Millions of people have lost their jobs over the past few months. It’a happening all over the world and across all industries. Even the cool tech companies — Uber, AirBnB, TripAdvisor — all of them have made or announced major layoffs and retrenchments in the recent past.
It’s pretty clear that recession is already here. And it would be foolish to think that you or I would be protected somehow, that somehow we are immune to it. Unfortunately we’re not. Layoffs are around the corner, even at your workplace. The real question is — are you prepared for it?
As you can imagine, it’s hard to make good decisions in a state of panic. So being prepared is the best way we can take care of ourselves and those who depend on us. Here are five ways in which you can secure yourself financially and make your way through the worst of it.
Arrange for emergency cash
Ensure ready access to enough cash to pay for bills and basic needs for 3–6 months. In fact, at least a month’s worth should be with you at home in some safe location, so you have it ready at hand in case you can’t withdraw cash easily for any reason.
Here is a simple Google sheet calculator to help you decide how much that should be. To protect your privacy, the template itself is not editable. You need to make a copy of the sheet before you can edit it.
Get your own health cover
Healthcare costs are pretty high in many countries and the truth is we are all extremely reliant on our employer’s insurance. So you need to ensure you are covered in case you lose your job and also need to handle a medical emergency, especially given that we are currently in the midst of a pandemic with no end in sight.
If you are generally young and healthy, you’ll likely get a pretty low premium as well, much lower than if you took it closer to your retirement when you have all kinds of chronic ailments. So there is no reason not to do this right away.
Consider home insurance as well
In normal times, home insurance would help protect you against catastrophes like earthquakes and floods. But recession also breeds desperation, so home insurance will also ensure you are covered in case of theft and burglary, sometimes even if an insured object is stolen outside your home.
You also might get the surprising benefit of a payout in case you lose documents such as degree certificates, passports, your ID etc.
Consider having a backup credit card, for emergencies only
If you already have a number of cards, or just can’t control your spending, forget I mentioned this. The last thing you need is another source of unplanned spending! But if you have self-control and can keep one away for emergencies, it might not be a bad idea.
Start proactively hunting for a job
Get the basics in place. Update your resume and LinkedIn. Network and look up your friends and connections. Search for interesting jobs at companies you always wanted to join, and just start applying and interviewing. You can always decide to decline the offer, but having one will give you peace of mind and maybe even the impetus to get yourself that dream job!
Consider a side-hustle as a way to make a bit of extra cash
It is clear that jobs are going to be hard to come by, because companies are retrenching people and many of those jobs may never return. However, they still need to get a lot of their work done. In fact, I am willing to bet that most companies are in fact trying to get more done with fewer people.
Therefore, I expect most of them will start turning to contractors and freelancers and you could benefit by offering your skills and working short projects via sites like Upwork.
If you are good with your hands, you could sell goods on Etsy or Amazon. Finally, there is always the option to drive or deliver food on apps like Uber, Lyft, Ola, Grab etc.
If you do nothing else…
… at least use the emergency fund calculator to make a list of your critical expenses so you have a starting point towards building an emergency fund.
Resources
The Money Tok Emergency Fund Calculator
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