Albertans are living in economically uncertain times. Many of my clients are worried about job security, and some have even been laid off.
Because a significant part of Alberta’s economy is tied to non-renewable resources the low price of oil has a ripple effect through the economy. Even if you are not directly employed in the resource sector your job is most likely affected.
If you have been my client for any length of time you know that I am a big fan of the 2 Ps prevention and preparedness. Those 2 Ps are the foundation of financial success.
Since we all have known for some time the economy is slow all of us should be trying our best to save for a possibility of no or less work for an extended period of time. Yes, there is always EI to fall back on, but the maximum is only about $900 biweekly and it only lasts one year.
So the first step in being prepared is to have a financial safety net. And no, that is not a line of credit or credit card. You don’t want to borrow the bank’s money and put your future self in financial jeopardy.
The second step is to OWN your cash flow. You can’t own it if you don’t know it. Everyone who is serious about their financially secure future knows where and how they spend their hard earned dollars. Go over your spending habits with a strong magnifying glass. Ask yourself, what is a need and what is a want. What is an expendable and what is a necessity. Ask yourself what you could cut out if your boss told you your salary would decrease by 5% or if you could only work 3-4 days a week.
If the worst happens and you get surplused then you are prepared. The first action you should take is to call me.
Often but not always, an employee will receive a severance upon termination. It is crucial that you get advice as to how best to receive that severance. Sometimes options are available to minimise the tax burden that a severance will create. Every employee’s situation is different and I won’t go into all the possible scenarios here. It is very important to get professional advice both to decrease the tax liability and to make sure the severance serves its purpose: To tide you over until you are working again. For my clients who have experienced job loss they were grateful for the questions I asked, that helped them negotiate a most difficult time in the most positive way possible.
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