Tech companies from Twitter to Facebook parent Meta sacked thousands of employees across the globe, while e-commerce firm Amazon also eyes to lay off around 10,000 people over the next few days, reported the New York Times. The last two weeks have proved to be difficult for employees in tech companies globally. India is also no exception as ed-tech company Byju also trimmed 2,500 employees in October. Even though employees cannot avoid a situation like this but one can be financially prepared to face such struggles.
Know how to prepare financially to deal with job loss
Emergency account
It is always advised that you should create an emergency fund keeping in mind six months or one year's expense. At a time of a job loss, you can fall back on this fund to survive the months till you get another suitable job.
Such an amount should be invested in liquid funds or saving accounts so that it can be easily taken out at the time of emergency situation such as job loss.
Health insurance
It is always better to buy an independent health insurance policy along with the company's health insurance. One should never depend completely on the company's health insurance because in case of job cuts you will tend to cease the benefit of the health scheme. In order to avoid any health emergency when you are out of work, you will dig into your savings which will only increase your financial stress. Hence, it is always better that you opt for personal health insurance for yourself and your family.
Budgeting
Make sure that you closely watch out for your expenses and revise the monthly budget as financial resources would be strained after the job loss. Some of the expenses are unavoidable such as food, utility bills, EMIs etc. Track those and then accordingly decide on your monthly expenses.
Curb expenses
Also, at a time when your finances will remain under pressure, it is suggested that you cut down optional expenses such as eating out, watching a movie or magazine subscriptions, etc. Doing away with such expenses during the current emergency can help you put the savings to right use. In fact, you can also halt your savings and investments for the time you are out of a job.
Don’t take any new debt
One of the most important things to consider during financial stress is to avoid taking on debt such as a personal loan or a loan against your credit card. It is because such loans might be attractive or prove to be relatively easier to get out of money issues in the short term, but high-interest rates will only end up increasing your financial load.