Over the past few months, many employees have lost their jobs due to company layoffs, including those from major corporations like Amazon, Google's parent company Alphabet, Microsoft, SAP, and IBM. Losing a job is never easy. It can be a stressful and overwhelming experience, especially if you are unprepared for it. But the good news is that there are ways to manage your finances during this tough time. As Arijit Sen, a SEBI-registered investment advisor and co-founder of Merry Mind, a Kolkata-based financial advisory firm, explains, "Financially surviving layoffs is distressing without an all-pervasive financial plan."
Here are some steps you can take to manage your finances if you get laid off from your job:
Check Availability Of Liquid Assets: The first step is to evaluate how many months you and your family can financially survive without active income. You need to identify your sources of liquid money, including your last drawn salary, savings bank balance, fixed deposits, debt mutual funds, and other investments. "However, you should refrain from liquidating your investments in equity mutual funds, provident funds, etc. As a financial adviser, I suggest creating a bare-bones budget to determine the necessary expenses to run the family," adds Sen.
Review Your Family Budget: It's important to strictly analyze your family budget to identify necessary expenses, such as household expenses, children's school fees, insurance premiums, loan EMIs, and contributions to elderly parents. Although you may have to temporarily stop your investments to preserve cash, you should never consider not paying your life insurance premium and your family's health insurance premiums. Likewise, avoid using your credit cards to meet current needs, as this would worsen your financial situation. You should also consider the impact of stopping your investments on your financial goals, such as retirement planning or children's higher education.
Evaluate Your Career Opportunities: Analyze the sector or industry you have worked in. Self-introspection can help you identify your strengths and weaknesses and redefine your areas of interest. This will help you upgrade and present yourself with superior work opportunities.
Start Networking: Reach out to people and let them know you are looking for new job opportunities. You can use social media platforms, phone and video calls, and attend networking events specific to your sector or industry. Join various relevant groups to look for new opportunities and stay updated with recent developments in your field. Accordingly, you can prepare yourself for fresh opportunities.
Upgrade Your Skills: Various organizations offer courses in online and offline modes. If you feel that you have at least six months of savings to run the kitchen and can find a new job within this period, you can pursue professional courses to upgrade your skills and knowledge. This may help you get better job offers.
Getting laid off from a job can be a challenging experience, but it's essential to have a plan in place to manage your finances during this time. Evaluate your liquid assets, review your family budget, evaluate your career opportunities, start networking, and upgrade your skills. By taking these steps, you can increase your chances of financial survival and emerge from this experience stronger and more resilient.
