Kochie’s tips for managing your redundancy payout
Redundancy can be one of the most stressful things that can happen to you, as you lose the security of a regular job and income.
The redundancy payout will also most likely be the largest sum of money you have ever received at once, and it can be difficult to know the best way to invest or manage the money. Therefore, it is important to carefully consider what you will do with your redundancy payout now, and in to the future. Port Adelaide Football Club Chairman and Channel 7’s David Koch shares some useful tips to help you do this.
When you receive your redundancy payment, it can be quite daunting seeing such a large amount of money in your bank account. Many people feel pressured to do something with it straight away, but it’s important that you don’t panic and rush in to a decision.
You will also get a lot of advice from family and friends about what you should do with the money, so don’t let this overwhelm you. It’s important to remember that you don’t need to decide straight away, so just pause and take the time to consider your options.
The first thing you should do is just park the cash somewhere that is secure, earns a good interest rate, and is easily accessible.
Get financial advice
It’s wise to get professional financial advice regarding your payout, before you make any major investment decisions. Here are some ways you can find a trusted financial advisor:
- Speak to your superannuation fund
Your super fund should be able to recommend a financial advisor they have evaluated, and consider reputable.
- Speak to your bank
Banks have their own financial planners. Bearing in mind, they work for a bank and will likely try to steer you to their own financial products, however it is a good starting point to try and learn more about what a financial advisor does.
- Speak to an independent financial advisor
Most reputable financial advisors are a member of either the Financial Planning Association or the Association of Financial Advisors. If you call one of these associations they should be able to recommend someone to you – ask for a financial advisor that specialises in redundancy.
Make sure once you have selected your preferred financial advisor, that you don’t surrender the responsibility of your financial situation to them. You need to make sure you understand what they are doing with your money and how it is going to look after you in the future. If you don’t understand what they tell you, then go and see someone else.
Secure another job
Once you have spoken to a financial advisor and secured a new job, with a regular income, you can afford to have a bit of fun with a small amount of the payout you’ve received (for example, by going on a holiday or buying a new car). It’s important to wait until you have the certainty of a new job and regular income before making any expensive purchases though – no matter how tempting it may seem.