Global statistics indicate that 50% of marriages are ending up in separation or divorce. In almost all the famous words, “Until Death do us Part” form part and parcel of the emotional vows publicly declared by the two parties. Unfortunately at some point both people, despite vowing to stay together for life decide that they have irreconcilable differences and life is better off alone. This week we have all been hearing news of the big companies downsizing or retrenching. As at the date of this article one of the biggest banks in Kenya had already laid off 200 senior staff members, and there was talk of other big banks following suite. In Corporate speak they like to call it “realignment geared to improving productivity and efficiency”. It sort of downplays how many actual human lives have been affected by this. In one of the reports I saw, the effects had been drilled down to a percentage -6%- which in their thinking doesn’t make the institution appear so heartless. When you start a career or job especially in the big brand companies you experience a sense of achievement and progression. The interviews you went through proved that out of the other 100 people who had applied for the job you were first among equals. You worked diligently, rose in the ranks and were proud to say you worked at this company. The brand of your employer even opened doors to people and places that you would have otherwise not met. Other people talked about you in terms like “Have you met John of XYZ Ltd?”. It did not matter who John really was, his hobbies, his family status, his financial status. All that mattered was John worked at XYZ. That was all one ever needed to know. John and his employer were a marriage made in heaven or were they?
Divorce in marriage is a painful affair because you are dealing with the varied emotions of hurt, anger, denial, fear that two people are going through. However at the end of the day two people put pen on paper and end the status of the relationship as man and wife. In retrenchment however only one party puts pen on paper and that ends the status for both of you. I spoke to a few people when writing this piece and most of them said the biggest shock was the realization that you were never in control of this relationship. Because of the identity people have built around the employer you realize that this translates to loss of control of your own life. One of my friends who has been affected by this exercise asked me “Who am I without them?”. She told me the biggest shock is waking up and realizing that you do not know what to do with yourself. This is a dangerous place to be in because not only are you dealing with various emotions but you have probably received some sort of payout. Now money in the bank plus depression usually leads to rushed spending. You may spend either to make yourself feel temporarily better or rush into investment decisions to get some feeling of security back in your life.
Someone who had been through this previously told me at some point you will realize life must go on. The child still needs to eat breakfast, KPLC will not stop billing because of retrenchment, mortgage payments will fall due etc. The biggest change is that for the moment you do not have a stream of regular income. However you have received a lump sum payment of some sort. It could be your pension, an exit package or a combination of both. So what does one do about money?
1) Draw up a budget. Isolate the “Needs” from the “Wants”. “Needs” relates to food, shelter, education, clothing, transport. “Wants” relate to Cable TV, Entertainment, Magazines, daily coffee at Java etc. Cut down on the wants as much as possible. It is no longer necessary to spend money on the latest phone accessory. By cutting down on the wants the money you have will take you further.
2) Keep money worth three months of needs. Since you are already accustomed to monthly payments, you will need to break out of this slowly. Put one month of needs in your current account. Put the other two months in a savings account or a money market fund and you can draw on it at the end of every month. If you put the three months together in one place it may be hard to resist temptation to overspend.
3) Invest the rest of the lump sum somewhere safe and liquid ( i.e. easily convertible into cash). You don’t want to go into something risky until you are absolutely sure that you are back to operating from logic and not emotion. Your options here could be bonds, money market funds, fixed deposit accounts etc. These instruments will pay you some sort of interest and they will also keep your capital safe.
This will give you the much needed time to think and plan for the next phase of your life whilst ensuring that you have money to live on for the short term as well as some kept aside as you plan. This is the first step towards gaining a sense of financial control over your life. The big lesson is definitely never to hand that control over to someone else. If it is investments you wish to pursue with the lump sum this time will allow you to do your research properly. If it’s business you want to pursue you have time to draw up a business plan, conduct market research and get that first client. If you want to go back into the job market, you have time to start looking for the kind of job you really want.
For those who are in employment, always remember the winner stands alone. This is not a guaranteed lifelong commitment. At some point the people sitting in an office that may even be several continents away from where you are now, may view you as an expensive statistic. Nothing stops you from starting to ensure you are in control of your own life. Start working on that business idea that has been toying at the back of your mind. Use the income you are currently earning to invest in ways that generate cash flow for you making you less dependent on a salary as your only source of income. Remember to always build your own brand and not only that of your employer. Whatever experience, knowledge, networks, determination you have belong to you and not XYZ Ltd.
Waceke Nduati-Omanga