Taking back control if you are unable to work due to retrenchment or illness
Financial adviser Phillip Kassel looks at how you can take back control of your life if you are unable to work either due to retrenchment or illness.
Life is at its best when you feel valued, cherished, stimulated, challenged and doing something worthwhile – this usually means that you are employed and earning an income.
But what happens if that income is suddenly taken away, either as a result of retrenchment or ill-health?
Any emergency service ensures that there is a plan to limit the effects of a potential disaster (by putting safety procedures in place) and then there is a plan to follow should disaster strike.
Similarly, in one’s own life the best way to deal with disaster is to have a plan. By putting a plan in place, you regain control of your life
Be prepared: Life is uncertain but you can lower the risks of financial disaster by taking out insurance cover that is in line with both your needs and affordability. There is a full range of risk cover that will pay out if you become disabled, are too ill to work or even if you are retrenched. There is even cover if your children become ill and need specialist care.
Keep up to date: Review your requirements as your lifestyle changes. For example, as your salary increases so will your lifestyle and you may find that you need more cover in the future.
Self-insure: If at all possible, try to build up a reserve of cash that will cover your lifestyle needs for a period of time. Nine months is ideal, but aim for at least a stockpile of three to six months.
When disaster strikes
Get good advice: If you are retrenched and receive a package, immediately contact a financial adviser. Unfortunately many employers do not understand the law relevant to the retrenchment process. If you receive a lump sum as a result of retrenchment or disability, you need to decide what to do with the money. You will most likely also have a pension and / or provident fund that could be used to support you therefore it is advisable to get hold of a trusted adviser to guide you through the entire process.
Pay off debt: Generally it is a good idea to pay off debt first, but you need to assess which debt takes priority. Start with the debt that is costing you the most and work from there.
Sign up: If eligible, register for UIF benefits
Budget: Cut down on those items that you would now consider ‘luxuries’ such as DSTV, take-away meals, traveling by car when there is public transport available, etc. There are countless ‘free things’ available that we don’t explore when the money is coming in every month.
Have a work mentality: If you have been retrenched begin each day as though you’re going to work: prepare your CV; phone placement specialists; contact colleagues (past and present) to spread the word; phone HR departments of companies with whom you’d like to be associated; drive around areas where you’d like to work and see whether any new developments are about to launch; scan those classifieds, in both the general media as well as specialist publications; and perhaps finally, make use of the internet in all its guises to see whether you can get your name into the public domain to secure your next career move.
Don’t be picky: If you are retrenched don’t try and hold out for the best job especially if your cash flow is being severely stressed: put your pride in your pocket and take anything that will result in income flow. Look at self-employment options such as offering handyman services, baking cakes or making sandwiches to sell to local office complexes.
Don’t panic: While being entrepreneurial can be a positive step, don’t sink your money into the first opportunity that comes along. Do your research carefully and get advice.
If you have a plan and keep persevering, you will not see yourself as a victim but rather present a positive image that will attract a positive response.
Fleishman-Hillard | Digital. Integrated. Global.
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