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4 Step Plan For Surviving A Job Loss

    IndianMoney.com Research Team | Wednesday, May 17,2017, 06:54 PM
 

 

It's a recession when your neighbor loses his job; it's a depression when you lose your own.

                                                                                                                                                                                   Harry Truman

Yes, it's the season of layoffs. Infosys may ask nearly 1000 senior, mid-level employees to leave. Tech Mahindra could layoff more than a 1,000 employees. Wipro has asked more than 600 employees to leave. Cognizant could layoff around 6,000 employees. A very famous executive search firm says, job cuts in the IT Sector could be between 1.75 Lakhs and 2 Lakhs annually for the next 3 years. A McKinsey & Company report says half of the IT workforce will be irrelevant over the next 3 to 4 years.

Its  Man vs Machine. Automation and robots are stealing your jobs. Automation is stealing jobs in IT Firms, Banks and even the BPO Sector. Robots are stealing jobs in the automobile industry. India is staring at its worst job crisis in years and you better watch out. Your job is under threat. What if the worst happens? Are you prepared to survive a layoff? If not you better read the 4 Step Plan For Surviving A Job Loss.

Want to know more on investment planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

 

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4 Step Plan For Surviving A Job Loss

 

Your job is safe. Great....There's nothing like it. But, that pink slip can come anytime. You better be prepared.

 

1. Create an emergency fund and prepare for a layoff

 

Like to splurge with no care for tomorrow? You better watch out for that layoff. Better to be prepared than cry later. Create an emergency fund as a backup for these difficult times.

Thumb rule for an emergency fund:

If you are unmarried, better have at least 3 months of living expenses in your emergency fund. If you are married, it should be at least 6 months of living expenses in your emergency fund.Keep the money you need for an emergency fund in liquid assets. Keep half the money in a savings bank account or a sweep-in fixed deposit. In a sweep-in fixed deposit, your savings bank account is interlinked with a fixed deposit.

The money which is lying idle in your SB account is converted into an FD and earns interest applicable on a fixed deposit. When you need to withdraw a very large sum from your SB account and funds are insufficient, the money from your FD is swept into your savings bank account. The remaining money for your emergency fund can be stored in liquid funds. Liquid funds are simply debt mutual funds that invest your money in very short-term market instruments.

 

2. Make a household budget and get ready for a layoff

 

A budget will help you limit your expenses. Divide your expenses into discretionary and non-discretionary expenses to manage them better.A well planned budget not only helps you enjoy a reasonable standard of living, it also helps you achieve progress on getting to long term goals.

Yes, Layoff can be a difficult situation and you are tempted to cut off all expenses. This is wrong. Make sure your budget allows for a little spending in these tough times. Cutting off all spending in these times can lead to depression. Layoffs are not permanent. You will soon get a job.

 

3. Do not stop your Equity Mutual Fund SIP's in a layoff

 

You may be tempted to stop your Equity Mutual Fund SIP's in a layoff, but should you do so? Your argument....Money is going from your account. There is time for SIP's later. Stopping SIP's of equity mutual funds in a layoff can affect your financial goals. If you have enough money to manage household expenses for the next 3-6 months, you must keep your SIP's running. Take a look at your financial situation. If your spouse is earning, you can easily continue your SIP's. If you are not facing too much of a money problem and you expect to get a job soon, you must not stop SIP's.

 

4. Get a health insurance plan and protect your money in a layoff

 

Your employer provides you with a health insurance group cover as long as you are working for him. What happens in a layoff? If you lose your job, you are no longer covered by the health insurance group cover. Hospitalization can blow away your savings.

Follow this important rule: Make sure you are covered under a  health insurance plan, every single day. Avail a health insurance plan even if you find the premiums a bit high in these troubled times. In case you fall ill during a layoff, the insurer will settle the hospital bills.

Many citizens are working in the corporate sector and layoffs are a way of life. You never know when you get that dreaded pink slip, but it would be wise to be financially prepared for it. This 4 step plan for surviving a job loss should prove very handy in a layoff. Be Wise, Get Rich.

 

IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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