Getting retrenched?
Don't panic! Here are 10 ways to get your life in order, without unnecessary debt...
More than 100 000 jobs were quietly shed before the end of last year and the retrenchment barometer will go much higher this year.
According to Statistics South Africa, South Africa's unemployment rate rose to 23.5 percent in the first quarter of 2009 from 21.9 percent in the previous three months.
South Africa already has an excessively high unemployment rate and just over half of all South Africans living in poverty according to the Human Sciences Research Council. "We cant afford more job losses", Andre Snyman, CEO of debt counseling umbrella organisation Consumer Assist, said. But many more people will lose work this year as the global financial crisis bites. There are ways to manage retrenchment without incurring more debt.
Sketching the growing unemployment crisis Snyman noted that Statistics South Africa revealed that more than 70 000 jobs were lost to September last year and retrenchments accelerated as the year ended.
The mining industry shed close to 50 000 jobs. The building industry is laying off workers, as developers battle to get bank loans. And construction of low-cost housing has declined by 70%, Snyman pointed out.
Rand Merchant Bank retrenched high-earning investment bankers, Absa is cutting 1210 jobs, Standard Bank has frozen posts and Nedbank will reduce staff by 80. The clothing and textile industry shed 5000 jobs with 20 companies closing.
More than 1 000 car dealerships have closed and General Motors and Ford have retrenched close to 3 000 workers.
The Volkswagen plant in Uitenhage has had short-time for a year. Manufacturing production fell 6.9% in the third quarter of 2008, according to StatsSA. Manufacturing is the second biggest contributor to GDP and employment in South Africa, Snyman said and any reduction in manufacturing production damages exports, sees jobs lost and puts a drag on the economy.
What should you do if you are retrenched?
Consumer Assist debt counsellors all advise: Dont panic!
Have a family meeting; explain the situation and rope in a united response to get back to financial health.
Immediately tell your creditors and ask for a relief period, most will give three to six months where you dont have to pay.
Debt counsellor Johan Zurich points out your bond and many insurance policies carry a three month breather clause where you dont have to pay for those months while you seek work.
Debt counsellor Ulande Janse van Rensburg, who works in the Vaal Triangle which has been hard hit by job losses, says it is important that you keep creditors who give you relief informed. Ask those who turn down your job applications to give a letter saying why and show it to your creditors. It is important that they know you are trying to get work. An honest relationship works in your favour.
As soon as you get a job let creditors know and negotiate a lower rate of repayment. If you dont know how to do this a debt counsellor can help for a small fee.
Go to a debt counsellor for help.
Apply for unemployment insurance if you qualify.
Don't take out new loans or credit.
Don't cancel insurance, you can do without medical aid because there are public hospitals but dont cancel car or household insurance.
If you get a retrenchment package first pay off debt, then invest in a high-yield savings plan so you can draw money if you need to while your money earns interest.
Keep all documents between you and creditors, dont speak to them over the phone or post letters, email or fax them so you have proof. If you do speak to someone in person, note down his or her full name and job title, the date and time on which you spoke to them and what was said.
Learn a new skill in an area where jobs are needed, for example, although there is high unemployment in SA there are also massive skills shortages in areas like teaching, nursing, pharmaceutical work, engineering, technical skills and information technology.
Do odd jobs, part time or consulting work.
Cut out unnecessary expenditure especially cigarettes and alcohol.
Consumer Assist have had clients who got divorced so they could access the mans pension package half of which a divorced wife is entitled to its a terrible idea, it will damage the marriage and your later retirement plans, she counselled.
Snyman said families should share ideas on how to cope: South African debtors are struggling to pay more than R950-billion, according to the National Credit Regulator. Its easy to get into very serious debt and hard to get out.
We have a 24 hour call centre 0861 21 22 23 that works every day of the year helping those in debt and an interactive website www.consumerassist.co.za with a debt calculator. Dont wait before you seek help.
Do you have any more advice? Share them with us in the box below.