We’re living in tough times. The coronavirus (Covid-19) pandemic has curtailed business operations globally, across sectors. With restrictions and lockdowns imposed in over 80 districts in the country, businesses are bound to take a hit.
The bad news is that no one knows how long the pandemic will last. As we begin to spend more days working from home, with governments around the world even locking down cities, the questions on people’s minds, globally, are: How long will our employers continue to pay our salaries? Will our companies even survive?
On 18 March 2020, the United Nations estimated that over 2.4 million people around the world could lose their jobs due to the coronavirus pandemic.
Those working in the travel and tourism industry, including in hotels and airlines, are in particular danger of losing their jobs. With cinemas and malls being shut down, the job scene looks perilous. Some airlines have even announced a five to 25 percent cut in staff numbers.
WHAT CAN INDIVIDUALS DO DURING THIS CRUCIAL TIME?
1- Cover your essential expenses
The most important thing that you need to know if you get laid off is how much it costs you to survive each month.
Essential expenses include:
- Your rent or mortgage;
- Utilities like water, gas, electricity, and internet;
- Groceries and medicine;
- Gas, insurance, and transportation expenses.
2- Reduce or eliminate expenses
One of the best ways to prepare for a slowed-down economy is to cut down on your monthly expenses. Assess where you can spend less. Think of cutting down on costs like cable, gym memberships, shopping for clothes, eating out, and money spent on entertainment activities.
3- Contact Your Creditors
If you are repaying equated monthly instalments (EMIs), don’t stop due to a job loss. Try to meet your loan commitments from existing investments or by selling physical assets (gold, second home, or property).
Any unsecured debt (credit card dues, personal loans, etc.) should be repaid first because their interest costs are very high. Also, make sure not to touch your provident fund or any other investments earmarked for your retirement.
Make the minimum payments on your car, credit cards, and personal loans. Now is not the time to pay extra on your debt because you need to preserve your money. If you feel like you won’t have enough money to stay current on your monthly debt payments, contact your creditors right away.
4- Create an emergency corpus for future crises
Everyone’s financial portfolio must have an emergency corpus to tide over a temporary financial crisis. Your emergency corpus should include the EMIs you pay, monthly systematic investment plans for your future goals, education fees for your children, and other monthly commitments that you simply can’t get out of.
For a single-income family, financial planners advise building an emergency corpus equivalent to twelve months’ expenses, including EMIs. In the case of a double-income family, those savings should cover at least six months’ worth of expenses.
It’s important to have a health cover, even if your job provides you with insurance. This is because, in the event of a job loss, your employer’s cover will likely be terminated immediately.
With all this being said, human civilisation has overcome many such calamities in the past and had emerged victoriously; this time will hopefully be no different.