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.

Save to avoid compromise in your career: A good kitty in savings will prevent any desperate measures to compromise in career. Just compare the case of two executives who are being laid off – one is having one year’s take-home pay in the bank and while other is no savings. the second executive will immediately try to settle for a job (whether he likes or not) to save himself from financial distress. Savings are a big relief for the desperate feelings of needing a job when you don’t have cash in the bank. Savings allow you to better choose a position that meets your needs and not taking any job because you need the money right now.

Lower debt helps in more disposable income: If you have lower debt (loans) means you will have lower monthly installments to pay. This will give you that extra flexibility and while working you can enjoy more from life by having more disposable income. Also if your job is in danger, having lower debt means your payments are low and will help you in preserving your cash flow from your savings. This means you can survive without a job for a long time if required.

Credit Rating reflects your capability: Your credit rating will have a great influence on your ability to be hired. Some of the companies, with your written consent (background check), can see your credit information. Hence the companies can use that that information for not hiring you. If the candidate can not manage his finances how will he manage the job?

More savings means more money for the future like – retirement etc. Not having enough savings will significantly reduce your choices about your life and career. For instance if you want to make a decision to choose to no longer work – your savings will be a determinant factor.

Can take more career risks: How well you manage and invest your money and finances will sure have an impact on your career options. More savings cushion will help you in taking more risks – which may help you in earning more (higher risk – higher returns).

One of my sincere advise to candidates is to make a personal finance plan while making career plan. They go hand in hand together as our savings come out of our earnings from job and our future jobs may depend on savings.