The sweltering heat of May is getting discomfiting by the day; but more so for the IT workforce in India.

IT firms such as Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognisant, DXC Technology, and France-based Capgemini are laying-off thousands of engineers this year, and the number is twice the workforce retrenched last year. Many are serving their notice period already.

Why is this happening?

IT companies have begun to work on new technologies, such as cloud computing, and embracing automation requiring fewer IT workforce. So, employees who’re smart thinkers and well-versed with the new technology are retained, and others are asked to leave.

Besides, US President Donald Trump’s protectionist policies are also weighing on the Indian IT firms. In addition, the companies are focusing on profitability by saving cost.

So, how does one sustain financially during a layoff…

Well, needless to say layoffs have a damaging impact on your financial wellbeing. Hence, during such times it’s primarily important to be in full control of your personal finances.

Here are 9 things you can do:
 

1. Draw a cash-flow plan:
   
   Subscribe to the good habit of budgeting, and draw a cash-flow plan by estimating income, expenses and monthly liabilities. To ensure that it’s a collective effort, involve your family so that potentially, puts you in much better control of your finances and please continue to follow this practice even after you acquire a new job. Remember, some of the best life lessons are taught amid adversities.
    
2. Keep control on your expenses:
   
   It is critical to reduce your expenses. You can’t afford to be extravagant, because that can damage your financial health. Explain the situation to your family without losing your cool and encourage them to save money as well.
   
   Rationalising expenses can provide you some relief during distressed times. Besides, avail of discounts, e-coupons, better bargains; but do so only on things that are a necessity such as groceries, medication, etc. Hold off on the temptation to venture out shopping, dining, entertainment/ movies, and so on. To commute, consider using public transport instead of driving a car, even if you own one. While handling utility bills, keep in mind the objective to save — be it electricity, phone bills, etc. —even though some bills may seem inevitable to an extent.
    
3. Utilize your contingency fund sensibly:
   
   If you’ve been wise enough to keep some money aside as an emergency or a contingency fund (in a saving bank account and/or liquid fund), utilise it; but do so extremely thoughtfully.
   
   If you’ve been reckless and never maintained a contingency fund, but own gold, make use — it is a lender of last resort, a saviour during times of uncertainties.
    
4. Judiciously count on your existing assets:
   
   Likewise, your other existing assets can come to your rescue in times of distress. So, make a list of them and analyse which of them could be sold for meeting your regular expenses, at least until you find a new job.
   
   For example, a car, which is a depreciating asset, can be put up for resale to meet regular expenses. Similarly, the unwanted items we accumulate over the years, stacked in storage, can be discarded even if it fetches you a lower price. Also, if you own antiques that you wish to part with, consult an expert. Such an approach will enable you to accumulate funds and manage during dire times.
    
5. Find a source of income:
   
   Until you find a full-time job of your choice, calibre - consider finding a part-time job where your skills can be put to use. Today, even freelancing, is an effective medium of self-employment if pursued correctly and seriously.
   
   In times where even these two options may seem difficult to come by, consider how your hobbies can be monetised; while your primary job would be to find a job. Adding a source of income will help you sail well during a crisis, and thus networking wisely during such times is the key. Reach out to your friends/ ex-colleagues/previous employers and explore the options they may have for you.
    
6. Keep your retirement savings untouched:
   
   Invading or touching your retirement savings can cost you dearly. So best is not to encash your PF and dig into the other provisions meant to address your goal of living a comfortable retirement. Instead what you could do is, push your retirement back by a few years to cover up this loss during the earning phase of your economic life cycle.
    
7. Don’t allow your insurance policies to lapse:
   
   Stopping insurance premiums payments– be it life, health – is not your best long-term interest. But if you hold insurance-cum-investment plans, which usually earn a dismal rate of return and offer a low cost-to-benefit, you may consider giving up, i.e. surrendering these.
   
   Term insurance is by far the best to indemnify risk to life. Ensure that you’re optimally covered and continue to pay the premiums. Likewise, with rising medical & healthcare cost, not paying the premium can prove to be a blunder. The heavy bills can drain out your finances at one go and prove perilous for your financial health.
    
8. Renegotiate term with creditors:
   
   If you owe money to an institution, bank, or person, think about how you can renegotiate the terms of repayment. While this may seem freakish, this could perhaps be the best time to renegotiate the ‘terms of credit’ if you explain the situation in all sincerity. For all you know, they may be ready to extend your repayment tenure, or lower the interest rate, thereby helping reduce your debt burden.
   
   Draw detailed chart (including interest rate, tenure, default penalty, and so on) if you have too many debts. You will benefit from prioritising debt repayments and the best strategy is to repay loans that carry a higher interest rate first.
    
9. Reach out to an expert:
   
   During rough times, our ability to think prudently is often disjointed. Besides, we may not be adroit enough owing our background, a different field. It would therefore be worthy to reach out to a Certified Financial Guardian – a mark of trust and respect, who can counsel and handhold you to streamline your personal finances prudently.
    

PersonalFN is of the view that crisis can storm anyone’s life. Hence, it becomes vital to plan for the worst while hoping for the best. Holistic financial planning succours you to do that: build a contingency fund and accomplish your long-term financial goals. Besides, a carefully drawn financial plan helps in instilling the necessary financial discipline in the interest of your long-term financial wellbeing.

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