Losing your Job
Losing your job can be a traumatic experience. Retrenchment can happen for all kinds of reasons, for example, when economic times are bad or your employer’s business is performing poorly or for reasons more specific to the person concerned.
Having some emergency savings will help tide you over the period of unemployment. Whether you have emergency funds to dip into or not, here are some ideas that may help you through this period:
- Draw up a budget for necessary expenses and stick to it to better manage where the money is going. Cut out all unnecessary spending like eating at restaurants and taking taxis. Be prepared to make changes to your lifestyle.
- It can be hard to assess how long the period of unemployment could last. If it looks like it could be a long time, you may need to make more drastic changes. If you find that the cost of maintaining a car and the car loan repayments are a drain on your savings that can be used to meet your living needs, do examine whether there are any penalties or costs if you redeem your car loan. If the proceeds from selling your car are likely to be insufficient to cover your car loan, do ask your lender what your options are.
- You may want to reprioritise your financial goals too. If you are deciding between saving up to pay for your children’s further education in full, or saving for your retirement, don’t forget that your children have the option of applying for student loans.
- Stop using credit facilities which incur high interest charges if you are unlikely to keep up with repayments. Try to stay on top of all your debt repayments. You may find that you need to restructure some of your debts. Approach your lenders quickly to do this. Go to Credit Counselling Singapore for assistance in debt management if you require more help.
- If you have life insurance policies, do ask your financial adviser representative what options you have. You may be able to take a premium holiday or take a loan against your policy’s cash value (if any) and this will pay for the premiums to keep your policy in force, although interest will be charged. But these are short term measures and you should not rely on this for a long period. Ask your financial adviser if you can convert your policy to a fully paid up one or reduce the sum assured. If you do not take up these options and stop paying the premiums, it could lead to a termination of your insurance coverage. If you apply for coverage later, you may have to pay more, or even be ineligible depending on your health.
- Take a look at your investments and see what can be easily liquidated without penalty or too much cost if you need access to funds. If you cannot afford to lose money, now may be the time to liquidate riskier assets.
These measures may seem tough at first sight, but they can help manage your finances over this tough time.
When you find employment again, make sure your priority is to rebuild your emergency savings. Always aim to keep 3-6 months of your income as savings at all times.
Some of us may not have existing savings or assets to rely on. If you need help and assistance, you can approach the Community Development Councils (“CDC”) for the following:
- Employment Assistance
The CDCs can assist you in needs assessment, career profiling, training opportunities and job-matching to help you find suitable jobs.
ComCare provides social assistance to low-income individuals and families. Depending on your needs and eligibility, you may receive short or medium-term temporary help or fee subsidies for children from low income families who are placed in childcare, kindergarten or student care centres. Further information on ComCare can be found at the Ministry of Social and Family Development website .
If you need help, you can call ComCare Call at 1800-222-0000 or go to the Community Development Council (CDC), Citizens’ Consultative Committee (CCC) or a Family Service Centre (FSC) near you.
The above information is prepared in collaboration with the Central Provident Fund Board, Ministry of Social and Family Development and Credit Counselling Singapore.