How to survive the economic crisis
Anyone who hasn’t realized that the world is in a financial crisis must be living under a rock. Day in and day out, we hear stories about companies going bankrupt or closing shop, and employees getting laid off. If you’re a little bit lucky, your company may have just suspended giving out incentives and bonuses, or implemented a “freeze hiring” to keep everyone afloat.
Whether your head is on the chopping block or not, it is best that you and your family are prepared for the worst. These are very difficult times and you must make drastic moves to keep you afloat.
1. Make yourself indispensable.
Yes, I have heard of the cliche “no man is indispensable” and this is truer now more than ever. But to increase the possibility of you keeping your job, you need to step up and make yourself so important to your organization that management will think twice of terminating you. If it means being the first person to arrive in your office and the last person to leave, do so. Do an excellent job and make sure your boss knows it.
My brother, who works in HP, saw two people from his department got laid off. Although he is on a consultancy basis, he was fortunate that he wasn’t the first person to be removed. And thankfully, because he is quite smart and hardworking, he just took on the jobs of the two people laid off. Yes, it means more work for him but he can breathe a little easier that he still has a steady source of income.
2. Talk to your family.
Call a family meeting and lay the cards on the table. Stop sugarcoating (parents are always guilty of this) and tell the truth. If your job is in danger or money is tighter, let them know. Make them understand where you are coming from and where the family stands. That way, expectations are managed.
3. Make a family commitment and cut the fat.
Once your family has fully understand your financial situation, it’s time for unity and action. List down all your monthly expenses and identify which ones are “needs” and which ones are “wants.” Be honest when doing this because you might be tempted to say that you “need” a pack of cigarettes a day or your wife “needs” her weekly spa.
Once you have identified your needs and wants, decide which “wants” should be eliminated or reduced immediately. Instead of your weekly manicure/spa appointment, make it once a month. Ditch your daily Starbucks treat. Enforce once-a-month downloading of PSP games. You need to make drastic changes to ensure that you stay afloat.
4. Beef up your emergency fund.
If you still don’t have an emergency fund, shame on you! The best time to start an emergency fund is when everything is going well. If you have delayed doing this, it’s best to start today. While you are still earning a salary, save every peso that you possibly can and save it for the rainy day. Suze Orman strongly recommends that you must have at least eight to 12 months of emergency fund to keep you afloat in case the worst happens (see related story).
If you already have an emergency fund, revisit it and see if you need to beef it up. Add more to your fund so that you have a nice financial cushion in case of emergency. Transfer some of your money in a high-yield time deposit account like PSBank (see related story) or Chinabank (see related story). You need your money to be safe, sound and, at the same time, easily accessible.
5. Make more money.
Go through all your stuff and see which ones are still sellable but usable. Hold a garage sale or sell them online (see related story). Any money you make should be socked away and saved for a rainy day. Remember that one man’s trash is another man’s treasure.
If you can take on other jobs like blogging, freelance writing, reselling, that’s equally fine.