The thought of losing a job is very scary, isn’t it? With the evolving technologies around and automation happening in every industry, it is natural to be worried. Any of us can lose our job at any time and the worst part is we can’t do anything about it.
What you usually do to get out of this fear is start talking to your peers, and your friends, spending more time with your loved ones or you may watch a motivational movie, etc which can motivate you. Each of them will motivate you but you would end up getting the perfect answer what if I lose my job?
So here are some best ways to prepare for and tackle the job-loss situation:
Create your emergency fund:
Build your emergency fund out of your income. Transfer around 30% of your saving income into Liquid funds or ultra-short-term funds where risk is minimal, and your money will start growing on a daily basis. An ideal emergency fund should be equal to six months’ future expenses or if you are having any EMI’s going on, it should at least equal future six months’ EMI.
Another option would be to reduce the EMI amount & increase the tenure of the loan temporarily till the time things get normal. This is not at all beneficial for you in the long term so better have an emergency fund in place.
Fun Fact: There are certain mutual funds like Reliance Liquid Fund which provide instant redemption facility whereby you can get your money in just 5-10 min in your bank account 24*7. These funds can give you returns ranging from 6.5% – 8%.
Understand the employee benefits:
You should be aware of all the details of your salary, your unused leaves and their compensation, insurance etc. It will help you in estimating the future income.
Utilize your open-ended/Withdrawable Investments:
You should always have an investment which can be easily liquidated. In such critical times, your real estate, Public Provident Fund (PPF), National Savings Certificate (NSC) etc investments will not help as you can’t liquidate them but your investment in mutual funds safeguard you in such cases.
Use loan protection plans if you have any:
To safeguard investors from any uncertain events, banks do provide loan protection before taking any loan. This plan covers other critical events like illness or job loss. If you have this policy, redeem the plan’s benefit at times of job loss.
Make sure about your personal Mediclaim Policy:
You should always make sure that you are having your own Mediclaim policy other than the one which gets provided by the employer. Medical emergencies can arise at any time and will impact you majorly in your crucial times.
Look ahead for the opportunities:
While it is obvious to get frustrated by job loss but at the same time, you should also think about the skill set, the knowledge set required to qualify for the best opportunities in the market. Because, the above measures will help you in tackling the temporary emergencies, knowledge and skill set will give you permanent solutions.
Losing a job is a stressful activity, however proper planning & a balanced approach can help you in coming out of such cases.