Job loss and unemployment stress are new issues that millennials today seem to face. Financial experts have been mentioning the upcoming recession—well, one segment of society is taking it seriously.
Since the Great Recession of 2007, millennials have been concerned about decreasing pay and job security. According to a 2019 analysis by Kevin Rinz, a Census Bureau economist, the average millennial lost almost 13% of their earnings between 2005 and 2017, nearly twice the 7% loss experienced by baby boomers.
With the pandemic and other issues, millennials face another challenge to keep their jobs. So, how does one prepare for job loss, and what can one do if it happens? Here are some moves to prepare for the inevitable and help maintain peace of mind.
Increase your cash reserves
The more money you have in savings, the easier it will be to keep up with your expenses. Make sure you have an emergency fund outside of savings to tide you over in the case of job loss. According to a GOBankingRates survey in 2018, 54% of millennials between the ages of 18 and 24 and 57% of those between the ages of 25 and 34 reported having less than $1,000 in savings.
That is significantly less than the minimum amount for emergency funds is three months’ worth of expenses. It’s essential to have enough liquid savings to support your economic stability and ascent, especially if you have experienced job loss. Otherwise, you may be compelled to depend on short-term loans with high-interest rates.
Pick up a side hustle
The gig economy is on an upward trend, and side hustles are easy to come by now. Since people who experience job loss are forced to stay at home and choose home delivery services for many of their consumer necessities, we see significant shifts in many areas. Based on the situation, some examples of side hustles include content writing, proofreading, ride-sharing, drop shipping, and ad marketing.
Those gigs can be done outside regular work hours, require minimal effort, and are easy to pick up. A study from 2020 by Zurich Insurance Group and the Smith School of Enterprise and the Environment at the University of Oxford found that 38% of Malaysian employees already employed full-time are considering joining the gig economy next year.
Of course, you have an unlimited list of gigs to choose from, so maybe find a new hobby that could make you money. After all, four million freelancers, or more than 26% of the workforce in Malaysia, operate in the gig economy. Indeed, you can earn more by doing gigs while trying to recover from the job loss.
Trim your expenses
Kids, let’s talk about the expenses we don’t need. The declining finances due to the pandemic is one factor that has made many millennials stressed out. 44% of millennials in Malaysia said they feel stressed out most of the time.
When you’re stressed, you might be tempted to pamper yourself. One of the easiest ways is by treating yourself to a fancy meal or a relaxing spa day. However, if you spend more than a few hundred ringgit on Grab Food and Starbucks every month, these are called non-essential expenses. Find some alternatives that won’t burden your wallet so much. Reducing your expenses is critical if you’re in danger of potentially losing a job.
Grow your core job skills
We can anticipate a rising unemployment rate if a recession occurs during the next 12 months. Even though the next recession we experience could be relatively moderate and brief, it’s crucial to take precautions in the event of a job loss. Remember, it’s always better to get ready for the worst.
You can do many things to prepare yourself, from preparing emergency funds, implementing a healthier financial lifestyle, or even starting to invest. However, the best way to not lose your job is to be extremely good at it. Making yourself indispensable makes it harder for your employer to let you go.
Losing a job is one of life’s most traumatic events, regardless of whether you were laid off, downsized, forced to retire early, or had a contract business dry up. If it happens, remember that you are safe and have a game plan in place. Allow yourself to grieve. Then when you are ready, face it and take control of your life. Fall back on your side gig, take up another hobby, look for a job you can do, and live your life.