We are seeing retrenchments like we have not seen before and we are likely to see more retrenchments in the coming months. Being retrenched is emotionally challenging. The prospect of being unemployed and unable to maintain your standard of living can be stressful.
It’s very important that you have someone to talk to your partner or a friend. Don’t keep everything bottled up. I remember when I was retrenched I was very angry. I was angry for a long time. It was only when I started to talk to my wife and told her how I felt could I come to terms with it. If your company offers counselling use the opportunity.
Be smart make your money last.
Budgeting is the process of creating a plan to spend your money. This allows you to plan your spending in advance and prioritize your needs to avoid wasteful expenditure. List each and every expense be brutal look at every item and see where you can save money. Look at all your policies, short term insurance medical aid, etc. You may have to downgrade to a different medical aid plan. You may have to change your car insurance from comprehensive to third party, talk to a professional.
Register your UIF claim.
Register for UIF online as soon as possible on hhttps://www.ufiling.co.za/uif/unemployment-benefits.
Don’t just pay off your debt with the cash you have. He who has money has power. Negotiate reduced settlement balances. Your creditors will understand and will only be too happy to give you a discount.
Understand tax on severance tax package.
The severance part of your package is taxed in terms of the retirement tax tables. Leave pay, notice pay and any other gratuity payments are taxed in terms of the income tax tables. Understand the tax implications to maximise your tax free amounts. Ask your employer if they can do a tax simulation exercise to see how much tax is payable.
Preserve your retirement benefits.
The severance part of your package will erode your R 500 000 tax free portion on retirement. Speak to a profession to get sound advice. Preserve your Pension/Provident Fund in a Preservation fund you will need this one day when you retire.
Risk benefits on your Pension/Provident fund.
Check whether your employer’s group life provides you with a continuation option which will allow you to take out life cover without medical underwriting.
Stop investment premiums
If you are contributing to a discretionary investment, consider putting your investment contributions on hold for a while. If you are contributing to a unit trust you can stop and start your contributions as you like without any penalties. If you have retirement annuities, consider making it paid up. You can always reinstate it late.
Your home provides security for your family. If you have enough money, try and settle part or your whole bond. Make sure its an access bond so you can access money in the event of an emergency If you foresee that paying your bond instalments may be a problem, make contact with your bank urgently.
Contact your credit life insurance
Your creditors are likely to be more sympathetic and accommodating if you honest and upfront with them. Check all your accounts for credit life insurance. Understand what is covered and what is not.
Enrol for free online courses-start an online business
Job hunting can be difficult, update your Linkden profile. Do online courses.
Investigate what online business you can start. Everybody is buying online. What business can you start that will make people’s lives easier, save them time or save them money?
Source: written by Clive Harper
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