How to survive job loss

Finding your name on the list of people to be retrenched can lead to anger, confusion, self-pity and worry.

Media reports about the thousands of Kenyans who’ve lost their jobs as companies downsize after underperforming are a reminder that jobs don’t last forever. And that sometimes, they end when we least expect them to.

Being retrenched can be financially and emotionally devastating, especially if your job was your main source of livelihood. So, what can you do if it happens to you?

1. Draw up a plan

If you want to travel from point A to point B, the first thing you do is map out a route.

When you find yourself out of a job, it’s important to do something similar. Consider where you are and where you intend to go. Much as this may not be an enjoyable task, you’ll need to take stock of your situation.

List your income, which includes compensation from your employer, any savings, and earnings from secondary sources or side hustles and investments. If you’ve been putting money aside for emergencies, losing your jobcounts as an emergency, so these funds will come in handy.

Ensure that your investments are in order just in case you find yourself needing to cash in a hurry in the future. This means sorting out the paperwork for plots, cars or shares.

Trying to follow up on a title deed for a plot you bought years ago when you’re short on time and desperate can be frustrating, so get such things out of the way early.

Identify other possible sources of income that you could tap into if the need arises, such as soft loans from friends or family members, or savings from a chama.

2. Work out your expenses

Once your income column is in order, work on the expenditure column.

List down all your expenses. Separate the fixed expenses or those that you can’t modify, from the flexible expenses or those that you can play around with if circumstances forced you to do so.

Identify ways to bring down your expenses. If you live in a rental house, you might have to consider cutting costs by moving to a cheaper house or one that’s closer to your children’s school so you can reduce transport costs.

Cutting down costs may sometimes mean spending a chunk of money initially to cover things like the costs of moving to a new house or transferring your children to a cheaper school. You’d rather do this early on rather than wait and find yourself requiring money for deposits when you can’t raise it.

Prioritise the basic needs: food, shelter, education for the children and utilities. Draft a plan on how to ensure these are taken care of. You might downgrade the standards of these basics, but you can’t do away with them.

Explore the possibilities of growing some of the food in a kitchen garden or in containers in the balcony, or buying in bulk from the market rather than from the estate grocer or supermarket. Every shilling saved will count, so don’t underestimate your efforts.

Separate needs from wants and cut down on unnecessary costs. You might have to cut down on visits to beauty and hair salons by investing in good products and learning to maintain your own hair at least some of the time. The Internet, especially YouTube tutorials, will come in handy.

3. Prioritise health cover

A sickness in the family can consume all your savings if you have no insurance. Job loss usually means losing the insurance cover you had through your employer.

Find out if your employer will allow you to remain on the company insurance cover, and how much that arrangement will cost you.

If it’s not possible, make alternative arrangements. Research cheaper options, such as the National Hospital Insurance Fund (NHIF), and ensure your cover is up to date. You can also consider paying for inpatient services if you feel that adding outpatient cover will cost too much.

4. Seek support

Speak to your family and close friends, and be open with them about your situation. You need their support and co-operation, so don’t keep them in the dark.

You especially need peace of mind and that can only be possible if they understand what you’re going through. It’s important to have people in your corner who are reaching out to their networks to help you find a Plan B.

5. Renegotiate your debts

Failure to service your debts can cause you a lot of trouble, and even lead to auction. Contact all your creditors immediately you’re laid off and let them know of your situation.

Ask to renegotiate the terms of payment. The worst mistake you can make is to go quiet on them or avoid communicating with them. Don’t risk losing your car or house bought on loan or mortgage. It’s better to negotiate before things get ugly.

A lot of the time, you’ll find some formal financial institutions have a retrenchment cover and will take over your loan repayments for some months.

Be open to other solutions, such as selling the car to pay off the loan or moving to a cheaper house and renting out the one you have a mortgage on.

Stay on top of things and don’t wait for your creditors to decide for you what to do about your debts.  

hustle@standardmedia.co.ke