Financial certainty remains ever elusive for many of us. There is always a risk of being laid off or hazarding money on a propitious deal, which turns out to be worse later. Financial experts advocate stashing away a considerable amount of money to help you stay afloat while in a tight spot.

Losing your main source of income can turn your financial condition upside down. Money ceases to come in, and expenses keep burning a hole in your pocket. Earmarked funds quickly deplete, and if they are not replenished sooner rather than later, your budget will go bankrupt. You will not have sufficient money to get by.

Job insecurity is inexorable. Despite stellar performance in the workplace, you may be shown the door. To cushion the blow of unexpected redundancy, you should have an inordinate amount of money in your rainy-day fund account. It will help you keep your body and soul together unless you land a new job.

If you suspect you are about to lose your job

Have you got the inside scoop on the company’s plan to let go of some of its employees? Managers and recruiters often make veiled allusions in meetings. Do not ignore those oblique imputations, especially when the business is going downhill. You might be constantly being urged to go above and beyond your usual standards, which is a clear sign that a lay-off sword is hovering over your head.

Do not be confident about your stellar performance because it cannot prelude you from being redundant because downsizing seems to be the best solution to retain as much money as possible when the company is unable to generate business. If the current scenario in your workplace resembles the aforementioned one, you should immediately start figuring out ways to strengthen your finances.

• Whittle down your expenses

It is worthless to lock the barn door after the horse has bolted. Despite good academic qualifications and experience, many people face prolonged unemployment. The demand for jobs on the market also determines whether you will be able to land a job quickly or not. Therefore, it is always suggested that you have an enormous size of savings to get by during unemployment. In order to save money as much as possible, you will have to cut back on your regular expenses.

• First and foremost, take stock of incomings and outgoings. Categorise all your expenses to have a better idea of how much is going out and where.
• Divide those expenses into discretionary and essential. Of course, you will have to put a lid on your inessential expenses. Look for cost-cutting areas such as restaurant meals, entertainment costs, subscriptions, and the like.

The money you save by reducing unnecessary expenses should straightaway go towards your savings account.

• Build an emergency cushion

A sound financial condition cannot obviate the need for a rainy-day fund. You must have some savings to fall back on when you lose your job. How will you get by without a safety net? A nest egg cushions the blow of unemployment by providing an immediate injection of cash to meet your regular expenses.

Choose a fixed amount of money that you will keep contributing to it, every money you receive as your paycheck. Link your savings account to your salary account and use an auto-debit mode so that every month, money is pulled according to the set limit from your salary account. In addition, divert some money to your emergency corpus by cutting non-essential expenses.

How long it will take to land a new job depends on the skills you need for the job. Sometimes, it may take months, and therefore, experts suggest an emergency cushion of three months’ worth of living expenses. The greater the size, the better it is.

One of the significant advantages of building an emergency cushion is that you do not have to be reliant on a loan on benefits from a direct lender.

• Start looking for work opportunities

As soon as you suspect that you can be sacked, you should immediately start looking for new work opportunities. Update your resume and upload it on a job portal. You can directly apply to recruiters you come to know about through social media platforms like LinkedIn.

Take advantage of networking. People in your network would be able to recommend you to recruiters who reach them with vacancies.

If you have already lost your job

Unemployment nabs you without warning. Once you lose your job, you need to start finding a new one. As far as it is about keeping the wolf from the door, you should take the following steps:

• Reassess your spending to reframe your budget

You cannot be reckless with monthly spending. Now, you need to scrutinise where each dime goes. You should try to live off a bare-bone budget. It means you will meet only essential expenses and ban discretionary expenses.

As you are jobless, no money will come in. Make sure you are able to stretch your savings until you find a new job. Figure out some ways to reduce your essential expenses, too. For instance, you should prefer inexpensive staple food such as macaroni, pasta, spaghetti, rice, and potatoes. Avoid food wastage. Leftovers can be used to make a new recipe. Buy groceries from local thrift markets, where you will most likely obtain huge discounts.

Buy only those items in bulk that are non-perishable and help you save money. Because you are living off your savings, it is ideal not to stockpile. Buy items as per your needs.

• Apply for benefits

Immediately after losing your job, you should apply for benefits. Unemployment benefits will help you get by until you land a new job. They are provided only for six months. Make sure you have checked the eligibility criteria for these benefits.

Reframe your budget by clubbing your savings and unemployment and other benefits like childcare allowances. You will be able to create a functional budget when you take stock of how much you have to spend.

• Look for a side gig or part-time job

With scanty benefits and paltry savings, you may not be able to stretch your pound. Therefore, it is recommended that you look for a side gig or part-time job. One of the benefits of having a part-time job is that you will receive a fixed remuneration, which will help you meet your expenses smoothly.

Various freelance platforms are out there to help you get some work. You do not need to look for work in your field. For instance, if you have a flair for writing, you can become a freelance writer if you are unable to qualify for a freelance project in any field. Side gigs such as pet sitting, babysitting, and lawn making, to name a few, can come in handy.

The bottom line

Unemployment is a tough phase to endure, especially if you do not have enough savings. You should always create a budget and set aside money for a rainy day. Make sure you build larger savings so you do not run out of money after a job loss. Keep your expenses as low as possible. A spendthrift nature will not help you at all. In addition, look for part-time jobs and side gigs to make ends meet.