The dreaded word….layoff. It strikes terror in your heart. Worse….it can happen at any time. You work so hard….everyone in the office likes your work…Your team mates and Manager, shower you with praise. You feel indispensable in office. You believe that nothing can happen without you. Then it happens….A manager calls you…Oh, we’re so sorry to lose you….it’s the decision of the top management…there’s nothing we can do about it. Do not lose heart…Your work is top class. Unfortunately …..With the economy in bad shape, layoffs are common. You are tempted to hide this bad news from your parents. Why worry them….they already have enough problems. Then the nosy neighbours. They are spreading vile rumors of you being laid-off, because you were useless in your work….Yes; being laid-off is a traumatic experience.
Remember : Being laid-off from your job is not the end of the World. It happens to almost everyone, except a lucky few. You have a good job? Great….Yet, it would be wise to prepare for a layoff.
Yes…being laid-off is a terrible experience. It shatters your confidence. You get this feeling…. “Oh, I’m useless.” Then another problem…There’s no money. How to manage expenses in these dreadful times?
Getting a new job could take a few months. With no money coming in, you have to think even of the bus ticket, when you are searching for a job. It would be wise to create an emergency fund, when you are working.
You then multiply this amount about 8-10 times.
Remember: You’ll soon be employed. The first thing you do. Fill up the emergency fund.
You hold a good job…money is pouring in. It’s time to blow up money, on all the good things. Money comes….Money goes.
Now you’re facing a layoff. Can you continue to spend heavily? No…of course not. You have to cut down on unnecessary spending….whether you like it or not. Sure…the festive season is just round the corner. Yes….there are some amazing deals offered by internet based retailers….Yes…there are so many things to buy. But, you must simply wait for better times. Good deals will come again. You will soon be employed and you can buy, whatever you want.
Remember: Do not cut down on all entertainment expenses in a layoff. You need some entertainment, to keep your spirits up.
Disease has no place and time. You fall sick and land up in hospital in a layoff….The medical bills will wipe you out. Your former employer’s health insurance, ceases the moment you are laid-off. Who will pay your medical bills?
You must always be covered with a good health insurance plan. Let not a day pass, without health insurance. Avail a good health insurance plan and sleep peacefully, knowing you’re well covered.
Yes, loans are your biggest enemy in a layoff. Paying your loan EMI’s with no job, can be quite a task. This is when your negotiation skills, are most required. Talk to the bank and try to restructure your loan. Have the tenure of the loan extended. Your monthly EMI’s would reduce and you would be able to manage your loans. However there is a small problem….An extended tenure means, you have to pay interest for a longer time. The first thing you do when you get a job? Get back to the original tenure. There might be bank charges, to make these changes in tenure. But…it’s worth it.
What about credit cards? Come what may, make sure you pay your credit card dues in time. Credit card charges interest as high as 24% to 36% a year, on outstanding balance. If you fall behind in payments, you will land in a money trap. If you are forced to borrow in a layoff, avail a personal loan instead of using your credit card. Personal loan charges an interest of around 16-22% a year. This is much lesser than the interest charged on your credit card.
So hold your chin up. Tough Times Never Last, but Tough People Do.Under : Financial Planning