You may be the next victim of the ongoing global economic recession. One wakes up in the morning and having a regular cup of coffee see it is splashed all over the papers. You head to work and it’s the hot topic of discussion amongst your colleagues. You’re back from work and switch on the television just to see the headlines of almost every news channel flash it. Owing to the numerous and sudden job cuts in the country, the fear of a secure future continues to linger in the minds of most today. So, what really is recession? How can you safeguard yourself from it? We take a closer look.
In layman’s language it can be defined as a period when the activity in an economy slows down, or a decline in the country’s Gross Domestic Product (GDP) generally over two consecutive quarters the current recession in our economy may have caught most of us unaware; however experts believe the key to your life will always remain in your hands. Today, the power at the workplace may have shifted back to the employer, as compared to the scenario sometime ago; however, strategic financial planning quick thinking and informed decisions can keep you afloat. Following are few quick pointers on how you can stay in good financial health amid the fury of recessional economy. From your salary invest 25 percent of this as a thumb rule the percentage of your age in debt and the remaining in equity.
Reiterated a number of times it is advisable to keep a planner in hand, or an excel sheet just a click away. We have started living in the future on the basis of anticipated income. However, it is critical to always live within your means. Take stock of your expenditure and start budgeting in any way that works for you. That way, you will know how much you can afford to spend. Curtail necessary expenses, even if it means rethinking your weekly outings.
With a number of banks offering credit cards and value added services like discounts on movie tickets, at restaurants or retail outlets plastic money is the hot favorite of many. Many do not realize that this demon can be quite nasty during recession, and choosing your ‘want’ rather than evaluating its need can be risky. With interest rates being high, it is bets to opt for a debit card lest you are unable to pay your credit card bill due to unforeseen reasons. A debit card will always give you a reality check be it when you go to an ATM, just realize how much you have spent the entire month, or when the SMS or online updates alert you of your balance.
You must be conscientious irrespective of the time and inculcate the habit of saving else a couple of years down the line, you may realize that the money you have does not justify the amount of years you have worked for
Another aspect would be to revaluate the need to take a loan. Today since loans are easily available people opt for them without adieu. If you absolutely need to take a loan, ensure that the monthly installment does not exceed 40 percent of your take home. Otherwise you will not have liquid money at the time of a crunch or loss of a job.
It is always better to have a back up in place and plan for the darkest cloud. This is a good time to use your personal skills or make a small investment to learn a new one, for tiding through choppy waters.
The recession may have brought its clout, but also brings with it invaluable lessons. It’s only when an alarm rings that we sit up and take notice of the necessary changes that need to be made. At any instance, savings in your bank account can be a blessing for the future.