There maybe (money) trouble ahead….

Tuesday 16th June 2020

Another retrospective post. It took me a while to come up with this plan, but I wanted to mention it towards the start of my Blog, where it was most relevant. Also, as ‘the plan’ uses the amount of money in my final redundancy package, I needed to know that figure before I could write this down.

I’m lucky enough that I have a pot of money to cover my time unemployed, but I need to work out and plan for how quickly I’m going to burn through it.

Once I know how long I’ve got, I can then break that down into three periods so that I can gradually plan for running out of money.

Green period: 

  • Nothing really to panic about at the moment, life just about stays the same albeit with a few modifications.  
  • I’ll act sensibly though, and not go out and book the holiday to the Bahamas, but I will start planning
  • I’ll also check insurance policies for any redundancy clauses
  • I can still make payments for bills, but I’ll review them and see if there’s anything I can quickly minimise
  • I’ll do some research to what state benefits are available and start to use any I can right away
  • I’ve time for some retraining. 
  • The cat can continue to eat branded cat food.  

Amber period: 

  • Time to make considerable financial changes as I’m well into burning through my pot of money
  • Review the job ‘search strategy’ and make sure I’m doing everything I can to find work. Potentially, I’ll update my CV, chat again to contacts, do more research.
  • Maybe a good time to devote all of my time to finding a job, rather than retraining.
  • Check bills, prioritise and work out what outgoings are essential. e.g. mortgage and utility bills.  
  • Research what financial options are open to me with things like, payment breaks or holidays
  • Research what services I can cancel without any penalties. e.g. Sky, Spotify, etc
  • The cat’s on Supermarket own cat food.

Red Period: Financial trouble ahead

  • Cancel everything I can. e.g. Sky
  • Consider taking payment holidays where possible.
  • Contact none essential creditors and see if they can help with minimising payments.
  • Can I crank up my job hunting, or apply for a broader range of jobs
  • Consider any alternative ways of getting any income. Have I anything to sell? Could I use the gig economy for some short term income?
  • The cat is on value cat food.

Firstly, I’ll work out how much money I have to cover the time between now and when I finally get a job.

Redundancy Package Money + Any Savings = Total Cover Pot

In my case…

£9520 + £1400 = £10920

I’ve got £10920 to cover the period I’m without a job.

Next, I need to work out how long that will last me. My monthly bills are £2034

£10920 / £2034 = 5.3

So I’m okay for the next five months, providing of course that I don’t get any unforeseen expenses. To be prudent, I’m going to take that into account and plan that I’ve got four months to find work. That will give me a few options if the washing machine breaks.

Using the green, amber and red periods and planning from 1st of August, as everything if paid until then. I can break up those four months, 

August – Green period.

September and October – Amber period.

November – Red period

That’s how I’ll start, and I’ll make any changes when or if it’s needed.

The Dinner Cat-ometer

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