If you think you will lose your job in the short term, you must take some proactive steps to deal with the situation. This will help in easing the situation to some extent. You should start off with reassessing your financial situation and building an emergency corpus. Buy a secondary health cover and postpone all non-critical expenses. Ask your bank if they can ease your home loan terms. On the professional front, network more, review job markets and try to find a part time job which will compensate the loss in income.
This is one situation everyone dreads - losing a job. In today’s uncertain times, the threat of unemployment looms large in almost every company and industry. A job loss can give you considerable amount of financial and emotional stress. But you can prepare yourself in you think this situation may arise in the short term, and this preparation will help in softening the blow to a large extent. Let’s see a few important things you should take care of:
Assess your financial situation: The first thought which comes to your mind when you think you might lose your job is how you will manage your finances. Although long term goals will also be affected, short term living expenses are more difficult to deal with. So you must reassess your financial situation and understand where you can cut down expenses. Also remember to include all your liabilities in the financial plan to understand the complete cash outflow position.
Activate your safety net: An emergency corpus of atleast 6 months of your expenses should be in place, although this amount can vary depending on your situation. But if you do not have a liquidity corpus already, then you must put one in place immediately. Trim your budgets and your spending to set up an emergency corpus to sustain you and your family for atleast 6 months after you lose the job. Remember to include EMI payments when you consider your monthly expenses.
Cancel or postpone non- critical expenses: Generally non critical expenses are expenses spent on big ticket luxury items. You must necessarily cancel such expenses or atleast postpone them till you are sure about your job condition. Spending on non critical items means you are sacrificing saving, which will help you when you are unemployed.
Buy secondary health insurance: Most employers provide health insurance cover to their employees, albeit a small one. Generally, people simply rely on this health cover and do not establish a secondary health cover. If you are going to lose your job, then you will lose this insurance protection as well. Hence, you must immediately purchase a good health insurance cover, which is suitable for your family. This is one aspect people always tend to forget. Please click here to check out different health insurance options.
Talk to your bank on easing home loan terms: Home loan EMIs are the biggest drain in most households’ monthly expenses. This will be all the more painful when you do not have a job. So be proactive and talk to your bank on how flexible the terms are. You can ask if there is a temporary EMI holiday which the bank provides. You can also ask if the EMI amount can be reduced for some time and increase the tenure of the loan. Once things become better and you are sure of your job, you can reduce the tenure back to original levels by increasing the EMI amount. Remember, shorter loan tenure always works better, as you pay lower overall interest. However, in situations like this, you can do some adjustments to ease your finances.
Network more: Networking is very important, so that you can find out about new opportunities in the market. Professional networking is always important; but when you think you may lose your job, it becomes critical. Join professional associations and networking sites like LinkedIn which will help you get in touch with a wide set of people.
Review job market: Job markets and the skills demanded by the industry are constantly changing. If you have been at your present job for a long time, it is unlikely that you are up-to-date with changing trends in the market. Therefore it is critical that you research and review job markets and assess the need for secondary set of skills which need to be upgraded for better marketability. Also start to actively look out for jobs by getting in touch with your professional contacts.
Find a part time job or freelancing: A part time job or a freelancing opportunity can help a great deal if you are without a job. Agreed, this cannot substitute a regular job which pays you well. But small ideas can lead to bigger things, which will help you in times of crisis.