Budgeting During Job Loss

Job loss is one of the most stressful financial events. Having a plan helps you survive and recover without long-term damage.

Immediate Actions (First Week)

Day 1-2: Assess Your Situation

Calculate your runway:

Available funds:
├── Savings account: ₹_______
├── Emergency fund: ₹_______
├── Fixed deposits: ₹_______
├── Liquid investments: ₹_______
└── TOTAL AVAILABLE: ₹_______

Monthly essential expenses: ₹_______

Runway (months) = Total ÷ Monthly essentials

Example:

• Available: ₹3,00,000
• Monthly essentials: ₹40,000
• Runway: 7.5 months

Day 2-3: File for Benefits

Immediately apply for:

• Withdraw PF (if eligible and needed)
• Check for severance package
• ESIC benefits (if applicable)
• Company’s notice period payment

Day 3-7: Create Survival Budget

Cut to absolute essentials immediately.

The Survival Budget

Essential vs. Non-Essential

Sample Survival Budget

Normal budget: ₹65,000 Survival budget: ₹35,000

SURVIVAL BUDGET: ₹35,000

├── Housing: ₹20,000 (negotiate if possible)
├── Utilities: ₹2,500
├── Groceries: ₹6,000 (strict meal planning)
├── Transportation: ₹1,500 (job search only)
├── Phone: ₹500 (downgrade plan)
├── Health insurance: ₹2,500 (DO NOT cut)
├── Loan minimums: ₹2,000
└── Buffer: ₹500

SAVINGS: ₹30,000/month

Expense Cutting Strategies

Immediate Cuts (Day 1)

Negotiate These (Week 1)

Longer-Term Options

If job search extends:

• Move to cheaper housing
• Move back with family
• Rent out spare room
• Sell unnecessary items

Managing Debt During Job Loss

Priority Order

1. Secured loans (Home, Car): Pay minimums, request moratorium
2. Unsecured loans: Contact lender before missing payment
3. Credit cards: Pay minimum, don’t use for expenses
4. Personal loans: Negotiate restructuring

Requesting EMI Moratorium

Call your bank and say: “I’ve lost my job and need to request an EMI moratorium for [X months]. I want to continue paying but need temporary relief.”

What to expect:

• 1-6 month moratorium possible
• Interest continues accruing
• No late fees during moratorium
• Get everything in writing

What NOT to Do

❌ Stop paying without communication ❌ Ignore collection calls ❌ Take new debt to pay old debt ❌ Use credit cards to fund lifestyle ❌ Cash out retirement accounts

Using Your Emergency Fund

This Is What It’s For

If you have an emergency fund, use it. Don’t feel guilty—this is exactly its purpose.

Strategic Withdrawal

Order of fund usage:

1. Savings account (most liquid)
2. Emergency fund
3. Break fixed deposits (if needed)
4. Liquidate investments (last resort)

Don’t Drain Completely

Try to keep minimum ₹50,000-1,00,000 buffer even during unemployment.

Income During Job Search

Immediate Income Options

Monetize What You Have

Unemployment Benefits (India)

ESIC (if applicable):

• 50% of salary for up to 90 days
• Must have contributed for 2+ years
• Apply within 30 days of job loss

Weekly Job Loss Budget Review

Every Sunday

1. Count remaining funds
2. Track expenses from past week
3. Update runway calculation
4. Identify any cuts possible
5. Review income opportunities

Monthly Milestone Check

Protecting Your Future Self

Don’t Touch (If Possible)

• PPF/EPF: Retirement is far but important
• ELSS locked-in funds: Wait for lock-in to end
• Children’s education fund: Last resort only

Keep Paying (If At All Possible)

• Health insurance: One medical emergency without insurance = financial devastation
• Term insurance: Don’t let it lapse (your family depends on it)

Mental Health Note

Job loss is emotionally difficult. Financial stress adds to it.

Remember:

• Job loss doesn’t define your worth
• This is temporary
• Taking care of finances reduces stress
• Accept help from family/friends if offered
• Stay connected with your network

Sample 3-Month Job Loss Plan

Month 1

Budget: ₹35,000 Fund usage: ₹35,000

Actions:

• Implement survival budget immediately
• File for all benefits
• Update resume, LinkedIn
• Apply to 10+ jobs/week
• Start freelance profile

Month 2

Budget: ₹35,000 Fund usage: ₹70,000 (cumulative)

Actions:

• Continue survival budget
• Take any freelance work
• Expand job search network
• Consider part-time work
• Review and cut more if needed

Month 3

Budget: ₹35,000 Fund usage: ₹1,05,000 (cumulative)

Actions:

• Evaluate progress
• Consider field change if needed
• Intensify networking
• Accept any reasonable offer
• Plan major changes if job search extends

When Job Search Extends

6+ Months Unemployed

Consider:

• Geographic relocation
• Industry/role change
• Lower salary expectations
• Contract/temporary roles
• Further education/upskilling

Avoid:

• Long-term debt for expenses
• Desperation decisions
• Isolation
• Giving up

Key Takeaways

• Calculate runway immediately — know how long you can survive
• Switch to survival budget — cut everything non-essential
• Use emergency fund — that’s what it’s for
• Communicate with creditors — before missing payments
• Generate any income — freelance, gig work, anything
• Protect insurance — don’t let health/term lapse
• This is temporary — you will work again

Next: Creating a Spending Plan — A flexible alternative to traditional budgeting.