The Great Depressions, by far was the biggest economic downturn of the 21st century. Jobs were gone overnight. Banks ruined. Companies became bankrupt. Stock market plunged. Entire economic system paralyzed. Life for many was never the same.
The aftermath of the Depression in 1930 was that people stopped trusting the bank and started saving money for the future. Then the economy again picked up. The industry was at once rewarding, innovative, and frustrating. Then the recession again struck the market. A situation like this floods your mind with questions like: Is your industry strong enough to emerge from recession? Will your company be able to make up for the losses? Is your job recession proof and should you stick on to it?
Every cloud has a silver lining. Even in gloom and doom people and organizations are finding their way out. As the market is recovering from recession we are seeing a sea of change in the financial psychology worldwide. People are saving and keeping a close watch on the market. Many became risk-averse and are refusing debt.
The worst times are the best teachers and teach us things in the oddest of ways. Take advantage of this tough experience. Now is the time to reevaluate your career and the future of your industry, your company, your job, and your skills.
Be frugal and save for tomorrow
This recession has taught everyone to be penny-pinching. Focus is now not on what to buy but how to save. Layoffs has given the idea to people that spending more than they can earn is not smart as everything can be snatched away overnight. If you are lucky enough not to be hit by layoff, yet chances of escaping the pay-cuts was thin. Hence, all these point towards only one thing that saving and spending smartly is wise. This is the high time to realize the importance of living below your means and putting some money in the bank for emergencies.
Acknowledge the power of change
Change is the integral part of business. Modification of policies and compliance are the biggest challenge for any company. Many organizations are realizing that adherence to policies was missing. There were not much loopholes in the policies and procedures but in its compliance. Hence stricter enforcement has become imperative. Moreover, the business model which has made the company successful so far does not guarantee a steady success in future. However this fear should not be so great that the companies go into survival mode. Reassessing policies and business model and improvising on them for a better future is the responsibility of all organization.
People are looking for job opening and willing to change their career. Thus to retain employees organizations has to restructure their HR policies and work on upgrading their skill-sets. Thus when confronted with change a wise person should think about the desired outcome and figure out strategies ways to reach it. Even when a job seeker needs to change in career, lots of research and planning is required. Check out the pros and cons of the new industry and the embrace change.
Take calculated risk
When it comes to money, after recession nobody wants to be a risk taker and is suspicious of any kind of investments. But playing it safe without trying more prospective options is a risk not worth taking. Taking no risk is worse than taking any risk. Instead of hiding from risk it is better to understand and learn to manage them. As the saying goes don’t put all your eggs in one basket, hence, look for additional income-generating opportunities and invest accordingly.
Plan for the road ahead
No point for guessing that poor planning led to the dilapidated financial conditions of many in the recession. With proper planning such situations can be avoided in future. However, when it comes to finance planning people find it hard to seek out assistance. There is no shame in asking for help when you are in need of it. A good planner will educate you about the hazards and rewards involved with investing. But you should also figure out where you are and where you want to be and plan accordingly.
It was all about business
When the economy was staggering, creditors and lenders started showing their true colors. Interest rates were raised and credit limits were reduced. People were shocked to learn that creditors and lenders meant only business and no sympathy was extended. Even people with excellent credit limit were hit and lenders are not extra careful about confirming creditworthiness. Some important lessons learnt here are:
Just because a lender approves your loan doesn’t mean that you can afford to pay it back. You should know your limit and borrow accordingly.
Learn to manage your finances. Keep an eye on your expenses and take responsibility of your expenses and try to pay it off as soon as possible.
Prioritize debt, start from paying off your highest interest rate first.
This too shall pass
Trust me, the nation has seen tough economic times before and has emerged successfully from it. This time too it will survive. The economy will change and will open the door for new opportunities.
In the difficult times, the companies have lowered their budgets and worked within the limited means yet they survived by re-planning and not compromising on the training and development. On the individual level, proper financial and debt management helped many to sail through this recession and avoid crisis. But in such a climate, there is a lot that can be learned. Lessons from past will help anyone to resurface from recession.
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