Since 2015, termination issue has been shown frequently in printed and online media. Reportedly, decelerating of global economic growth and falling of commodity price are the main reasons for some companies to reduce their employee numbers. It is being done to cut operational costs because of on-going loss occurred.
Among industries, oil mining is the industry which faces severe loss due to decreasing price of oil crude from around $100/barrel to $30/barrel. Forcefully, oil companies must sack employees from all levels. This event has been previously occurred in the financial industry on 2008 due to the subprime mortgage crisis.
From those events, we may conclude that termination risk will always attach to each employee regardless of their position or loyalty period to the company. However, its force is varied among factors such as company status (state or private) factor and company’s vulnerability toward crisis. So, it would be best for each employee to anticipate the risk so then it will not cause severe harm in the next day.
1st Preparation- Emergency Fund
An emergency fund is a stash of money set aside to cover the financial surprises life throws your way (www.investor.vanguard.com). Job loss is one example of financial surprises life throws. Due to its main purpose for immediate use, the fund must be allocated in liquid assets such as saving and term deposit. Emergency fund can be used to pay daily expenses during adaptation period when looking for new job or starting up a business. (detail information about emergency fund can be read on articles Emergency Fund)
2nd Preparation- Limit Shopping and Entertainment Budgets*
If your company or industry where you work on is vulnerable to crisis such as oil mining industry (current), you should limit your shopping and entertainment budget. Otherwise, those funds should be allocated for investment.
3rd Preparation- Protect your Family with Credit Insurance
If you want to buy a product on credit, it would be wise for you to consider credit insurance especially if the credit being taken is in huge amount and within a long period. Credit insurance is an insurance aimed to secure your obligation to pay off credit in the case granted risks occur in the future. For instance, remaining credit balances will be covered by insurance companies if the beneficiary is death. So, bereaved family will not inherit a duty to pay off the credit.
Generally, credit insurance only covers death and accidental risk for the beneficiary. Besides, you may consider to enhance your protection by adding a rider (additional insurance facility) named PHK credit insurance. The insurance will give protection to pay off credit in case the beneficiary lost a job due to termination.
Get ready to prepare yourself!
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