This document summarizes an article that provides advice on financial planning for someone who has lost their job. It recommends the following steps: 1) Assess your current financial situation including insurance coverage and expenses; 2) Cut expenses where possible and pause investments; 3) Check available sources of funds like emergency savings, selling investments, and EPF withdrawal; 4) Create a 1-2 year financial plan with 6 months of expenses in bank FDs and the rest in liquid funds or bank FDs, withdrawing funds on a fixed schedule. The summary emphasizes planning funds to survive for 1-2 years until finding new employment.

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I Lost Job – How should I plan my financials for next 1-2
years?
June 8, 2020  Suresh KP
I Lost Job – How should I plan my
financials for next 1-2 years?
Corona virus is showing worse across the
world. There are thousands of employees
who are losing their job now every day.
While Government of India says no
company should do layoffs, companies
are not in a position to pay salaries and
they don’t have any choice except to cut
salaries and do layoffs. There are hundred’s of start-up companies that are getting shut
down due to covid-19 pandemic. One of our blog reader wrote email to me saying “I
Lost job, how to plan now during corona virus where I can’t get job for 6 months to 9
months. I have some money, but how to do financial planning in proper way”. You
might be the victim and lost job or might be thinking that what happens if you lose job now in
this crisis. In this article, we would provide some tips on how you can plan your financials in
case there is a job loss or an indication that you might lose your job in the near future.
Also Read: Which are best part time business ideas to start in 2020?
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I Lost Job – How should I plan my financials for next 1-2 years?
You lost job and not nope. Heaven would not fall. First, stay calm and then do small
planning. While there is no hard and fast rule, you can follow these steps.
Step-1 – Assess your current situation
Step-2 – Cut down expense + Pause your investments if you can
Step-3 – Check for source of Funds to survive
Step-4 – Create a small financial plan for 1-2 years
I Lost Job – How should I plan my financials for next 1-2 years?
Now let us go into detail.
Step-1 – Assess your current situation
1) Do I have an adequate term insurance plan: This is the first step in financial planning,
if you have missed to take earlier, you are in a little trouble. Check if you can get a good
term insurance plan faster. Approach insurance company policy and look for a lower
premium term insurance plan considering your situation.
2) Do I have an adequate health insurance plan: If you have only company paid health
insurance, you are in a little trouble. Try to get a health insurance plan as early as possible if
you can. Take a family floater health insurance plan to cover your dependents too.
3) What are my expenses: Assess your current monthly expenses which includes
expenses for groceries, EMI’s, credit card bills, child school fees or college fees, etc.,
Assume you may be out of job for next 1-2 years, you might need 2 years expenses to bear
till you might find a new job as getting a job could delay due to curved-19.

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Once you finish step-1, you are clear about your current situation in terms of insurance and
your current expenses. Let’s go to the next step now.
Step-2 – Cut down expense + Pause your investments
1) Can I cut down expenses: Check what you can get rid of from your expenses and arrive
at what you can really need to spend for next 1-2 years. Assume that you might need Rs
30,000 per month and for 2 years, you might need Rs 7.20 Lakhs. Is there any way you can
cut down these expenses, reduce by 25%. Think, think..
2) What am I paying: Check what is your outflow for investments. It could be insurance-
cum-investment plans or mutual fund SIPs or Systematic Equity Plan in Stocks. Ask
yourself, do you need insurance-cum-investments. Is there any way you can surrender them
now (ensure you have adequate life insurance policy for risk coverage before you do that).
Can you pause your mutual fund SIPs? Can you stop your stock market investments
temporary? Don’t think that you would miss the opportunity of buying at lower levels of stock
markets. Raelise that you are not at the investment stage now. You need to survive in the
current crisis with minimal negative effect.
3) Can I reduce loan EMIs: Check if you can move your loans to lower interest rate. E.g.
moving home loans to banks like SBI can reduce your EMI and interest significantly.
4) What’s your outlook now: Since you checked and optimized your expenses, you are
now aware how much money you need towards expenses every month for the next 1-2
years.
Once you finish step-2, you are clear about your current situation, how much you are
spending and how much money you need for next 1-2 years for essentials after cutting
down unnecessary expenses. Let’s go to the next step now.
Step-3 – Check for source of Funds to survive

4. 1) Can you survive now with no further action: Do you have adequate money to survive
for the next couple of years without selling stocks or mutual funds or real estate. If yes, you
have done good financial planning, if not, continue the next steps to still hunt how you can
get additional funds.
2) Can you use emergency money: How effective is your emergency fund now? Can you
still hold emergency fund unless you are in real financial crisis now. If yes, for how long you
can hold it. There are several alternatives to Emergency fund too. Ask these questions
and you would get several positive tips on how you can survive with current money which
you are holding.
3) Can you Sell liquid funds / debt funds: Can you sell any liquid mutual funds or debt
funds which you are holding without losing any money?
4) EPF withdrawal: How about withdrawing EPF due to covid-19 pandemic. You can get
3 months (basic salary+DA) of salary as per the new guidelines.
5) Any other source of funds: What are various sources where you can get money now
other than personal loans from the bank. Can you get back any money which you would
have given to your friends or relatives as hand loans?
Once you finish step-3, you are clear about the current situation, how much money you
need, how much money you have and how much you are planning to get from various
sources. Let’s go to the next step now.
Step-4 – Create a small financial plan for 1-2 years
In this stage, you have a plan where you would be able to get money to survive for 2 years.
First get these funds and execute below steps.
1) Keep 6 months of funds required for your expenses in a bank FD. You can create 6 FD’s
starting with 1 month to 6 months. Every month one FD would get credited to your SB
account like salary. Keep another 18 months of money in a liquid mutual fund. After 6

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months, you can withdraw from liquid funds through SWP a fixed amount. Again, this would
work like salary. This is for those who feel secure about investing money in liquid mutual
funds.
2) If you feel insecure about putting money in liquid funds, just keep money in bank FD’s of
two banks. While you keep money for first 3 months, balance create FD’s that gets mature
every 3 months, i.e. 1 for 3 months, 2 for 6 months, 3 for 9 months etc., Use these
funds for your planned expenses every month.
Losing a job is not failing in life. It is part of a journey in the life!!!
If you enjoyed this article, share it with your friends and colleagues through Facebook and
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Suresh KP
I Lost Job – How should I plan my financials for next 1-2 years
 4 comments
4 comments
Sarabdeep
June 10, 2020 at 11:15 am
Pl post some government fd which can apply online
Reply
nd rd

6. Suresh KP
June 11, 2020 at 11:29 pm
Sure. We would post this this next week
Reply
dheeraz
June 10, 2020 at 1:48 am
suresh sir, this is not about the above topic..
i have around 5k money in karvy demat account.. and also some shares worth 80k in
karvy account..
what should i do now??
they are not responding properly.. plzz guide
Reply
Suresh KP
June 11, 2020 at 11:32 pm
Hello Dheerah, If you want to complaint against a stock broker, you can use this
link of NSE. https://investorhelpline.nseindia.com/NICEPLUS/
You can also raise complaint on SEBI website at this link.
https://scores.gov.in/scores/userRegistration.html
Reply

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