Before I continue, let me say here at the outset that I recognise that compared with many of my fellow unemployed having this dilemma is something of a luxury. I didn’t leave my job empty-handed, and looked at as a number my redundancy payment seemed quite a big number. It certainly represented by some distance the largest amount of cash that I’d ever had at one time in my life before. At first I was mostly concerned with putting it out of harm’s way, and working out how to maximise the interest that might be paid on it. That seems frankly laughable now as my lump sum coincided with the fastest and most dramatic decrease in interest rates ever seen since the Bank of England’s institution.
When I first got my notice, my natural inclination was to stop spending immediately. Certainly I didn’t want to spend any significant sums beyond day-to-day living. My wife didn’t see it that way, and I could understand her reasoning. We had already planned to spend some money on our house, for work that really needed to be done. If the worst case scenario were to play out, this investment would probably mean that we ran out of money a couple of months earlier than we would otherwise have done. But at least the work would have been done, and we would have lived more comfortably. And if I were never to get another job, then the chances of ever getting the work done would be zilch. What benefit would two extra months before hitting the crash barriers really give us?
And then there’s the psychological aspect. One of the key difficulties I’ve experienced has been, if not depression, then at least anxiety. Living as if every pound might be the last simply exacerbates and magnifies the sense of gloom. On the other hand, spending whilst not knowing where the next income is going to come from, or if it’s ever going to come, is unnerving to say the least.
So there’s no easy answer to the question. Sometimes it feels like an unenviable choice between penny-pinching misery or rising anxiety. Actually, it feels a lot like both.