How can women maintain their financial health during prolonged unemployment?

“I lost my job a few months after the first national lockdown to slow the spread of COVID-19 infections was declared in early 2020. Hundreds of job applications and countless interviews later, I found a job in February 2021 only to have They told me a month. later by my potential employers who were no longer recruiting new candidates because by then the second wave of the pandemic had already reared its ugly head,” laments Rashida Siddiqui, 34, a Delhi resident who previously worked as a business analyst. in a startup

Siddiqui’s story is eerily similar to that of millions of women in India who faced the brunt of the pandemic’s economic turmoil in the form of cruel job losses. A report published by the Center for Sustainable Employment at Azim Premji University in India showed that during the first lockdown in 2020, only 7 per cent of men lost their jobs, compared to 47 per cent of women who lost their jobs and did not return to work at the end of the lockdown. year. In the informal sector, women fared even worse: Between March and April 2021, rural Indian women in informal jobs accounted for 80 percent of job losses. Data from the Center for Monitoring the Indian Economy He showed that female labor force participation plummeted to 9.4% during the period between September and December 2021, the lowest rate of female labor force participation since 2016, when the data was first compiled.

Although the economy has come back to life after being derailed by the pandemic, India’s employment landscape continues to show a battered appearance. Another report recently released by the Center for Monitoring Indian Economy Pvt, a private research firm in Mumbai, revealed that more than half of the 900 million Indians of legal working age are no longer even looking for work. Unsurprisingly, the majority of these Indians are women: About 21 million disappeared from the labor force, leaving only 9 percent of the eligible population employed or looking for work.

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For women, the loss of income and livelihoods has profound indirect effects on the quality of their lives. Monetary independence gives women the freedom of choice: the choice to live life on their own terms, the choice to leave abusive homes and families, the choice to access healthcare facilities, and the ability to provide for their dependents. such as elderly parents and young children. “I haven’t had a job for two years. Having a regular paycheck afforded me little luxuries, and more importantly, I had more clout in terms of taking care of my parents. Thankfully I had been diligently saving and investing before the pandemic hit and that has largely kept me afloat. I managed to find some freelance jobs that pay me decently, but maintaining my savings and investment stock is proving difficult on my meager income,” says Siddiqui.

Derailment of financial goals can become an additional cause for concern during prolonged periods of unemployment. While it can be difficult to continue investing in a way you were used to before losing your job, maintaining continuity with every bit of money you can save is imperative. Siddiqui says: “Fortunately, my husband earns enough; As a family, we haven’t had to cut corners after I lost my job. However, personally, my situation is far from comfortable. Although he has been giving me money whenever I have needed it, it is not the same as having an income of my own. I have been diligently investing what little money I can save after all my expenses because I don’t want my financial goals to be completely sidetracked until I find a new job. Mutual fund investments have emerged as a savior because I don’t need to wait for a lump sum to accumulate to invest. Despite the turbulence I have faced in the last two years, I have invested every month in mutual funds through SIP.”

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Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on the financial inclusion of women and intends to provide pathways to financial security for them.
Aditya Birla Sun Life Mutual Fund has started a special initiative called For Her that focuses on the financial inclusion of women and intends to provide pathways to financial security for them.

Preeti Zende, founder of Apna Dhan Financial Services, says sticking to a budget is sacred to ensure your financial health doesn’t bottom out during extended periods of income disruption. “If you contribute to monthly household expenses, then you better make sure you stick to the budget and religiously stick to essential expenses each month. Make sure you don’t use your emergency fund for discretionary spending. You have to postpone that expense until you get your job back,” she says.

Zende also warns that caution should be exercised before liquidating your emergency fund or any of your existing investments. “If your emergency fund seems insufficient, then you can liquidate the investments you were making for any urgent short-term financial needs. But never liquidate investments for ad hoc or impulse purchases. In addition to this, make a list of your mandatory expenses for the next six months, including medical expenses. Check to see if your total savings, which are liquid and haven’t been deployed for your long-term goals, would be enough to cover them. If you think that the liquid amount would not be enough, stop your SIPs and other investments for a while. But if you have a solid pool of savings, more than you have in your emergency fund, then you should continue to fund your SIPs, especially long-term ones,” says Zende.

key takeaways

– A review of your existing portfolio with the help of your financial advisor can help you weed out any investments that are not working for you and can be channeled into asset classes that are better suited to your situation and goals.

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-Any decision to make use of the loans must be taken carefully. In the event that your job search drags on for a few months, the burden of debt can be seriously detrimental to your financial health in the medium and long term.

– Derailment of financial goals can become an additional cause for concern during prolonged periods of unemployment. While it can be difficult to continue investing in a way you were used to before losing your job, maintaining continuity with every bit of money you can save is imperative.

– Make a list of your mandatory expenses for the next six months, including medical expenses. Check to see if your total savings, which are liquid and haven’t been deployed for your long-term goals, would be enough to cover them.

– If you have a solid reserve of savings, more than what you have in the emergency fund, then you can finance SIPs, especially long-term ones.

This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund.