04 March 2009

Moz's doodle on recession ...

I've been talking to loved ones about the possibility of recession since end 2007 ... the signs were there, and for a while, the powers to be managed to postpone the recession, but now, it looks like it's hit hard, and like a wildfire burning through woods which hadn't had any controlled burn, it's burning harder and more intense than we all can remember.

It's real, it will hit us, it will affect you and me in some ways.

So, before I forget, I forced myself to write about my own plan for handling my finances during a recession ...

# Unlike some of them really lucky people, most of us will have finite resources. Live within your means. And always save up for a rainy day. We all know it'll rain someday, so why wait till it's already pouring before you do something ?

# Keep enough cash to weather your own worst case scenario. If you think the longest you will go without a job or income is 6 months, then save up so that you can pass 6 months comfortably without income. But at all times, have at least enough to live off for 3 months !

# Part of the reason why we're in this mess right now is because of the overuse of credit in the US. Don't let history repeat itself. Use credit card sparingly - it's an unsecured loan - it's like spending money you don't have ! You'll need to pay up eventually ...

# If you have credit card debts, pay up if you can, if you can't, talk to someone who can help you make a plan to clear it all off. Banks are businesses - they don't give you credit card if they don't think they can make money off you !

# If you still need the convenience of plastic, get a debit card. Then you can't spend like there's no tomorrow, because you're depleting your bank account the moment you swipe it !

# Pay off other debts if you have the means to. Having less liabilities is always a good thing!

# Even in good times, you will do well to remember that your health is the single most important thing you have in possession. In the bad times, health is even more important - you can't afford to fall sick, and you can't afford to pay expensive medical bills.

# In good times and in bad, remember your loved ones. They are the reason you work hard. So, don't do stupid things like drive dangerously, drink excessively, or act irresponsibly. You are obliged to live well for them. And most stupid things have expensive consequences too.

# Workout often. In good times and bad, this is your stress reliever. And less stress is a very good thing !

# Buy a medical card or medical insurance. You'll find one handy. And those your company gives you don't count ! Better have one in case the company isn't around, or if they decide to remove your umbrella when it rains (if you know what I mean).

# If you don't need it, don't buy it. And when I said need, that means if your life will no longer function normally, then you need it. That's my definition of need. Expensive shirts, that extra pair of shoe, that designer pen, that new f/2.8 lens, the 2 month trip to Nepal & Tibet, those all don't count as needs. Those are nice to have.

# All food, no matter how heavenly, will enter at one end and leave at the other. Once in your tummy, it doesn't make a whole lot of difference. Eat sensibly, and forgo those expensive places where you will end up paying for the ambiance and also for the waiter who waits exclusively on your table.

# Eat simple food. Enjoy the simple pleasure of just eating. My parents grew up without ever chilling out at a coffee joint charging RM12 for an exotic coffee. And they're just fine - in fact, their generation has less diseases ... no harm going back to boiled veggies and simple stir fry dish. It's ok ..

# We've all got used to traveling to foreign lands with exotic names to get a 'holiday' or a 'break'. Perhaps you can see that Malaysia is a foreign land with an exotic name to many people ... try and go local too ... save some $$$ and help the locals for a change !

# Unless you carry a job title starting with 'Chief', you have very little control over many things in the company, so stop worrying about them, and stop gossiping about them as well. Do your job, do it well, and make yourself useful at work. In a downturn, you'll be surprised how many apple polishers are quickly rooted out.

# Appreciate what you have, and try and see the glass as being half full. It does your mind wonders ...

# If you have money, do your research, and invest. The recession is a good time to pick up some discounted investments ... but do it with a view of the long term. Expect no returns in the immediate future.

# Be flexible, and swallow your pride if you have to. If all 6 billion people on earth have ego just as big as yours, this planet is not big enough for us all !

This list can grow or shrink over time ... this is just a capture of my mind of my own little action plan if I find the big R hit me badly ... anything else anyone wants to add to this ?

** taken from my own FB notes **


pelf said...

I enjoy reading your list, and I found myself nodding as I went down the list. So true, so very true :)

We should all live within our own means. If we can't afford to buy that new watch, don't buy it. If it's too expensive to dine in that restaurant, eat somewhere else.

We don't see it all the time, but it's the little pleasures that make our lives so rich :)

EliteVillain said...

The list is really meaningful ... do you do all these daily? Now is the time I need to learn to live modestly and spend less...sigh... Well luckily i have the insurance, hope I don't have to use it since the amount is limited...