parent opinion

'I’ve just lost my job. How TF am I going to pay my mortgage?'

In this new Mamamia series, Curveballs, we get in experts to help support you through those tricky life situations, from finance worries, relationship challenges and career to your health. This week, financial advisor Renae Vercoe shares practical advice to a woman who has recently been made redundant at work...

"I've just lost my job and I'm worried about how we'll pay off our mortgage. Between my husband and I, we have $24,000 in savings and a monthly mortgage repayment of $3,700 on a fixed interest rate that is going to expire in a few months. My redundancy pay was only $10K, which is accounted for in that savings amount. We also have quarterly strata fees of $2K, plus daycare fees, on top of all the usual living expenses, like food, nappies, and formula. I feel anxious about it all. I'm not sure how long it will take me to find another job. What do we do?


I’m sorry to hear you are going through a stressful time. It’s always unnerving navigating change and uncertainty.

Many Australian families are feeling the pressure of rising interest rates and also many find themselves in a similar position to you in terms of their low fixed rate expiring soon, your bravery in asking the question will help many people.

What I’m really pleased to read is that you have some savings. I can’t stress enough how important it is for people to have some emergency savings put aside for situations just like this.  

Watch the 5 money lessons your parents told you, that you should probably forget. Post continues below.


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Take a deep breath and let’s step you through what you need to focus on doing right now.

Firstly, I want you to do a very detailed budget or ‘spending plan’ as I like to call it. You need to know exactly what your family's numbers are. If you need a template, here is one you can use.

It’s important to understand your spending on three levels, which are our essentials, our needs (living) and our wants (lifestyle), and these are the order of priority in which expenses need to be provided for. 

Your essentials (or ‘non-negotiables’) are all the fixed bills you have to pay.  Think of this as your shelter and safety spending. It’s your mortgage or rent, rates, insurances, body corporate, utilities, essential registrations etc. 

Your living expenses (or ‘needs’)  are necessary expenses. However, they’re a little different to the essentials because the amount you spend here has a discretionary element to it and can vary greatly based on your circumstances, choices, preferences and lifestyle. Included here are your day-to-day essential living expenses such as groceries and transport costs.

Your lifestyle expenses (or ‘wants’) is the category of expenses that are discretionary and they add a little joy, luxury and convenience to our lifestyle. Things like eating out, takeaway, shopping, hair and beauty, streaming services. It’s important to keep our spending here in balance, but also set ourselves an intentional budget so that we can enjoy it without compromising our essentials and needs or our long-term goals.

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Once you’ve got all your expenses down, you can start to analyse them, spring clean them and review what’s staying. You might be able to cancel some items during this period until you are working again (for example, streaming services), and for others it will be a case of renegotiating, getting a better deal and if needed asking for a payment pause.    

Understanding your numbers will also help you understand how long your savings can support you while you’re out of work. 

Listen to this episode of What The Finance on sorting out your super. Post continues below.

Psychologically, watching your savings decline is going to be stressful unless you become really intentional and systemised with how you use this money. To take the stress out of the day to day, create separate bank accounts based on our three categories: Essentials, living expenses and lifestyle and set up weekly transfers based on your numbers/budget.  

Giving yourself a ‘weekly’ allowance will ensure you don’t overspend. This system of money management will give you control over where your money is going and I'd encourage you to continue with it once you get that next job to rebuild your buffer or emergency funds and of course, grow your savings.

When it comes to your mortgage, there are some ‘short-term’ things you can do. As your fixed rate term approaches, contact the bank and explain your situation. The banks don’t want to lose their customers so make sure you ask them for the sharpest rate possible.  

They also don’t want to see people in hardship, so if you are struggling to make the repayments you may be able to get some relief through a repayment pause. This adds to the life of your loan, but it can provide some short-term cash flow relief if you need it. 

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In regards to daycare, talk to your provider about the change. You may be able to pause your position for a period if this can work for your family.  

Make sure you also update your changes with Centrelink. If your redundancy included a notice period/weeks of pay (most likely), this will still be treated as taxable income and need to be part of your estimated income for the year. It’s best to call them and explain your situation and make sure you update your family income estimates correctly so that you get the correct childcare subsidy and also to find out if you may be eligible for the temporary financial hardship subsidy

Remember that emergency savings are there for this very reason. Don’t be afraid to spend them and once things get back to normal you need to focus on building them back up again. My rule of thumb is to have a minimum of three months (ideally closer to six) of expenses set aside purely for emergencies.



Renae Vercoe is a qualified financial adviser with over 20 years' experience. She founded Money Mode in 2018 with a mission to make financial advice more relatable and accessible.  She recently opened the doors to the passion project, the 
Moneymode School, which is an online program guiding women through everything they need to know about money (that they didn’t learn at school!) so they can confidently build their financial independence.

Disclaimer: Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives. 

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