By Kaelanne Jordan, email@example.com
When you are unemployed, your life changes radically—professionally, psychologically and financially. Bills you paid regularly/monthly continue to come in, but your income has been severely compromised.
Susan Romano-Davis, Director of Sumar Consultants Limited, a consultancy firm specialising in Financial Literacy advises that while you are exploring your options for returning to the workplace, you also have to adjust your day-to-day existence to reflect your new economic reality.
In October of 2018, Sumar Consultants gave financial input/support to retrenched Petrotrin employees at the St Benedict’s RC Church, La Romaine. Romano-Davis, a parishioner and lay minister at St Benedict’s shares the following advice.
Communicate openly with family. Have a family meeting. It’s not business as usual. Sometimes we think we should hide these things from children but they are a part of the family. Be honest!
Create a personal Balance Sheet. This will provide an overall snapshot of your current financial position by examining your assets (what you own), your liabilities (what you owe) and your net worth (assets minus liabilities). This would provide insight into your past behaviour understanding what you would have done right and what may need to be changed going forward.
Scale down expenses. Assess what is fixed and what is variable and then seek to find ways to scale down the variable. It is about choosing wisely where you want money to be directed. For instance, Romano-Davis recommends persons shop around and compare prices at the various supermarkets and for those who like planting start a home garden to reduce costs and also eat healthy.
Prioritise your needs. Determine what is of immediate importance. Romano-Davis observes persons may be more inclined to pay-off big debts such as mortgage and car payments. Instead she advises “Look at repaying the high interest debts first”. Debts such as credit cards should be of priority. Further she warns “do not be afraid of having a conversation with the financial institution or an experienced/professional financial adviser” as it is important to seek professional help at this time.
Have an Emergency Reserve. If you received a severance package, Romano-Davis advises to secure funds in a money market account that would be easily accessible to take care of those monthly/annual commitments until you start back working. And even when you start back working you should always have that Emergency/Opportunity Fund to cater to the “what ifs” that life presents. A Money Market or Income Fund account is one of the best instruments on the market for that purpose. It is an interest-bearing account that typically pays a higher interest rate than a regular savings account and whose interest is compounded daily.
Find ways to make extra income. Find a hobby that you can turn into an income-earner. Ask yourself: ‘What am I good at? What am I passionate about? How can I use my talent to increase my income?’
Let go of false pride. Romano-Davis maintains, if you need help, ask. “Ask the church, your extended family…pool resources, carpool and save on gas….That’s why pride is one of the seven deadly sins,” she says.
Review risk management plans. Job loss means loss of health insurance and other benefits. She advises persons to review their portfolio to ensure that they have their personal plans in place to take care of their specific situation.
Seek wise counsel. Romano-Davis observes that too many persons “run down” quick money [schemes] without asking questions. She urges persons to do business endeavours with legitimate persons. It is also critical that persons understand the different types of business such as Sole Trader, Partnership, Limited Liability Corporation and the pros and cons associated with each type of business.
Deepen your spiritual journey. Romano-Davis said “every year I name my year. I speak what I want into the year… the word made flesh.” She calls for persons to “name” their year. For instance, she has declared “2019 Year of Faith…Everything is possible for the one who has faith.” Even in these situations God is with us. We just have to believe.