How the recession can hit you, and how to prepare for it?

Posted by on Sep 22, 2012 in Finance, Jobs & Career, Self-help | 0 comments

In 1997-1999, there was a global recession that most of the people my age would not remember. We were still students then. So we didn’t care much, but our parents did.

About a decade later, 2007-2009, another global recession hit us. This time, some of us experienced it first hand. I did. I was forced to take 2 days of unpaid leave per week…which means 35-40% pay cut. It was difficult as I was barely able to survive. Still, I was more fortunate than few of my friends who lost their jobs completely and were unable to find a new job. But these few friends of mine, and myself, we were but a small group of Malaysians who have experienced the impact of a global recession.

Fortunately (or unfortunately?), Malaysia was not that heavily hit by the recession. So, most people still do not know the desperation that someone who is jobless can experience. To them, their jobs are safe, and they have the mindset “I won’t be affected by the recession”, or “Malaysia is safe from global recession”, or “My company cannot survive without me”.

And because of that, most people do not have any form of backup plan (surprised?). They have no contingency plan…no emergency fund…no proper skills which will make them highly sought after in the job market, etc. All they have is optimism that they will not lose their jobs, and the recession will not affect them.

Sad to say, recession WILL hit them whether they like it or not. It’s just a matter of WHEN and HOW. So if you are one of those optimistic people, perhaps the things below will help you.

How the recession might hit you:

  • The prices of your daily needs go up. You need more money than usual to stay alive.
  • Your customers stop buying products or services from you.
  • Your multinational company decides to move the whole operation to a cheaper location, outside of the country.
  • Your local company starts to lose customers and might be forced to close down.
  • Your CEO decides to take the money and run, forcing the company to close down.
  • Your spouse loses his/her job. Now you alone have to feed the whole family.
  • Your income is reduced, and you do not have enough money to pay off the monthly debts.
  • and the worst…you forgot you are jobless…and you are spending money like you are not!

So, before any of the above happens, what can you do to prepare yourself for recession?

  • Prepare an emergency fund and put them in FD. Preferably 6 months of pay. So that you can survive for 6 months without a job. And don’t put your emergency fund in stocks, mutual funds, or any risky investment types. Just put them in FD. You might need them sooner than you expected. And you won’t want to sell off your stocks at a loss.
  • Skill up! Make sure your skills are not obsolete. Attend courses, take up additional certs or learn a new skill yourself. These skills might prove to be valuable and might even help you fight off the competition if you were to find a new job during recession period.
  • Be more proactive in your job. Take up tasks willingly especially if there are big projects involved. Prove yourself valuable to the company so that if there’s a plan to reduce headcount, you won’t be the first on the list.
  • Learn more DIY stuff. So that in case something breaks and needs fixing, you know how to do it instead of paying people to fix it. I myself is pretty bad in this, but it’s something worth learning. You won’t want to have a leaking roof but not enough money to fix it.
  • Don’t simply quit your job just because you’re frustrated, angry or disappointed. Think and plan properly before you make any quick decision.
  • Ensure you have sufficient insurance coverage. This is not just for yourself, but for your loved ones as well. Just in case something bad happens to you or any of your assets (houses, cars, etc), you still have insurance coverage to help you and your loved ones out.
  • Avoid over-indulging in lifestyle items. If you want, make sure you can afford them and by saying that, I don’t mean paying the bill via installment or flexi-payment. If you plan to buy a 5k item, pay it off at one go. It’s easier for you to estimate your budget that well. True, 5k if divided by 12 months, is only around $400+ per month. Not much. But if you are jobless, that $400 can mean a whole lot more.
  • Always be mentally prepared that the recession might hit you and your family…hard.

Some of you might think that I’m a bit paranoid when it comes to recession and stuff. But trust me, being overly-prepared is better than not preparing for it at all. Because at the end of the day, those 5 things above will help you in one way or another even if there’s no recession….even though I hardly doubt so.

So, if you have not already done so, maybe it’s a good time to start preparing yourself for it.

All the best and hope this article helps. :)

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Don’t quit your job

Posted by on Sep 9, 2012 in Jobs & Career, Self-help | 0 comments

Becoming tired of your job? Or feeling your life has been turned upside down by your over-demanding boss? Feels that it’s actually better to quit and take a break, even if you have yet to find another job? After all, life is not all about money and work. Life is short and you have the rights to enjoy! So go ahead and quit !

Don’t do that.

Some of my friends have walked down that path before, and most of them did not end up well. I understand that life is not about work stress….and definitely not about getting upset with your job. We all want and need to lead our life happily. But if we quit our job without thinking twice, we might end up on the receiving end of all the bad things – jobless, unable to pay loans, unable to support family, low self-confidence, getting our family worried, and the worst…jumping head first into a deeper shit (worse job) just because you are starting to get desperate.

Don’t believe? Now, let’s imagine you have been jobless for 6 months, and you are attending an interview now. Here are 2 possible scenarios that you might encounter:

Scenario 1

Interviewer : Why isn’t there any job experience stated in your CV since your last job 6 months ago?

You : I was not working.

Interviewer : Why? What were you doing then?

You: I went to attend some classes/courses/education, etc.

Interviewer : Do you have any cert to prove that?

The above will be okay if you have something to prove. If you do, you have nothing much to fear. And to be honest, this is the ONLY reason why someone should quit his job without finding another job (besides medical reasons which must be supported by the doctor’s letter). Anything other than this, will not be good.

Scenario 2

Interviewer : What were you doing in the past 6 months without any form of income?

You : I went to vacation in Australia.

Interviewer : Hmm, so you can go for a vacation and survived 6 months without income.

Or

Scenario 3

Interviewer : What were you doing in the past 6 months without any form of income? Did you go to vacation or something?

You : No, I couldn’t find a job.

Interviewer : Why?

You : I don’t know. Maybe there’s no suitable job?

 

In above cases, the interviewer might still offer you the job if your experience matches, but do not expect your salary to be competitive due to few things:

  • He assumes that you are quite rich, since you already can survive 6 months without pay and was not desperate for any income.
  • Your skillset might be a bit outdated due to being away from the industry for 6 months.
  • Or the interviewer might realize that…now that you are back and 6 months without pay…you should be desperate for a job. If that’s the case, you might be willing to work at a minimal pay.

Or he might not hire you at all based on few assumptions:

  • You might just quit your current job to go off for another round of 6 months vacation sometime soon.
  • Maybe you are just one of those people who do not have a good working attitude since you recklessly quit your job without thinking about your income.
  • You could be asking too much from a company. A perfectionist. Perhaps this was why you couldn’t find a suitable job in the past 6 months. In other words, you are a difficult employee to please.
  • And worst of all, you might be regarded as someone who will not be “professional” in his job. An irresponsible employee. A quitter.

No matter how you look at it….quitting your job before you found another job brings more harm than good. You should always have a form of backup plan before you make a big decision such as this. Think about your commitments, your family, and how would you survive without income. And if you can’t do that, then at the very least, think of how you can talk your way out from your next interview so that the interviewer will not low-ball your salary.

Hope this helps.

 

 

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