The covid 19 pandemic has created havoc in the job market. The number of people losing jobs each month is the highest in a long time. Managing your finances and saving money is difficult, and it gets even more complicated when you lose your job. Many things would be bothering you in that situation; however, keeping the right mindset and taking it as a challenge head-on is the right way to go about it. Problems like these are a part of the journey. So let us look at seven tips that you can use to save money if you lose your job.
1. Understand Expenses - The first thing that you should do is understand all your expenses. Look at your bank statements for the last six months and figure out where you can save money. You should now make a list of all the necessary expenses that you must make. It would help if you tried to keep this list as short as possible and focus on sticking to it religiously.
2. Stop Investments - The second save money tip is to check if you have any systematic investment plan or another investment instrument that you are enrolled in. You might want to consider putting it on hold. This is a time to think about saving and focusing on managing your emergency fund. You can continue with all your investment policies once you have a stable source of income again. You might also want to consider moving some of your assets from riskier investments to less risky investments if your weightage of market-linked investments is too high.
3. Health Insurance- You should check if you have health insurance, and if you do not have one, you should consider getting one. During a job loss, you are anyways exhausting your emergency fund. Any unforeseen situation might cause a severe blow to your emergency fund if you have to pay for a substantial medical bill with it. Health Insurance is a necessary life jacket that you must have anyways. This is not necessarily a save money tip but can prove to be the most useful saving tip under challenging times.
4. Look for passive sources of Income - Instead of draining your emergency fund completely, you should consider looking for passive sources of income, possibly through some freelance work. This might not be good enough to replace your earlier income; however, for the time being, it might reduce the burden on your emergency fund by a lot. This money-saving tip could also prove to be an excellent way to network in the community you work in and increase your chances of finding a new job.
5. Get off rent if possible - If you live in a city far away from home and are still single, you might want to consider moving in back with your parents for a while. It might sound demotivating, but it is the best money-saving tip that has the potential to reduce your expenses significantly. You must understand that a job loss is not your fault and that you should not give yourself a hard time for it. Talk to your near and dear ones and make financially wise decisions to tread this path best.
6. Don’t use a credit card - One of the biggest mistakes people make after a job loss is assuming they will get another job soon. While it is good to have that confidence, you should always prepare for the worse. Do not use your credit card for expenses that can be avoided and made later with the plan that you will soon get a job and quickly pay for the bills with that salary. It is like robbing your future self of the money that you do not even currently need. If you cannot pay the bills in time, you will also have to pay hefty interest rates of around 3-4%, which will keep pushing you more profoundly into a debt trap.
7. Sell Stuff - This is again not a save money to tip but a method you can use to reduce the strain on your emergency fund while at the same time decluttering your house of things you do not use anymore. We all have many things that we purchased when we needed them but have no use for them anymore. It is a sound financial decision to sell them to someone who needs it and a tremendous environment-friendly decision.
These are some of the many save money tips and tricks you can use to ease your journey from a job loss to finding a new one. You must remember that the trip will be much easier if you take it with the right mindset. Managing your money and saving for the future is much more of an emotional and psychological task than a financial job. Understand your expenses, your spending habits, your needs, and make financial decisions accordingly.