By Zuko Komisa
Faced with the possibility of losing your job, it is easy for panic to set in as you consider your mounting monthly expenses and dwindling bank balance. Gugulethu Mpufi recently spoke to Eunice Sibiya on #KayaBizz about how you can get yourself ready for the unfortunate reality of retrenchment.
Evaluate your expenses
If you got a letter today saying you are going to be retrenched how would you pay for all your monthly expenses? Debts such as medical aid, car and house payments and school fees do not stop, but there are ways to manage your financial affairs to navigate through this time. It is important to realise that retrenchment is not always negative.
Don’t use debt as your back up plan
Many don’t plan for the probability of retrenchment. When asked how they’d survive retrenchment they say they’ll use loans and credit card when it happens. It’s important to plan, as loans and credit card money is not your money and will eventually have to pay back with ridiculous interest rates.
Coupled with getting yourself in debt following a retrenchment is the debt you already have, Eunice Sibiya advised Afropolitans to have this in mind while planning.
“You may be in line to receive a good payout from your employer, but may also have a long list of debt on the side. These may cancel each other out and you are left with close to nothing”
Listen to the conversation here for more tips to consider:
Understand your industry?
How volatile is your industry? One of the most important things to consider when you are doing planning is to be fully aware of the trends within your industry. Examine the current performance and look at the economy and how it impacts your environment.
Are you a freelancer, or have a permanent contract?
It’s always important to note what your contract with your employer says should you be retrenched. Freelancers and contractors tend to walk away with nothing during retrenchment processes.
Important things to note:
- It’s better to see a financial adviser before anything goes wrong to plan for any eventualities
- Retrenchment cover is important to have
- Get in the habit of having less debt and payoff current debt
- Don’t be paranoid, but make sure you plan for the unknown
Should you get retrenched – Get your house in order:
– Call your creditors
– Claim your package, UIF and other insurances you have
– Update your C.V, register on career portals
– Consult, consult, consult. Get as much advice as possible
– Manage your finances – Know the percentage of your income versus expense and where your payout will go should you get retrenched