As a salaried person settled in your job, you may find yourself planning for your next holiday, your dream car or even your dream home. While planning for these you have most likely assumed a steady and constant stream of income, but what if this fundamental assumption does not hold true? Is your job really secure or in fact is there anything as a completely secure job?
Well, if we were to go by the recent trends in the job market then our answer would probably be no. You may have noticed instances of established companies going bankrupt and winding up or downsizing becoming more frequent over the last few years.
In fact, as per a recent report by Centre for Monitoring Indian Economy, urban India witnessed a loss of 1.8 million jobs in the year 2018.
So, what happens to the employees of these companies? Not only do they lose their job but also probably lose several months of pay even while if they continued to be employed by these companies.
Have you envisioned such a situation and you are ready for it? While you can probably not be completely prepared for such an eventuality, there are certain steps you can take to secure yourself and your future:
Build an emergency corpus fund
Ideally you should maintain a corpus fund equivalent to 6 months of your expenses to tide you through such difficult times.
The key feature of an emergency fund is that it needs to be safe as well as be able to be easily liquidated. There is no doubt that your emergency fund needs to be safe but that does not mean that it needs to be a dead investment. You may opt for investing your emergency fund in liquid mutual funds or in separate deposit account.
Keep committed payments to the minimum
Try to steer clear from the trending EMI lifestyle. While it may seem attractive to afford things faster with EMIs, being heavily dependent on loans for your lifestyle can land you in a lot of trouble in difficult times. Rather than buying things on EMI, adopt a principal of saving and investing to fund your luxury purchases.
Always have a plan B
Never get too comfortable in a particular job. Keep yourself updated with your profession and know your position in the market. You should always know where you stand and what alternative options you have in case you are faced with losing your job.
What to do in a worst-case situation
The key in such situations is not to panic. Losing a job can be extremely emotionally taxing – but do not panic and take hasty decisions.
Avoid going out on a limb and liquidating your investments. Budget your coming expenses by eliminating the unnecessary and luxury expenses.
If your emergency corpus is inadequate and you need to dip into your investments, then study till date performance of your investments before liquidating.
You can opt to liquidate the investments that aren’t performing as well as others. As far as possible, avoid liquidating investments which had been intended for long term appreciation or one with exit loads or penalties for premature liquidation.
On a positive note, such a situation may actually drive you to pursue a career that you are truly passionate about something a safe and secure job probably never allowed you to do – this may be the silver lining to your cloud.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.