How To Survive A Salary Cut Or Job Loss

Do not take hasty decisions and review financial goals and plans regularly, say experts

- Vishav

With the whole nation under lockdown for almost two-and-a-half months now, the wheels of the economy have been forced to a stand still, so much so that a recession is the most likely outcome. In such a scenario, many organisations have decided to take some drastic steps to reduce their operational costs, including salary cuts for their employees, and even lay-offs in certain cases. The travel and leisure industry and the media industry are the worst hit while no sector has been left untouched by this crisis. While some surveys predict two in five employees facing salary cuts, others indicate at one-fourth of corporates already announcing pay cuts while many others actively considering such a step.

For those who now have reduced income due to pay cuts, while the same level of liabilities, the big question is of survival. With their financial planning turned upside down due to this new reality, it is time to revisit and re-plan their financial goals and explore new possible ways to achieve them.

According to Anurag Jhanwar, Co-Founder and Partner, Fintrust Advisors, COVID-19 has brought back peoples’ focus on the importance of personal financial planning, within which the key focus today is on survival, with necessity taking precedence over other discretionary items. “With the lockdown and closure of activities, there has been collateral damage to the widespread masses and as cash flows dry up, there is need for people to be very prudent with money and choice of spending,” he says.