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survice-job-loss

11 Financial Tips to Survive Job loss

Millions of people have lost their jobs recently or are on the verge of losing the same due to pandemic which has disturbed the world at large. It going to be tough to survive job loss.

Are you the one who has a job loss or expecting the same in near future due to losses of the organization? Are you financially ready to survive the job loss?

If the answer to anyone is yes, this article would be of great use. Even if you have escaped this, even then you should read and give a thought as the world is not the same anymore and we have entered a recession, that’s Official. How you plan to survive job loss?

Due to pandemic, just like Millions of professionals both in the organized and unorganized sector, you must be under house arrest. As per estimate job loss could be in tune of 136 million and unemployment 27% from the present 7%. It can increase further.

Are you worried as to how to manage finances, if you might lose your full-time job.? If you are worried, your worry has a great reason. Over the past few months, lots of companies have laid-off employees. To name a few Uber (3700 employees), Ola (1600 employees), Cure.fit (600 employees), Swiggy (1100 employees), and TripAdvisor (900 employees). The list is quite long.

Over the next few months, most of the companies are expected to take a fresh set of actions based on revenue and action could range from pay cut to work without pay and maybe retrenchment. The top bosses have already started taking pay cut signaling stringent actions in the near future.

For you and most of the others, this could be a first time experience, in case you have not been hit by it yet, count yourself lucky. Start preparing yourself for eventualities like this as this is yet not over. I am setting 11 pointer strategy which would help you to plan for it and would reduce much of its impact.

Manage Expense Wisely:

This is very important and needs to be dealt with utmost care. You must not have been worried about expenses as there was an inflow or you had some reserve so you have maintained your expenses. You need to divide your expenses under different bucket as:-

Fixed –School Fees, Loan EMI’s, rent, house maintenance fixed utilities, etc. which cannot be avoided.

Essentials

There are certain expense heads like food, school fees which cannot be compromised. But you have the option to control the expense on entertainment or cut down on unnecessary visits to friends and families saving fuel.

Discretionary

Shopping, Entertainment, parties, holidays, etc. you need to cut these substantially. I suggest you should take this off your calendar for at least one year.

You cannot cut your fixed expense but you can reduce your essentials and surely eliminate your discretionary items.

Contingency / Emergency Fund:

This is the fund that you require in these kinds of situations. Thumb rule says you need to have at least 6 months of expense as an emergency fund. These funds should be parked in a liquid fund or saving bank account to earn a few extra percent.

Take a part-time job :

It’s a good opportunity to bring out your talent and earn a few extra bucks. Now everything is moving digital and there is a great demand for professionals and instructors. You need to find what you are best at or you can teach or train, it can be any subject or drawing or cooking for that matter.

The time that was spent on traveling can be put to use here for earning. Even if you have a couple of classes your basics would be easily taken care of, now there are various websites like fiverr.com, upwork.com, freelancer.in etc, just create your account there are a plethora of jobs available.

Upgrade your self :

This time should be used to upgrade your knowledge. You should take a few courses to upgrade knowledge or acquire new skill. This will surely increase your demand in the market. You can various courses available at udemy , coursera.

Don’t Exercise moratorium:

The government has given an option to postpone your EMI’s in case you are not able to pay due to falling in income. Initially, it was 3 months later it has been increased to 6 months. Though it sounds great that you need not pay for 6 months and would enjoy 6 months EMI free life, the truth is it’s going to be very harsh on your finances. Since the bank would be charging the interest, the skipped EMI would multiply because of compounding.

Evaluate your medical cover:

Health insurance has essentially become part of our portfolio and they turn out to be blessings in these kinds of pandemics. Treatment for the disease would cost you a minimum of 5-6 lacs, post-hospitalization extra. I need not say what would be your financial condition if something goes wrong. Health insurance companies have started offering policies that cover COVID from day 1, Like Religare Health.

Evaluate liabilities:

You need to evaluate all your liabilities as they are a drag to your cash flow. You need to list your liabilities in descending order of interest rate. Try to pay off liabilities which are on high-interest rates like credit card and personal loans.

 8 Explore Network :  

It’s a good time for you to reach out to your old network and start building a new one. Trust this is the best investment you would make to your professional life. In today’s time, everybody is having the same set of skill sets and experiences, the one who is having a vast network wins the game.

Loans:-

In case you are in a situation wherein you are finding it difficult to manage money flow and need to take a loan, rather than going for personal loan or purchase on credit card opt for a loan against gold (Collateral Loan). The interest rates on these; loans are low as compare to other loans. The credit card should be used very judicially as the interest rate on a credit card is highest, in some cases it’s as high as 44%. High – Right.

10 Avoid Big / Capital Expenditure :

If you have been planning to upgrade your car or your refrigerator or any other stuff having high money outflow, please wait. You should make the expenditure only when the need is very high. In case you can manage your stuff, it’s better to wait for a few months. 

11 Evaluate insurance policies:

you have time, take out all your insurance policies, and start evaluating them. Try to find what all you need and which not. In case you find some are not worthy get rid of them. Also, check your life cover, it should be minimum 10-15 times of your income.

Conclusion:

You can easily come up with this situation with the right mindset and correct approach towards money. To echo Dave Ramsey

“ You must gain control over your money, or the lack of it will forever control you.”

Thank me by sharing this article…

2 thoughts on “11 Financial Tips to Survive Job loss”

    1. Hi Sagar – Thanks for appreciation – Though it’s still in the testing phase – I plan to go live on 1/7/2020.
      Would love to hear from you
      Thanks

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