I've been posting here since January but have yet to put my budget on the line.
Last week my husband was made redundant after eight years with his company. He has held several roles with them, and three years ago worked his way into his dream job.
Income
Me: $3340/month take home
Him: $4090/month take home (only guaranteed till December 31)
Budget
$1600 rent~
$500 groceries/food/booze
$290 health insurance
$140 phones#
$115 union fees*
$87 car insurance
$85 bike insurance^
$80 train/fuel/tolls
$60 internet#
$50 power
$50 contents insurance
$45 sponsor child
$15 Netflix
#Phones and internet: Essential for work. Tax deductible.
~We've been in our apartment 4.5 years and our rent has not increased during that time, so equivalent apartments are now $2200-$2400/month.
*Union fees: We are in the same industry and are both members. We had discussed cancelling our membership but we have both relied on their advice or intervention with our employers.
^Bike insurance: Will drop to $58 in February.
Debt
$3500 credit card#
$7950 HECS (his)^
$13,550 HECS (mine)^
#Credit card: We have been furiously paying this off, and were on track to have it paid off by the end of the month. We put a hold on making extra payments in favour of saving extra cash until the job situation is resolved.
^HECS: As of December 31 the Australian government will no longer pay a 5 per cent bonus on voluntary repayments. We have the same degree, my husband's debt is lower because his income is higher and he passed the repayment threshold first.
Savings/assets
$1000 emergency fund (while we paid off debt)
$41,000 super (his)
$36,000 super (mine)
Redundancy
As it was explained to my husband, he and his colleagues were to finish working for their company on December 31, and start on January 1 doing the same job for a new company for the same money. This would be on a contractor basis for three months, followed by a full-time position but they are yet to receive a formal offer of employment. My husband thinks it is more likely that they will be kept on as contractors, to which he is amenable, as long as our finances are stable.
It is possible that, in four months' time, he will be doing the same job for the same money.
His redundancy payout is just over $69,000 net.
As shown in the budget above, we can live on my salary.
The big question is: what do we do next?
We live in Sydney, where everyone is obsessed with real estate as an "investment", but I know from my time on here that there are better investment options, and I want to keep the money accessible until the work situation is resolved.
Our rough plan
1. Pay off credit card
2. Bank payout in "high interest" (2.85 per cent) savings account until the end of March, when there should be some clarity about his employment
3. Keep a larger emergency fund on hand ($15k?)
4. Invest the remainder of the payout
As I said above, this is his dream job. Some of the guys he works with are scared witless about the layoffs because of their precarious financial situations. The hardest part for us is the loss of this job he has worked towards since he was 16. Financially, we know we are going to be ok. (And I am so grateful that we have spent the last couple of years paying off debt, working our budget, and having conversation after conversation about our financial goals. There has been no talk of shopping sprees, cars or trips.)
Negotiations
The details of his new employment contract - if there will be one - are yet to be confirmed, so I would also welcome any advice on how he should negotiate that.
As I said, they keep saying they want hire them all but that they can't yet make a formal job offer.
The new company said that, while contractors, my husband and his team would be paid their current pre-tax salary plus super. (This means they are forgoing leave entitlements, which is currently 6.5 weeks' annual leave plus sick leave, parental leave, etc).
When my husband asked about leave entitlements, new contracts/salaries, guaranteed CPI increases, etc, he was told they should view this as a start-up (i.e. stop asking for things). That makes me uncomfortable. I understand some people would be happy to take on that level of risk, but these guys didn't apply for a job at a start-up; they went to work one day and were told their jobs no longer existed at their old company.
My husband pays $5/week to use the gym at his current company, and there is a cafe on site. The new company doesn't have offices yet. (The team was originally told they would have to work from home for the three-month contract period. They have since been told they can remain in their current office for that duration.)
The new company is not keen to invest in necessary equipment for staff - who currently use equipment, vital for the job, provided by the old company. (Also makes me uncomfortable.)
There has been no clear agreement on reimbursement for work-related expenses. (Uncomfortable.) Currently they have company credit cards; my husband said one idea is for them to invoice for expenses when they invoice for contract work, with no discussion on what happens after that if this turns full-time.
They did say they would be willing to offer the team shares in the company as part of their salary package. (The team is intrigued by this, but I don't know enough about the company to know if this is worthwhile.)
Other
We are 29, no kids, still deciding if/when we want them.
We have a nine year-old car and my husband has a motorbike which he rides mainly on weekends.
Our transport expenses are artificially low because of his job (cars and fuel provided). A change of employment could see that line item go up.
Apologies for the wall of text.
Edited to note: $69,000 redundancy figure is net.