Practical Financial Tips After a Job Loss

This post was originally posted on Planner Bee.

Losing a job can be overwhelming, but it’s also an opportunity to reassess and take charge of your finances. With the right approach, you can navigate this challenging time and plan for the future. This guide offers practical advice to help Singaporeans manage their money and move forward with confidence after a job loss.

1. Assessing your financial situation

After a job loss, it’s important to understand your financial health. A clear picture of your resources and expenditures will help you create a realistic plan to manage your money effectively.

Evaluate savings and emergency funds

• Review savings: Check your savings accounts, fixed deposits, and other accessible funds. Add up the total amount you have available.
• Emergency funds: Assess how long your emergency fund can cover essential expenses. Experts recommend having 3-6 months’ worth of necessary costs in reverse.
• Liquid assets: Identify assets like stocks or short-term investments that can be converted to cash. Consider how quickly and at what cost these assets can be accessed.

Tip: Use budgeting tools like the Seedly app or YNAB (You Need a Budget) to organise your finances and track your resources.

Review monthly expenses

• Categorise expenses: Break your spending into:Fixed costs: Rent, mortgage payments, insurance, and utilities. Variable costs: Discretionary spending like dining out, shopping, and entertainment.
• Identify essential needs: Focus on critical expenses like housing, utilities, groceries, transport, and healthcare. These should be your top priorities.
• Spot areas to cut back: Look for non-essential expenses to reduce or pause, such as subscriptions, gym memberships, or premium streaming services.

For example, if your rent is $1,500, utilities are $200, and groceries cost $400, your essential monthly expenses total $2,100.

Understanding your financial position helps you see how long your resources can last, identify where to adjust, and plan your next steps.

2. Creating a realistic budget

After assessing your financial situation, it’s time to create a budget. A clear plan helps you manage your money wisely and make your resources last.

Eliminate non-essential spending

Start by reducing or eliminating discretionary spending to prioritise necessities.

• Dining out: Save money by cooking at home instead of eating out or ordering takeaway.
• Entertainment: Choose free or low-cost options, such as community events, public parks, museums, or digital library services.

Read more: 10 Pointless Purchases To Stop Spending On

Make sure your budget covers the basics—essential expenditures that keep your daily life stable.

• Housing and utilities: Allocate funds for rent or mortgage payments, electricity, water, and internet.
• Groceries: Plan meals carefully to avoid overspending and minimise food waste.
• Healthcare: Reserve enough for medical needs, including insurance premiums and medications.

Set a realistic spending limit

Once you’ve accounted for essentials, determine how much you can spend while staying within your available funds.

• Create a cap: Use your total savings and expected expenses to set a spending limit. For example, if your essential costs are $2,000 a month and you have $12,000 in savings, limit your monthly spending to $2,500 to cover at least six months.
• Stick to it: Use tools like MoneySense to track your expenses and ensure you stay within your budget.

A well-structured budget gives you control over your finances and helps you focus on what matters most.

3. Finding new income opportunities

Finding extra income can help ease financial pressure during this period.

• Freelancing and gig work: Leverage your skills to take on freelance projects or part-time jobs. Platforms such as FreelanceZone and Upwork connect freelancers with clients in Singapore.

Read more: What You Need To Know Before Starting a Freelance Career

• Government support: Look into financial assistance programmes. For example:
• The SkillsFuture Jobseeker Support Scheme offers up to $6,000 over six months to those who are involuntarily unemployed. The ComCare scheme provides aid to individuals facing financial hardship.

4. Managing debt and financial obligations

Handling debts wisely can reduce stress and prevent long-term financial difficulties.

Reach out to creditors without delay

Inform creditors about your situation as soon as possible. Many financial institutions in Singapore offer support for those facing hardship.

• Payment deferrals: Banks like DBS and OCBC may allow temporary pauses on loan or credit card payments.
• Restructuring plans: Ask to restructure loans for smaller, more manageable payments over an extended period.
• Waived fees: Request temporary waivers for late fees or penalties.

Managing high-interest debt wisely

Focus on paying off debts with the highest interest rates first, such as credit card balances or payday loans.

Make minimum payments on lower-interest debts while allocating more to high-interest ones. For example, if you have credit card debt with 25% annual interest and a personal loan with 8% interest, focus on clearing the credit card debt first to reduce interest costs.

Explore debt consolidation options

Consider consolidating your high-interest debts into one loan with a lower interest rate.

• Debt Consolidation Plans (DCPs): Available through banks like UOB and Standard Chartered, these plans simplify repayment and may reduce overall interest.

Read more: How To Manage Your Finances if You Lose Your Job

5. Enhancing skills and networking

Invest in personal and professional growth to prepare for future opportunities.

Leverage SkillsFuture for learning

SkillsFuture helps Singaporeans pursue lifelong learning.

• From May 1, 2024, Singaporeans aged 40 and above receive a SkillsFuture Credit (Mid-Career) top-up of $4,000, which never expires.
• Use the credit to offset course fees for programmes that improve employability, from digital skills to project management.
• Visit the MySkillsFuture portal to find courses aligned with your goals.

Update your professional profile

• LinkedIn Profile: Highlight your skills, work experience, and certifications. A strong profile increases visibility to recruiters and employers.
• Networking: Join LinkedIn groups or local industry associations to connect with professionals in your field. Participate in discussions and share insights to build meaningful connections.
• Dedicate time daily to learning and networking. Attend webinars, workshops, and conferences to stay updated on industry trends and connect with others in your field.

Seek career guidance

Professional support can streamline your job search.

• Workforce Singapore (WSG): Offers career coaching, workshops, and job matching services. programmes, to help you navigate this transition.
• Careers Connect Centres: Provide personalised advice tailored to your career needs and make it easier to plan your next steps.
• Employment and Employability Institute (e2i): Provides career guidance, training, and job placement services to enhance employability.

6. Keeping your emotional and mental well-being in balance

Taking care of your mental health is essential during this transition. Include self-care activities in your routine, like regular exercise, meditation, or hobbies that help you relax. Reach out to family, friends, or support groups to share your feelings and experiences. If needed, organisations like the Samaritans of Singapore provide emotional support to help you cope. Remember to celebrate small milestones and remind yourself that this phase is temporary, part of your journey towards new opportunities.

Recovering from a job loss requires a thoughtful plan. Start by assessing your financial situation and creating a practical budget to manage your expenditures. Look into new income opportunities, tackle your debts with a clear approach, and invest in skills to improve your employability. Above all, don’t forget to focus on your well-being. Stay determined, take action, and keep a positive outlook—new opportunities are ahead.