Cashing in on holidays
There’s an unrecognised cash resource many of us don’t know we have.
And it can be used to get ahead on the mortgage, pay off consumer debts, or just buy the things we need to live a comfortable, modern life.
It’s your fourth week of annual leave, or for the fortunate, that fourth and fifth week.
Employment law says your boss must at least consider requests from employees to ‘‘cash up’’ their fourth week of annual leave.
If you are a good, productive employee, whose days at work are worth your salary, your employer should jump at the chance to get those five extra days of labour from you.
In return you get an extra cash injection into your life.
There’s a lot of people doing it, including many public servants.
Reports to Parliament show that in the past financial year, for example, 133 people from the Ministry of Primary Industries did it. So did 193 from the Ministry of Business, Employment and Innovation. So did a further 635 NZ Post employees.
There were 18 TVNZ employees who cashed up a week of their leave, though a further 33 cashed up more than five days, indicating there are still a few sleek media types with more than four weeks leave written into their contracts.
I reckon these holiday casheruppers probably have a few things in common.
I would anticipate many were young and childless, seeking to use their pre-child years to save a deposit for a home, or pay down a mortgage in preparation for having children.
Others would be older emptynesters without the pressure to make their holidays stretch to cover school holidays.
I’d also expect most were people who liked (or at least didn’t mind) their work, and hence were happy to be there for an extra five days.
I’d guess many were also likely to be were more financially literate than the average employee, though some might have got themselves into a pickle with debt, and were trying to claw their way out by any Build your financial resilience Pay off debts when the going is good Save an emergency fund means at their disposal.
Cashing up leave can also be a means of sticking money in the bank, or reducing debts, if you are concerned about the stability of your employment.
I know folk who do something different, creating a bit of DIY redundancy cover by deliberately taking as little leave as their employer will allow.
They are building a bank of leave days that will get converted to cash should they be made redundant.
As opposed to cashing the leave in and banking it, they are opting to ‘‘leave it in the till’’ just in case it’s needed.
Squireling away leave against a possible redundancy is not a bad idea in a labour market where generous redundancy packages are in terminal decline.
Whether or not you still have an income next month, the rent or mortgage still needs paying, and food still needs putting on the table.