Can you afford to loose your job?

This is an interesting question asked by Deepak Shenoy on his blog. I wrote a post on similar lines almost two years back (surviving layoffs), although I could not complete the post. Interestingly cutting expenses is not the advise he wants to give. Here is the quote from his blog

Why aren't you telling me to cut expenses?

I could, and this is advice you will get all over the internet. Cut your expenses, hunker down, don't eat out, sell the car and take public transport, change clothes only every other day and so on. Yes, you can do this. But this is easy preaching. It's not practical because you will do it anyhow, if you have to……

Cutting expenses is temporary and defeating. Sometimes doing so gives you a false sense of security - such as: if I cut this and that, I can survive two years! Yes, but like the joke goes:

Preacher: If you stop drinking, the women, the eating out, sweets, salty and fried things , you'll live to be a hundred!

Patient: But what's the point if I can't do any of them? ("Toh jee ke karunga kya?")

Don't do it unless you absolutely have to.

I dis-agree to some extent. Here are my  comments to his post on this. I know that advise on cutting expenses is spread all over internet. The point is not to cut down everything and live like a sage. It will not be practical, but reducing expenses by certain amount will, not only help financially but also help mentally. I know of folks who go out dinning almost 3-4 times a week, which can be reduced to 1-2 times a week. One of my friend goes out for shopping every weekend. It has become a ritual to him. With a job loss you can skip 1-2 weeks in a month or you can reduce the amount that you used to buy every week. It is all about striking a balance and keeping a certain check on your expenses.

I would rather suggest to act pro-actively instead of re-actively to a job-loss. It is well known that job-loss is going to be very common in coming years. So isn’t it wise to prepare for it pro-actively during the time you have a job rather than to react after a job-loss? Here are some tips to prepare pro-actively while you have a job:

  • Keep an emergency fund, but do not dig into it unless it is an emergency.
  • Get a  good job-loss insurance if available
  • Have a personal family health insurance, since with job-loss your corporate insurance also goes away too
  • Do not dig into your PF (question was asked on Deepak’s post), It is necessary to understand the importance of PF, which is for building corpus for post-retirement rather than emptying it for a temporary situation of job-loss
  • Continue to develop your professional skills (even if you have 20-30 years of experience)
  • Develop some hobby and get deep into it. You will hear numerous examples where hobby gets converted to a business or earn extra income
  • Nurture a good network of friends (more specifically in your industry)
  • Try to have a work-life balance and spend time on maintaining good health. Illness during job-loss is not going to help you
  • Everyone understands the importance of diversifying investments, so for those who are not married it may not be bad idea to think of a similar diversification when you get married. Choose a spouse working in a different industry rather than your own. If you are a software engineer, diversify by marrying a fashion designer or an architect. It will spread the risk of both of you loosing job at the same time.

All of these tips are just common sense. But I will accept that it is easy to preach than to follow them.

Do you have any more suggestions?


  1. Hi,

    I saw your blog today and liked the articles.. Could you please enable feedburner so that I can get the new posts via mail.. That helps a lot to follow blogs imo


  2. Thanks for visiting Bhaskar. I have enabled the feedburner.