The unemployment levels at their peak, the sulking appetite for loans across industries as well as individuals are defining of a crisis that is very imminent. Even the stock market that is a barometer of the economies' health is going through heavy volatility and even good names across sectors have sunk to their 52-week lows and no one really knows where the bottom is.
Furthermore, the GDP which precisely narrates the whole story is likely to be dim even more as experts see the numbers come at 5.5%, which is even lower than GDP levels for the earlier reported quarter wherein it came at 5.8%.
So what should be your likely strategy to protect your finances it shall be the concern in this story:
1. Diversification is the mantra here: While global slowdown is imminent, nonetheless the crisis at your own end can be averted by heading on to safe bets such as gold and even such funds which may be able to compensate for losses if any in the home market, such as US based funds. With the investment in equity backed funds in the US you will be able to tide over uncertainties in the home market as well as be able to avoid currency risk.
2. Emergency fund: While you cannot tell of these uncertain times certainly, what surely is the case is recession is looming all through and India too is reeling under its pressure. And to get over this crisis swiftly, we always suggest you to keep 6 months of your expenses if say its Rs. 30,000 per month than atleast have between Rs. 1 lakh - Rs. 2 lakh handy i.e. can be maintained in either banks savings account or liquid fund as per your risk appetite and know how on the product.
3. Avoid spending unless you really need to : The time is such that you do not need to splurge on small mood-based goods and neither make big ticket purchases. Small savings can go a big way and help you tremendously ratchet up for your savings to meet any unseen situation. So be wise and don't give in to membership from an array of online portals who flout these products to give you a good deal etc. Also, as in the case of smartphones and auto, you can opt for the refurbished one which also provides similar warranty.
4. Job hopping is not recommended at this hour: Only if you are damn sure of your skills and are thinking of a move in your career, we suggest you to first find the suitable job and then give your resignation in the current job. As without following such course, you do not really know how long will it take to land a matching job. Also, some of the companies have even warned of a crisis with likely layoffs and in case your company is delaying your salary then surely there is some issue with the company's financials, and it's a red flag for you.
5. Be proactive with your debt repayment: You never can be sure how the crisis can affect you, and if have taken on to financing some of your assets, the path can be even more tough for you. Nonetheless banks in genuine circumstances come to your rescue and can help by extending the loan term, but you need to be really convincing and make on the payment as and when the cloud of a crisis fade away.
6. Put off your plan to purchase or sale your property:As an investment, buying a property at this stage in time when slowdown concern loom largely, there is not much sense as the property in a span of say 3-4 years will only provide nominal return of 3-4%. But if you intend investing it to live in i.e. for your own housing needs, you will be able to crack a good deal with steep discount.