pay out when you are made redundant, as opposed to other kinds of dismissal. Some insurance policies also have a waiting period of up to 3 months before you can expect to receive any payment.
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It is perfectly acceptable to have more than one policy. You may have mortgage payments, a loan and other bills - such as council tax, electricity, gas and phone. You can take a policy to cover each type of expenditure.
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Mortgage/remortgage. You can take out insurance as protection against your mortgage payments but you should also reassess your mortgage on a regular basis. Go and talk to your bank manager. Shop around and make sure you have the best possible deal for your mortgage - websites like Charcol online have comparison charts and best deals. If you can get a better deal then remortgage your property. The lower your overheads, the less risk you have if you are dismissed.
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Credit cards. Attempt to reduce the balance on your existing cards or try switching your credit card to a 0% card. No interest accrues on the balance transferred for a fixed period so you can reduce the balance through smaller payments. Look out for the best deals on ComparetheMarket.com.
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Savings. A lot of us live on credit rather than putting anything away for a rainy day. Putting a small amount of money away each month will act as a buffer if you find yourself in the unintentional and unfortunate situation of being out of work through redundancy or dismissal. Look here for high interest bearing accounts from online and high street banks.
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Budgeting. If saving seems impossible it may be worth budgeting to see where you could make savings. Use our handy on-line budget template to help you.
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Financial advice. Make sure your finances are in order by seeking out information and help from an independent financial advisor. They will be able to look at your current financial situation and advise on topics such as mortgages, savings and insurance. On this site you can find details of independent financial advisers in your region.