By Shiv Nanda
According to recent data, 18.9 million people in India lost their jobs between April and July during the lockdown and experts believe it could be a lot more in the unorganised sector. If you’re one of the unlucky ones, you need to look into managing finances since it could take time for the situation to improve. Here are 7 ways to manage your finance if you are unemployed:
1. Avail Unemployment Benefits – If you’re a part of the Employees’ State Insurance Corporation, you can avail unemployment benefits. Even if you’re not, you can look into your insurance policies if you have unemployment benefits as an add-on for an existing policy. Though there are no unemployment benefit insurance policies in India, there are add-ons for existing policies.
2. Cut down Your Expenses – Leave out all the non-essentials from your budget. If you look hard, you’ll find many things in your monthly budget you can do without. Stop eating out, shopping, going for a movie, etc. immediately and managing finances will be a lot easier.
3. Get a Personal Loan and Start a Small Business – If you have a good credit score, you can get an instant personal loan even if you’re unemployed. If you have a unique business idea, unemployment might be a blessing in disguise.
4. Take Advantage of Your Unemployment – There are government schemes that you can take advantage of in case you’ve lost your job. From financial aid to tax breaks, you can avail these benefits that’ll help you in your time of need. There may be some paperwork involved, but don’t let that dissuade you.
5. Save Money Whatever the Situation –Until you have a steady income again, you can still get your savings to work for you. Start a recurring deposit that’ll take a small amount from your account every month. If you have income coming in from other sources like shares, mutual funds, and investments, reinvest it instead of splurging.
6. Don’t Use Your Credit Card – No matter how desperate the situation is, try not to use your credit card. Credit cards will create a huge debt and have a high rate of interest on spends. Plus, missing a payment will lead to hefty penalties which will just make things worse. In a worst-case scenario, there are instant personal loans that have a much lower interest rate and flexible repayment options.
7. Don’t be Afraid to Ask for Help–Friends and family are with you through thick or thin and now is the time you might need them most. If nothing else is working out, swallow your pride (there’s no place for it in these relationships anyway) and borrow only as much as you need. Be sure to consider it a loan that absolutely has to be repaid once your finances are stable.
There are many things you can do to tide over the financial challenges of unemployment. The situation is already improving and businesses are hiring again, so as long as you keep looking, you will find a job soon. The key is to stay positive and manage finances wisely, so you can recover quickly.
About Author: Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at [email protected].
