Money matters

If you've been using our Emergency checklist, then you may have already have performed some initial financial first-aid, including checking your insurance, managing your mortgage payments and reducing your spending.

What you do next is key to ensure that you don't have any financial problems during your time between jobs. Here at Tweenjo we've put together a set of do's and don'ts to help you make the right financial choices.

Do's

Do apply for any benefits you are entitled to

By registering at your local Job Centre, your national insurance payments will be paid and you may qualify for Job Seekers Allowance (contributory or means-tested), mortgage interest relief, rent assistance, council tax reduction, free school meals and free prescriptions and dental care.

For more information on this, see Your entitlements.

Do keep close track of your money

Try to keep track of money coming in, and money going out each month. If you've got it on paper you'll feel in control and be able to manage your spending so it is in line with your income. If you're at home with spreadsheet software then start one for your finances; it's the best way to .

Money in: this includes any income from your partner's wage, benefits and income from investments or pensions. Create a spreadsheet that includes all regular monthly income. Do not include one-off payments, such as redundancy payment or insurance as you will not be able to rely on these occuring in future.

Money out: enter regular monthly outgoings, including direct debits, standing orders and cash withdrawals. Mark each item as essential or non-essential. This will allow you to get an accurate total of essential outgoings, and a list of non-essential items that you can plan to reduce or eliminate.

Do get an online bank account

An online bank account will allow you to keep a close check on your finances, helping you to avoid your own personal 'credit crunch'.

If you have lots of online bank accounts, you can keep track of them using an aggregator service such as Kublax.

Do start budgeting for your life between jobs

Factor in your financial situation when considering any of the possible activities you can now undertake, such as travel, re-training or setting up your own business.

Come up with a view of how much this activity is likely to cost, double it for contingency and then double-check that you will have enough money to fund this. If you don't have enough money to achieve this, consider borrowing the money, but don't get involved with loan sharks or doorstep lenders (see below).

Do consider taking a short-term job

If the money in vs money out equation isn't look healthy but you can't find a replacement job in your field, then do consider a short-term job.

For more information on this, see Getting a stop-gap job.


Don'ts

Don't ignore bills

Open bills the day they arrive and plan how to pay them. If you foresee problems with them, contact the creditor immediately.

Don't waste your redundancy payment

If you've been fortunate enough to receive a redundancy payment, do be super-cautious about how you spend it or invest it.

As a rule of thumb, serious investors only assign about 10% of their money to high-risk opportunities, so you should do the same. For example: if you've received a £10,000 redundancy payment, don't invest more than £1,000 in that new construction company your nephew is starting up.

If in any doubt, talk to an independent financial adviser (IFA). You can search for one on Rubii.

Don't get involved with loan sharks or doorstep lenders

Sadly, illegal money lending is flourishing in the current economic climate; doorstep lenders (legal but with excessive interest rates) are also doing well. Don't think that legal or illegal doorstep lenders are your only chance of getting money - always talk to your bank first, and failing that, go to the credit unions.

ABCUL, the Association of British Credit Unions Limited has a search facility to find a local credit union.

If you are already involved with a loan shark: remember that as loan sharkinging is illegal, your debts do not have to be repaid. The police have also set up a national helpline dedicated to loan sharks: 0300 555 2222.

Don't panic!

The final point is worth stressing: in times like these it may feel like you have a mountain of outgoings and precious little coming in. Don't panic, but continue to make efforts to reduce your expenditure, handle any debts intelligently, and try to obtain new sources of income as soon as possible.

For more information on this, see Getting back to work.