How to deal with a Salary Cut due to Co-vid 19
Understand that a Salary cut is a possibility
First and foremost, be aware of the possibility of a pay cut. While organisations may not want to lay off employees, the drain on resources may force them to temporarily cut pay. This is seen and reported in most conglomerates in Sri Lanka as well as a round t he wo rl d . Therefore, it is wise to be prepared for what maybe inevitable.
Suspensionof Loan Payments
Speak to your banks and get advice on what relief is available.
The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to introduce several extraordinary regulatory measures to provide flexibility to Licensed Commercial Banks and
Licensed Specialised Banks to provide some relief to businesses and individuals affected by the COVID-19 crisis.
Some of the initiatives taken by banks therefore include extension of loan and credit card payments as well as availability of low interest loans.
Cutdown expenses
The lockdown may have helped you realize that basic living expenses aren’t very high. It’s the discretionary expenses such as eating out, travel and leisure, and buying luxury goods that burn a hole in your pocket. If you’re new into the workforce and spend a major chunk of your salary on rent and utilities, consider moving to a cheaper accommodation.
Do not take new loans
You may be tempted to take a loan to tide over the situation temporarily, but that could pose a problem later. If you’re in a dire situation, consider asking your family and friends for help.
Look at other income
If a pay cut or job loss has made it difficult for you to remain afloat, you may want to monetize on your skills and hobbies to g enerate additional income. Giving online tuitions, conducting hobby classes or teaching a foreign language are some examples
Prioritise Short-Term Goals
If you have some amount available to invest but not enough to continue all your regular investments, you should ideally focus on near- term goals that are non- negotiable. For longterm goals, there is more leeway to make up the difference when normalcy returns. This is also a great time to sit down and analyse your expenses. With discretionary expenses severely curtailed because of the lockdown, it’s easy to identify how much money you absolutely need for your living expenses.
Employees across most industries are experiencing one of the three situations—indefinite leave without pay, deep pay cuts or layoffs. Salary cuts and job loss definitely means changing the way you live and spend, but you need to play smart to tide over the situation with minimum pain.