Tough times see higher PF withdrawls (Rise By A Record 32% in 2008-09) – How to manage your finances when without a job?

As a clear sign of tough financial times, the Employees’ Provident Fund Organization (EPFO) saw a record number of people emptying their PF accounts recently. In 2008-09, it rose by a record 32%, up from a 10 per cent increase the year before. The total number of withdrawal applications filed across India crossed the 1 crore mark. In Delhi alone, the average applications filed per month rose to 1 lakh between Oct 2008 and Mar 2009, from 30,000 between Apr and Sept 2008. According to a labour ministry report, about five lakh people lost their jobs between Oct and Dec 2008.

The rate of unemployment in India is increasing and the fact that many employees are still sitting on the bench. No one is immune from layoffs.As layoffs began — about 5 lakh people lost their jobs between October and December 2008, according to a Labour Ministry report — those who had been riding the wave and taken loans for everything, from homes to luxury cars to vacations, were bowled a googly.Most of the applications were filed between October 2008 and March 2009, as the effects of the downturn began to set in.The number of withdrawal applications filed across India crossed the 1 crore
mark in 2008-09.

The Employees’ Provident Fund Organization (EPFO) has confirmed that the number of people emptying their PF accounts — seen as a last resort in times of financial distress — has risen by a record 32 per cent in the financial year 2008-09, up from a mere 10 per cent increase the year before.In Delhi and Mumbai, there has been a similar rise in the number of PF claims filed. In Delhi, the average number of applications filed a month rose from 30,000 between April and September 2008 to over 1 lakh between October 2008 and March 2009. Mumbai has seen an increase of 30,000 applications a month.

Most financial advisers suggest saving the equivalent of six months’ salary to tide employees over if they lose their job. People will probably need more if they have the family and if they are the primary source of earning. But if times are good, most people do not think about how they spend money. If a person is  facing a layoff, he need to come up with a plan for cutting expenses.Develop a budget that eliminates most unnecessary expenses, but don’t completely cut entertainment.

We know how much the mortgage or rent and monthly car payments are, but we don’t pay attention to daily spending. How much do we spend going out to eat? What is our weekly grocery bill? What about utilities and insurance? Being more
aware of how you spend your money will cause you to spend it more carefully.Losing your job can be emotionally upsetting, and it can have negative implications for your financial health, as well. Without a steady paycheck, you’ll likely face a number of difficult financial decisions.This is no time to buy that new car or DVD player. If you are already in debt, particularly credit card debt, you may want to consolidate your loans into a single monthly payment with a lower interest rate. If you own a home, consider a low-interest home equity loan.

A number of governmental programs are available to help you in the event of a layoff — take advantage of them. You will be able to stretch your savings if you have additional income. Consider part-time work while you look for a job.
While it would be best if you could find temporary or part-time work in your field, your hobbies and other interests may offer possibilities for income. Remember: Your primary job is to find a new job. Any part-time work should allow time and flexibility to actively pursue your job search.