Worried about money management post-layoff? Experts have some useful tips
3 min read . Updated: 21 Feb 2023, 11:13 AM IST
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When the covid-19 pandemic struck in 2020, the world almost went into a shutdown. Big companies and startups started layoffs and froze hiring. Over the past two years, more than 1,08,246 people lost their jobs in India in the tech sector including some big companies like Google, Amazon, Microsoft, and Twitter, according to Layoffs.fyi, a tracking website.
Union Minister Bhupender Yadav said any retrenchment and layoffs are deemed to be illegal if not carried out as per the provisions of the Industrial Disputes Act which says that establishments employing 100 persons or more are required to seek prior permission from the appropriate government before effecting closure, retrenchment or lay-off.
It can be devastating for those who have lost their jobs, but one should not panic. You just need to manage your finances by cutting down expenses and preparing monthly balance sheets till you get a new job.
1) Alternate ways of generating income: One should find out ways of generating income, apart from a job. Trina Das, Founder, GigChain suggested, “If you’re able, look for ways to increase your income. This could include taking on freelance work or finding a part-time job."
2) Cut down your expenses: A person who has lost his job needs to cut down his expenses for better financial management. “Do not dig into your retirement corpus or long-term investment goals. Look at how much you spend each month and see where you can save. Review your investment portfolio to ensure that it aligns with your current financial goals and risk tolerance," Das said.
3) Prioritize debt repayment: You can try replaying your most important debts so that more income can be freed up for expenses. GigChain Founder stated, “If you have any outstanding debt, prioritize paying it off as soon as possible. This will help you get out of debt faster and free up more money for other expenses."
“It’s important to know what you own and what you owe. By keeping track of your finances, you can make sure you don’t miss any bills or payments," said Ravinder Goyal, Co-founder & Managing Director of Erekrut HR Automation Solutions.
4) Government Unemployment benefits: Apart from other financial management ways, one can also go for unemployment insurance which supplements your emergency savings while looking for a new job.
“Unemployment insurance may take several weeks for your state to approve your application, so apply as soon as you know your role is going to be terminated. The eligibility requirements and application approval timelines vary by state. Still, most states require you to have worked for a certain amount of time or earned a certain amount of money to qualify. Your state may also use this information to determine how much assistance you are eligible for," Das added.
5) Protect yourself from fraud and scammers: It is a must in today’s digital financial world to protect yourself from job and investment fraud, especially after layoffs. “There are fake investment opportunities, fake sweepstakes, and fake lottery tickets. You can avoid these scams and protect your money by protecting yourself from fraud," said Ravinder Goyal.
6) Ask for help: Goyal also recommended that a person should never refrain from asking for help in time of financial problems. “Don’t be afraid to ask for help. There are a lot of organizations out there that can help you with financial problems. One great way to get help is by looking online. There are websites dedicated to helping people with financial woes. Another great way to get help is by talking to your family."
7) Diversify your investment portfolio: One should look for diversified ways of investment, for example, the stock market. “The stock market has been through a lot since the start of the year. However, investing in a diverse portfolio can help you hedge against this volatility. Investing in many different areas can help reduce the risk of one particular area of the market going down," Goyal added.