The coronavirus outbreak has lead many companies to turn to downsizing in order to cope with the fall in their revenue. Some sectors, such as aviation, hospitality and travel/tourism have been forced to completely suspended their operation. The Centre for Monitoring Indian Economy (CMIE) estimates show that the unemployment rate shot up to its highest, at 27.1% by May 3 itself. Out of the 122 million people who lost their jobs in the pandemic, about 75% of them were small traders and labourers. But apart from this, salaried employees have also been laid-off or have faced a pay-cut as big businesses also struggle to stay afloat. While this lay-off season may be seen as temporary until the economy swings back into full motion, that is no consolation for the stress of unemployment brings. So, here are the 8 steps to take if you’ve lost your job in the pandemic:
This is a good time to take a hard look on your monthly expenses. Your lifestyle may be digging into your pocket more than you think. With a stop on your income, you need to look for ways to cut corners wherever you see the chance. You can always find cheaper alternatives to the services you think you need. Consider cooking at home rather than ordering in. Look for a cheaper data plan for your mobile phone. Cancel some of your streaming subscriptions. Put a hold on large expenses. Reducing your expenses will help preserve your delicate cash balance, and get you through this tough time.
Scheduling automatic transfers may be a convenient way to pay your bills. But it is just as important to keep a close eye on your balance. Ensure you don’t overdraft your account, and keep the cash for essential purchases only. This is a crucial time, where you must protect your credit score. Make sure you review the bank statements regularly, and report to the bank immediately if you see any inconsistency.
If you have an emergancy fund for bad days, this is precisely the time to use it. Use this reserve to keep your house running until you find another job. If you don’t have one, use whatever savings you have. It is always better to use whatever cash you have, rather than increasing your debt. It will make it that much more difficult to recover once your unemployment is over.
A critical financial obligation during the pandemic is insurance. You must consider payment of your insurance premium a priority. Insurance will help protect your family’s interests, if some unforeseen situation were to strike. A medical insurance will secure your savings in the worst-case scenario. If you had an employer-provided group health insurance when you were employed, contact them to check if you can continue with the same plan for the period of your unemployment.
If you have a home loan, you may consider opting for the loan moratorium for some relief. But do so cautiously. Since it is a deferral and not a waiver, the interest will continue to accrue on the outstanding amount. Though the interest waiver matter is still disputed, we must assume the worst case scenario. If you choose the moratorium you may be stuck with higher or longer EMIs. Hence, if you can, choose to pay your instalments regularly. Only opt for the moratorium of you have a plan in place to repay the EMI along with the additional interest.
Prioritize your bills: Rent, credit card bills, insurance premiums, utilities. All of these are essential expenses. But you should try to make some adjustments somewhere. If you are running short on your emergency fund, consider contacting your creditors and explaining your situation to them. Call up your landlord and ask for a reduction or waiver of your rent. If you are really struggling, just pay the minimum balance on your credit card. Yes, interest will accrue, but you have to focus on surviving on limited cash for the as long as possible.
Unemployment is unpleasant. But try to bounce back as soon as possible by uploading your updated resume on job portals, and getting in touch with your connections to help you find a job as soon as possible. In the meantime, try out freelancing projects, or monetizing your skills and hobbies by taking tutorial classes online. Any additional income will go a long way in help you cope with this unanticipated job loss, financially as well as mentally. You may also enhance your skills by taking free or cheap online courses or certifications. It will help in landing you a better jobs.
If you have a financial advisor, give them a call and let them know what is happening. If you don’t, you should consider having one. They are experts who can help you find a solution to your problems, that is specifically designed for you. They can give you helpful advice and recommendations, that you may not have thought of. Getting help may be the best way out of these stressful times.
While there are a million thoughts that go through your mind when you’ve unexpectedly lost your jobs, it is important to look after yourself, your family and your mental health. While these are difficult times, some planning will help you a great deal with it to cope with it, and come out of it with little damage.
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