4 ways to be financially prepared for any layoffs in the future

The year 2021 has turned out to be an eye-opening year for many, especially those who have not given importance to achieving financial security earlier and were laid off from their jobs.

Indeed, the situation was challenging and many got into debt. But, now as the economic activities have started gaining momentum, many have found their livelihood back. However, the uncertainties remain due to the massive disruption. 

Therefore, to minimize the impact of any layoffs in the future, you need to financially secure yourself.

Four ways through which you can achieve financial security. 

Secure your loved ones:

Change and uncertainty are the two biggest truths of life. Both are constant. Therefore, don’t let your family or loved ones suffer due to any unforeseen event, which you don’t have control of. 

Get yourself insured with a term plan such as HDFC Life Click 2 Protect Life so that the

well-being of your family is secured. You could also explore a YoungStar Udaan to ensure that you are able to be financially prepared to help your child achieve important milestones.

Build up an emergency fund:

The first step towards achieving financial stability and security is to build an emergency fund. 

Your emergency fund should be able to take care of your expenses for at least six months, in the event of loss of job. To build an emergency fund of this scale may sound a bit challenging but is very important for your financial stability. 

To begin, you can break down your saving goals into several smaller goals, which will make them look doable and propel you towards the larger goal. 

Become debt-free: 

If you have a running loan account or accounts, which requires you to allocate a significant portion of your income towards EMIs, then you should prioritise full debt repayment. It will enhance your financial well-being and make life a lot easier. 

If you have multiple loan accounts, prioritise paying the loan with a higher interest rate first to reduce interest expenses. Once paid off, you can prioritise paying up other loans accordingly. 

Also, refrain from taking on new debt and limit the use of credit cards during the period.

Reduce your expenses: 

Having full control over your expenses is very important. It helps to realise your other financial goals like building an emergency fund or becoming debt-free easily. 

Reducing your expenses helps you to save extra, which can truly make a difference to your living. Steps like creating a budget and sticking to it, refinancing your loans at more favourable terms, saying no to things that don’t make sense while spending, etc can help you a lot. 

Conclusion

To get prepared to fight off any financial uncertainties in life, you need to put concentrated efforts to build your finances from the very beginning. And, it can only be achieved through financial discipline. It will help you to smoothly sail out from difficult situations and bounce back quickly to life. 

ARN: ED/01/22/27176