Recession in 2008-09 in India – it's finally arrived, and by the looks of it, is here to stay for some time. The economic slowdown in the country has brought, in its wake, not just an all time low in the stock market, with sky rocketing costs of everyday necessities such as groceries and personal care, but worst yet, layoffs and job freezes across the country in almost every other company. The question that now arises is, how to insure oneself from the whirlwinds of our present day economic crests and troughs. The answer? Be prepared!
Taking into consideration the erratic trend of layoffs across companies in India, one is required to be on one’s feet and prepare yourself for whatever comes your way. For someone who has been given the pink slip by their company, worry not! If you have set aside a financial backup for emergency situations, such as this, be assured. If not, be smart and begin planning your finances right away.
The first and foremost thing to keep in mind is not to lose hope. It is trying times such as these that test your abilities to see through tough situations and bounce back. "The first step towards resolving such an issue is to deal with the emotional trauma of having lost a job. Let the person talk about it, and vent out his feelings. The next thing to do is to identify a goal and working towards achieving it, step by step. This can be done merely through conversations without having to venture any advice. That done, gradually, try to build and instill self confidence in the person. Make them believe that he or she has what it takes to be successful. Family can be of enormous help in such cases, extending moral support is of utmost importance." says Dr Hiral Goradia, a psychologist working with KIMS, Hyderabad.
The immediate activity at hand is to determine your expenses during those six months, be it travelling, kids, electricity bills, water bills, clothes, house rent, groceries or loan payments. The safest way to adopt would be to plan the next six months in advance too. As far as possible, do not touch long term investments. Also, any ongoing investment plans should be kept on hold till the time that you find a regular source of income again. For the time being, concentrate on covering your future expenses and continue investment s once you take on a new job. Needless to say, minimize frivolous expenditures as much as possible. You can liquidate investments in money market funds. You may also want to consider switching some equity investments to debt to ensure a regularized flow of interest income. Mr. Mohit Khanna, a Delhi based certified financial planner says "The person should keep surplus cash at hand in case of unexpected situations such as a job loss. Whether you are employed or not, only 25% of your savings should be used for trading in the stock market, at any given time. Given the present scenario and the unpredictability of stock market, one should gauge their risk horizons and be clear about the risks and the corresponding returns. Another solid choice is gold; it's one of the most stable assets, especially during an economic crisis, however, not more than 20% of your savings should be invested in gold, if at all. This is because gold is a very slow moving asset and the prices rise mostly only during an economic crisis."
This base covered, you can begin your job search as soon as possible. Statistics show that the average person who loses his or her job spends six months looking for a new one. At a time when most companies have frozen recruitment, it may take considerable time before you land your next pay cheque. Ask recruitment head of Infospace Consultancy Pvt Ltd, a Mumbai based consultancy firm, Mr Rajesh Singhani, who says "Companies these days prefer hiring graduates or post graduates since they prefer people who can be molded as per the requirement of the profile, as against an experienced person. This is also because an experienced person would demand a higher salary as well as designation, which is not the case as far as a fresher is considered." In such a situation, one should be ready to settle for a lower salary or designation as compared to the earlier pay cheque. Keep your resume up to date and use your networking skills to float your resume in as many organizations as possible through friends and acquaintances.
No matter how grim a situation may seem, it may be a blessing in disguise. On a lighter note, you may want to use the available time on your hands to engage yourself in a more productive manner. For instance, if you are qualified enough you could take up a part time job in an NGO. Take up a job, paid or unpaid. If you are someone who enjoys writing, consider freelancing for magazines or local newspapers or online writing. If you have the talent, you can even get paid to do what you enjoy! You can also find out if there are local organizations that cater to taking care of lesser privileged children, providing them food, shelter or in most cases, a little quality time just talking to them. You can volunteer to tutor them, or simply to teach them how to paint or dance. You would be surprised at how great it feels. If you are adept at drawing, you can try your hand at cartoon strips and sending them to local newspapers. Apart from all this, spend some quality time with your family; it's probably the time you will never get back!
Another option that some may want to consider is to switch careers entirely. For instance, you may be an engineering graduate but always wanted to work in a place that would allow you to use your creative talents such as painting or writing, like an advertisement firm. What you need to keep in mind is that venturing into a new line of career has its own setbacks. For starters, you may not get paid as well as your last job, but if it is job satisfaction that you are looking for, you are headed in the right direction. Jobs such as teaching in primary schools only require you to be a graduate and not necessarily have experience in the relevant field. Also, before you decide to switch careers, you need to ensure that you have sufficient funds at hand, or you should be prepared to take an education loan. The only time it makes sense to take a loan is when the only other option is to withdraw money from investments that earn more than the rate of interest on the loan. The important thing to remember is that every choice will have its pros and cons, and that you would be required to weigh both and make an informed decision and only then, go ahead.
All said and done, the market conditions are bound to improve in due course of time and things will definitely start to look up. In a nutshell, be prepared for the worst, be optimistic and expect the best, and last but not the least, be constantly, in the pursuit of happiness.
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