Hyderabad:With global recession likely to hit sooner or later, it is expected to cast its impact on all countries, companies and individuals. The resultant financial difficulties may lead to retrenchment and job loss in most countries. India is not exempt from this impending crisis. What should we do to get financially ready to absorb shocks like unexpected unemployment?
India is getting ready to absorb the shocks of economic crisis. Still, our country cannot escape from total impact when the rest of the world is in financial turmoil. In the last few quarters, inflation has gone up steeply. Rises and falls are also seen in stock market. Many lost their jobs, according to reports. Confusion sets in when one suddenly loses employment. It is natural to become anxious. Instead of worrying about such an unavoidable predicament, we should plan thoroughly and get ready to face such a future situation much in advance.
Firstly, everyone should begin focusing on savings right from the start of their earnings. We should have at our disposal money enough to meet three to six months expenses and EMIs (equated monthly instalments). For this, 25 percent of our salary should be put in recurring deposit scheme. By doing so, we can save three times our salary in 12 months.
Also Read:India unlikely to be hit as hard by global recession as other countries: SBI chairman
Any contingency fund should be diverted to fixed deposit but not savings account. Once out of job, we should withdraw some amount each month, considering it as salary. This should be used only for essentials, house rent and EMIs.
One has to incur debts when there is no monthly income. As far as possible, they should adjust with available funds. If retrenchment starts in your sector of employment, it is better to play safe and stop using credit card. Stay away from needless expenditure. Once we lose our job, we should stay away from credit card for the maximum possible extent as there will be difficulties in paying bills in time. Irregular payments will reflect badly on our credit history.
Lot of discrimination is needed to restrict expenses in times of financial difficulty. Find out how much impact needless expenses are leaving on your budget. Alternatives will be there for everything. It is preferable to stay away from buying expensive appliances and going to costly hotels. We have to relinquish some of our desires. Such actions will help increase our surplus.
Also Read:Recession unlikely to hit India due to 'not so coupled' nature with global economy: S&P
It is very important to take a separate health policy on their own despite being covered in existing company's group insurance. If job is lost, the benefits of group cover go away. Any illness during job loss will lead to severe financial problems. All the savings will go towards medical costs. Once out of employment, we should not withdraw provident fund (PF) and equity. First, we should use our contingency funds.
