The 21st replenishment of the International Development Association’s (IDA21) – the World Bank’s low-income lending arm – due to conclude in December, takes place amid a worsening debt crisis. Even if IDA21 lives up to calls from World Bank President Ajay Banga for record breaking funding, the unfolding debt crisis will likely limit IDA’s ability to provide highly concessional loans and grants to its low-income country (LIC) members.

When an IDA country faces debt difficulties, its loans can be converted to grants, though this support is capped according to unpublished country quotas. From 2020 to 2022, as LICs struggled with the exogenous fallout of the Covid-19 pandemic and their debt situations worsened, the ratio of grants- to- loans in IDA’s portfolio rose from one-fourth to one-third. IDA began converting loans of moderately debt distressed LICs to 50-year credits instead of its usual mix of credits and grants which, according to Clemence Landers and Hannah Brown from US-based think tank Center for Global Development (CGD), should restore grants to a manageable level.

However, according to Development Finance International, the current debt crisis is the ‘worst ever’, with many LICs now paying more on debt servicing than on health, education, social protection and climate combined, meaning this crisis could place significant strain on IDA’s funding model.

The strength (and weakness) of IDA’s funding model: market-based finance

Since its 18th replenishment (2017-19), IDA has issued market debt backed by its equity base, mostly comprised of its outstanding loans (see Observer Winter 2017). This approach has allowed IDA to grow its resources to $185 billion. In IDA20, $23.5 billion of donor contributions were leveraged into a $93 billion replenishment, $33.5 billion in borrowing and $36 billion in reflows via repaid debt from IDA members. As long as grants are less than contributions, IDA does not have to dip into its equity base – but if it does, it could cause a larger contraction in its loan portfolio because its equity is the basis on which it raises market finance.

According to CGD’s calculations, a moderate worsening of LIC debt dynamics would require at least $36 billion in grants over the IDA21 replenishment cycle, requiring an additional $12 billion in contributions compared to IDA20 to avoid dipping into IDA’s equity base. A significant worsening would require at least $45 billion in grants over the replenishment cycle, requiring an additional $22 billion, compared to IDA20. As donor contributions to IDA have fallen by 20 per cent in real terms over the last decade and, as CGD notes, many large donors have signalled that reaching even the level of their contributions for IDA20 may prove difficult, even the moderate debt crisis scenario could significantly affect IDA.

As debt repayments surge and capital flows turn net-negative, LICs have been forced to rely on IDA for affordable finance, while high-income countries have persistently failed to meet their 0.7 per cent GNP target for Official Development Assistance or agree on a new allocation of SDRs (see Observer Summer 2024).

Quality vs quantity

However, concerns about the size of the IDA21 replenishment should not obscure more fundamental questions of how effective IDA assistance has been: only 17 out of 81 IDA countries have graduated out of IDA eligibility since 1996 (see Observer Spring 2024).

IDA assistance remains linked to highly problematic policies that have a strong pro-liberalisation, deregulation and private sector bias. This has favoured profit extraction by international investors, been linked to the financialisation of Global South economies, and has failed to catalyse economic transformation (see Report, Financialisation, human rights and the Bretton Woods Institutions: An introduction for civil society organisations). This approach looks set to continue in IDA21, with the draft policy package released on 17 June containing numerous references to efforts to crowd in private finance into climate and development efforts.

“IDA is of critical importance for the 39 African states that rely on its financing. But just ensuring it can continue current levels of support is not enough,” noted Jane Nalunga of Ugandan civil society organisation SEATINI. “We need a better IDA, that actively supports their economic transformation, not just keeps them on life support, and to do this we need rich countries to increase their contributions to substantially reduce IDA’s reliance on market finance.”

She is, of course, referring to TikTok’s song of the summer, an anthem for women seeking rich men. “I’m looking for a man in finance / With a trust fund / 6’5 / Blue eyes,” the lyrics go.

Turns out, the song doesn’t exactly capture the prevailing mood in 2024.

NBC News reported from what’s arguably the nation’s prime hunting ground for the very man the song describes — Lower Manhattan’s financial district, the home of Goldman Sachs, the setting of HBO’s Industry, and of course, literal Wall Street.

At the watering holes around these mega banks, we spoke to about a dozen women who gave us the bottom line: they’re not necessarily looking for the finance guy. Though they wouldn’t mind someone who picks up the bill, and then some.

The catchy “Man in finance” tune fits the internet’s current relationship discourse like a tailored jacket. 

The song dredges up tensions about money and dating at a time when gender roles are constantly in flux, dating is expensive, women say they’re tired of compromising, and app fatigue is standing in the way of personal connection.  

‘Finance bros’ are boring, women say

“Man in finance” was first posted as a 19-second TikTok video in April by creator Megan Boni, a 27-year-old from New York. It’s since gotten over 50 million views, been remixed by DJ and producer David Guetta, and earned Boni a record deal.

But TikTok’s obsession with “Man in finance” has transcended the original video. Other creators have weighed in with tips on how to find this elusive finance, trust fund, 6’5, blue-eyed man. One graduate of Harvard Business School even made a video ranking the various finance jobs according to income, free time and likability. 

(Venture capital and private equity workers fall at the top of the list, she said, though they will likely mansplain constantly.) 

In some major cities, fringe single women have been seen taking to the streets, holding up cardboard signs with the song’s lyrics and beckoning men who match its description. 

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But despite the phenomenon that she created, Boni said that she, herself, isn’t actually looking for a man in finance. 

“I’m looking for someone with a dad-bod who understands my humor, lets me shine a little and balances me out,” she said. 

