Avoid emotional stress by preparing for retrenchment
Posted Sunday, July 29 2012 at 16:41
Retrenchment comes with an abrupt loss of income and a whirlwind of emotions.
Sometimes the emotional stress can be overwhelming , especially if you have to figure out how to maintain your lifestyle with no certainty of getting an alternative source of income any time soon.
When the emotional stress is not dealt with, there is always likelihood of stress-related medical complications such as trauma, shock, hypertension and stroke which result in additional expenses in terms of medical costs.
Certainly, you need emotional counselling. That’s why you have to talk to the company’s psychologist before you leave the company.
But how effective are the emotional counselling sessions to a retrenchee whose worry is how to maintain a standard set of lifestyle without much financial headache?
Financial distress after retrenchment goes far beyond the emotional stress of learning to accept the loss of income and leaving with it. This is what most employers have never discovered.
One has to settle down to balance the equation of maintaining continued expenditure even when no source of income will be trickling in, repay outstanding debts and ration your source of livelihood which is the emergency or buffer fund .
Preparing for an impending retrenchment involves two levels; before the actual retrenchment and immediately after the retrenchment.
You don’t need to wait until you are shown the door and get your handshake to start putting your things in order. The following are preparations that you need to make before being laid off.
You need to seek ways of reducing your recurrent expenditures by rationing on both your fixed and variable expenditures. Because fixed expenditures are always recurrent and are the sole source of financial stress, you need to keep within the lowest bar possible.
For instance, you can consider moving to a cheaper house to save some cash for other purposes. Also ratio your variable cost by cutting down on the unnecessary expenditures like entertainment.
Build up an emergency fund
You need to build up an emergency fund if you have never had one or replenish it incase you had dunked into it to overcome some emergencies.
The amount to be saved in an emergency fund will depend on you but given that you have a bump a head, you need an equivalent of at least six months of your monthly expenditure.
A lower level of the cushion is also advisable when you are crossing over to another job rather than being retrenched.
The gravity of this cushion is that it will be your only source of livelihood as you seek an alternative source of income.