Did you know that 27 lakh Indians lost their job due to the Covid-19 pandemic? The impact of such a distressing event can have disastrous affect on one's finances. With no warning and sudden job loss, one can find themselves at the crossroads with their finances.
How to take care of your loved ones? How to pay your bills? How to pay for food? These questions can haunt you if you are not financially prepared for unexpected situations like job loss or even a pay cut.
Such times require extraordinary measures to save money for the future, and you might need to rethink your budget and expenses to sail through these tides smoothly.
Let us look at some easy steps that you can use to manage your finances if you are worried about losing your job or getting a pay cut.
Build an Emergency Fund with Wizely
An emergency fund is a bank account with at least 3-6 months of income set aside ideally to cover large unexpected expenses. With Wizely, you can build an emergency fund and we can guide you to make smarter financial decisions.
Building an emergency fund creates a financial buffer that can keep you afloat in a time of need, without having to rely on credit cards or high-interest loans.
Modify Your Budget
The first step in any financial journey is always managing one's expenses. While it is advisable to make and manage a budget regularly anyways, it becomes an absolute necessity during times like these.
A budget calendar can help you understand your expenses and other due payments in the coming months. This can help save more money in multiple ways and would also reduce stress-induced uncertainty since you would have a clear picture of your upcoming financial engagements.
You could use a budget planner from the plenty of free options available online. Creating a budget has never been easier.
Redo Your Investments
In times of crisis, it becomes essential to focus on protecting your savings and better managing your assets. All investments we make have a particular risk attached to them, and while it is good to think of earning interest on savings, times like these make it necessary to rethink our strategies. When the economy and business dynamics change so rapidly due to any external factor, our investment changes' riskiness.
If you recently lost your job and did not have an emergency fund or decent savings, you might want to consider taking your money out of equity mutual funds or risky assets. You must also think about checking your life and health insurance schemes if you have any.
Many companies are even offering plans tailor-made for this crisis, and it would be a good idea to check them out and get what suits your budget. Remember, financial planning is more about managing risk than about managing returns.
Find a Part-Time Job
With the prevalent news about the current job market situation, finding a job might seem more difficult than usual. However, the pandemic has compelled companies to think more about saving money and getting more work remotely. This has opened up multiple part-time and work from home job options. It could be worthwhile to find a part-time or freelance job that you could do in your free time and save money at home.
Having more than one income source is an essential step in the journey of financial stability and independence. If you do not feel the need to find a part-time job, you could also focus on adding a different skill set in whatever domain you work.
This could help you be more efficient at your current job and could even land you a promotion.
Extraordinary times like a pandemic could mean taking extraordinary steps to protect your career and your finances. Make sure you don't lose the long-term vision and keep working towards it.
All the best!