Financial District women concur. Surrounded every day by Wall Street bros, they say they can be summed up by a tailored suit, a backpack, an ego, and an air of hurriedness.

But their ultimate sin: men in finance are boring, young women said. 

“They’re like a warm glass of water, and I’d rather have something with a little more sparkle in it,” said Stella Mannell, 22. “They dress the same, you can always spot one… I’d rather have someone who’s fun and vibrant and exciting than someone who has a lot of money. I’d rather go on a date to McDonald’s than go to The Polo Bar with a super lame guy.”

Dothan Bar, 21, who works as an intern at an investment bank, said his co-workers are aware of social media’s collective stereotypes and the fascination with them — and they sometimes lean into the aesthetic to get girls. 

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“They take care of themselves very well,” he said. “It’s a job that shows a lot about your character and your ambition. … I know people who work 100-hour weeks in finance.”

He’s not a fan, he said, and he’s switching to tech after college. 

Talking about layoffs is always a stress-provoking conversation. It’s not something you really want to think about — but according to experts, it’s the key that will protect you financially.

Preparing yourself for impending layoffs is the one thing within your control, and the good news is you can take proactive steps today.

GOBankingRates spoke with financial experts Angela Ashley, registered investment advisor and founder and CEO of Unique Investment Advisors, and Dennis Shirshikov, finance expert and head of growth at Summer, to discuss the strategies you should adopt.

Find Out: 12 Ways To Get Ahead of 99% of People Financially According to ChatGPT

Try This: 5 Unusual Ways To Make Extra Money (That Actually Work)

“Protecting your finances in anticipation of a potential layoff involves a combination of proactive steps and strategic planning,” Ashley said. “I regularly advise my clients that preparing for the worst is a savvy approach that pays dividends when life’s inevitabilities arise.”

Read below for more of their insights on how to protect yourself financially against layoffs.

Build a Robust Emergency Fund

“Ensure you have a cushion to cover essential expenses if you lose your job,” Ashley said. “Setting up an emergency fund is the very first step in preparing a financial plan. It’s vital to take action to save six months’ worth of living expenses in a liquid, easily accessible account like a high-yield savings account or money market fund.”

Read Next: How Much Does the Average Middle-Class Person Have in Savings?

Diversify Your Income Sources

“Reducing your reliance on a single income stream is a key step in achieving financial independence,” Ashley said.

She recommended exploring side gigs, freelancing opportunities or passive income sources, like investments in dividend-paying stocks, rental properties and digital assets.

Invest In Continual Learning

“Making yourself more valuable at your current job can help protect against layoffs,” Shirshikov said. “Invest in learning new skills or certifications relevant to your industry. This not only enhances your job security but also opens up opportunities for career advancement.”

Enhance Your Professional Skills and Network

“Improve your employability and expand your professional network,” Ashley said. “Invest in continuing education or certifications relevant to your field. Attend industry events, webinars and networking functions to connect with peers and potential employers. Update your LinkedIn profile and resume to highlight your skills and accomplishments.”

Review and Optimize Your Budget

“There are a number of helpful budgeting apps available that make budgeting a breeze in today’s modern world. Identify areas where you can reduce expenses and increase savings,” Ashley explained.

She suggested tracking your spending habits to identify nonessential expenses that can be cut.

“Negotiate lower rates for recurring bills such as utilities, insurance or subscriptions. Allocate more funds towards your emergency savings and debt repayment,” she said.

Shirshikov agreed that it’s crucial to review and reduce expenses.

“Conduct a thorough review of your expenses and identify areas where you can cut back,” he explained. “Reducing discretionary spending and unnecessary costs can free up money that can be redirected into savings or investments.”

Protect Your Investments and Retirement Accounts

Ashley also recommended safeguarding your long-term financial goals amid short-term uncertainties.

“Review your investment portfolio for diversification and risk management,” she said. “Consider reallocating assets to safer options like bonds or stable dividend stocks. Avoid making rash decisions driven by short-term market fluctuations.”

Understand Your Severance Package and Benefits

“Don’t overlook any applicable severance options,” Ashley said. “Maximize the benefits and financial support provided by your employer. Familiarize yourself with your company’s severance policies and entitlements. Review health insurance options and understand the timeline for coverage post-employment.”

She equally recommended consulting with a financial advisor or HR professional to clarify any uncertainties.

Maintain Adequate Insurance Coverage

“Protect yourself from unexpected expenses and liabilities,” Ashley said. “Review your health, life and disability insurance policies to ensure they meet your current needs. Consider umbrella liability insurance if you have significant assets or freelance work.”

Similarly, she advocated evaluating the need for unemployment insurance or supplemental coverage where available.

Update Your CV and LinkedIn Profile

“Enhance your resume and LinkedIn profile,” Shirshikov said.

He suggested keeping these updated with your latest achievements and skills.

“Being prepared to quickly apply for new opportunities can give you an edge if you are laid off,” he said.

Stay Informed and Proactive

“Anticipate changes in your industry and job market,” Ashley explained. “Keep up to date with industry trends and economic forecasts. Network with peers and mentors to stay informed about potential job opportunities. Stay proactive in updating your skills and adapting to market demands.”

She noted that by implementing these strategies, you can strengthen your financial resilience and minimize the impact of a potential layoff on your long-term financial goals.

“Each actionable step contributes to building a solid foundation that protects your finances and enhances your financial security in uncertain times,” she said.

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This article originally appeared on GOBankingRates.com: I’m a Finance Expert: How To Protect Yourself Financially Against Impending Layoffs in 2024