Financially surviving layoffs can be challenging without a Financial Plan
Financial planning for salaried employees are always unique. No salaried employee can be fully prepared for job loss without having a comprehensive Financial Plan in place. The problem is most people do not think of this likelihood till they are actually sacked. Due to Covid-19 pandemic, the fear of being fired by your organization just got real for many. Be it mentally or financially. Financially surviving layoffs is distressing to the core with a disturbed mindset. Any organization, irrespective of its size, may lay off employees for diverse reasons. Organization may be in a financially challenging position or it is trying to internally cut costs. Again, if performances of employees are not up to the mark, organizations may sack employees.
Covid-19 pandemic has had a damaging impact on the economy as a whole. Each and every one of us is bearing the brunt of Covid-19 pandemic in some form or the other. Salaried employees are going through pay cuts and layoffs irrespective of qualifications, designation, age and work experience. Practicing professionals are experiencing reduction in income producing ability. There’s rising poverty levels and ultimately reduced per-capita income.
It is acutely concerning for salaried professionals to financially survive layoffs. Reason being, a salaried employee is accustomed to get a fixed and regular income/compensation. Being a salaried employee, are you prepared to cope up with a sudden layoff? Covid-19 pandemic has weakened the economic scenario of the world. It may be very difficult to find immediate joining opportunities after losing a job.
Financially surviving layoff becomes less distressing when you have you are following your Financial Plan
As Certified Financial Planner in Kolkata, we strongly promote the practice to have a provision for the same in your Contingency Plan; you may be financially surviving layoffs in a structured manner.
Financially surviving layoffs is challenging without a Financial Plan in place
In case you were neither mentally nor financially prepared to face layoff, you may consider the following:
Check availability of liquid assets
Amount of liquid assets will give you a rough idea of how many months you and your family can financially survive without active income. You need to pen down the sources of liquid money. This will include your last drawn salary, savings bank balance, fixed deposits, debt mutual funds, etc. If possible, you should refrain from liquidating your investments in equity mutual funds, provident funds, etc. As Financial Consultant in Kolkata, we are focused in guiding our clients through these difficult times.
Financially surviving layoffs depend on your existing liquid assets and your bare-bones budget.
Review your family budget
As SEBI Registered Investment Advisor in Kokata, we professionally guide our clients to prepare a bare-bones family budget. You need to strictly analyze your family budget to identify the necessary expenses to run the family. You need to meet household expenses. In addition, you cannot afford to stop paying children’s school fees, insurance premiums and loan EMIs (if any). You may have the practice to contribute to your 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 family’s health insurance premiums. This is to safeguard you from any major financial blow due to any unforeseen and negative episode. You need to consider the impact of stopping your investments on your financial goals. If you were building your retirement kitty, what would be the delay cost? If investments were for your children’s higher education, how will you cope up?
You can feel the need to cut down on certain avoidable expenses for the time being. You must stay away from using your credit cards to meet current needs. This would worsen your financial situation.
Once you get an idea about the number of months of financially surviving layoffs on your savings, you can initiate the following:
Evaluate your career opportunities
You may take time to analyse the sector/ industry where you have been working. Self-introspection helps you to realize own strength and lacunae. You may redefine your areas of interest. This would help you to upgrade and present yourself for superior work opportunities.
Start networking
You need to reach out to people and let them know that you are looking for new job opportunities. You may do so via social media platforms, phone and video calls, etc. Since you’ll be having time, you can consider attending networking events specific to your sector/ industry. You can 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
Now-a-days various organizations are offering courses both in online and offline mode. If you feel that you have at least 6 months of savings to run the kitchen and you can find new job within this period, you can pursue professional courses to upgrade your skills and knowledge. This may help you to get better job offers.
Conclusion
Losing a job is intimidating. The thought of financially surviving layoffs can discourage you. But, it is advisable to act mindfully. You need to avoid taking impulsive decisions. Maintaining financial discipline can help you sail through the negative phase. As Financial Advisor in Kolkata, we recommend you to judiciously prepare your bare-bones budget and stick to it while mindfully utilizing your liquid assets. Simultaneously you need to brush yourself up for future window of opportunities.
