Here, we will discuss the various steps that you need to take if you were to lose your job during the Corona Virus pandemic
Edited highlights:
1:31 A job loss during the COVID-19 pandemic need not set you back in your journey to your financial goals
2:21 Broadly, there are three things that you need to do
2:37 Make efforts to ensure some regular income keeps coming in
2:48 Second, don't default on our commitments like insurance premiums and loans
3:18 If we have a bad track record, once the pandemic gets over, it will impact us
3:33 Number three, cut expenses and outflows like loans
4:08 First, negotiate with your employer and explore the possibility of a part time engagement
4:31 Even a small percentage of your pay, say 20-25%, for some other capacity, for part time or twice-a-week arrangement, helps
4:52 Your company may surprisingly be open to a part-time engagement
5:06 Remember, you have an advantage as the company knows you
5:20 Similarly, there might be opportunities in other organisations
5:32 This income could meet important regular expenses like utility bills, mobile service bills, childrens' school fees
6:08 You can have a gig arrangement by enrolling with online sites and platforms for part-time or project basis work
6:33 You can make these efforts as you look for a job
7:08 Make arrangements to meet your regular expenses
7:40 If you had an emergency fund in easy-to-access investments like savings account, FD or liquid fund, increase the emergency fund by using a portion of the severance pay
7:48 Prepare to meet expenses for the period you expect to be unemployed
8:13 Emergency fund can pay for bills, school fees, insurance premiums and other regular expenses
8: 37 Keep aside from the severance pay, the amount of tax due
8:58 Among obligations, number one on the list is insurance premiums
9:07 Remember, during Corona pandemic, it will financially damaging to have an insurable emergency that isn't insured
9:14 Pay your car insurance and life insurance premiums besides premiums for other insurance covers
9:26 Plug any gaps in insurance coverage
9:39 You can check the health insurance during Corona Crisis video. Link:
https://youtu.be/MCU1JUTYOXk
10:10 The other important obligation is to continue repaying outstanding loans
10:29 It could be a home loan or car loan. Pay the EMIs on time. A default will spoil your credit score and you might lose control of the asset
10: 42 In the long term, your credit score and credit history will get spoilt and access to loans difficult
11:16 In case of home loans, check with your home loan providers, if you can increase the tenure of the loan
11:45 Explore whether you can increase the home loan tenure so that the EMI can be reduced
11:52 The loan tenure can't be stretched beyond the original tenure
12:26 What can't happen is you not paying home loan EMI at all. Even in the recent home loan moratorium offer , the burden is being shifted for later
12:54 If you think you will not be able to pay home loan EMIs, take the home loan provider into confidence
13:05 Explore if some way out could be figured. Home loan providers can be considerate in these times
13: 12 They know regular customers are under pressure
13:20 Don't wait for the situation to come to a head
13:40 Similarly, you can keep paying car loan EMIs
13:52 From your severance pay, part pay or fully pay your credit card outstanding
14:03 This is your most expensive loan
14:20 If you can't clear off credit card outstanding, try and get it converted into an EMI
14:25 This is provided the interest rate is lower than credit card interest rate
14:34 You can repay the loan within a certain period of 18 months, 2 years etc
14: 47 This will reduce your overall outflow
14:55 Try and get the outstanding converted into a lower interest personal loan
15:01 You can consider a balance transfer
15:35 Continuing your regular investments
15:46 During market downturns, you will make losses on premature exits
15:57 Delay using the severance pay, tap only a part of it and don't exhaust it
16:15 While tapping your savings, use the investments with lowest returns
16:32 Consider investments underperforming consistently compared to benchmarks or peers for the past 18 month to 2 years
16:57 Don't use your provident fund and gratuity money
17:08 It will take years to recover. Same is true with life insurance cum investment policies and Public Provident Fund
17: 24 Consider cutting and deferring expenses
17: 30 Go for smaller purchases and opt for discounts
