Tips that will come in handy even if the economy remains stable.
Higher School of Economics experts predicts the possible timing of the new crisis in Russia. A new crisis in the economy is possible not earlier than in 1.5–2 years. The escalation of the trade war between the United States and China could lead to this. However, no one has any confidence that a crisis will occur. They speak with caution about its scale.
In 2009, the Russian GDP fell by 7.8%. In 2019 it was projected to grow. Economists downgraded the GDP growth forecast for 2019by to 1.2%, so the situation does not look hopeless. However, the Rosstat reported an increase in families with enough food and clothing the share of families who only have enough for food and clothing: now they are 49.4%.
It is impossible to prepare for a real crisis. It is an unexpected dangerous situation that confuses people and causes panic. What we are seeing now is a prolonged depression in world markets, which affects everything: demand and production levels, price inflation in different countries, wages, reduced benefits, and so on.
Natalya Belova, director of market management, IC “Rosgosstrakh Life”
But good behavior will help you minimize the damage if the financial crisis breaks out.
Do not panic
It is too early to do this now, but it is too late during the crisis. Panic will not help, but it can harm. There have already been cases when people, giving in to rumors, bought buckwheat as stock for 10 years. Their wealthier compatriots sent the central Bank urged citizens not to buy TVs because of televisions and microwaves’ savings. They tried to sell them at a significant discount to get at least some of the money back.
Buying something for the future is generally a bad strategy. Prices for different product groups can change in surprising ways. It would be more correct to devote all your strength to the accumulation and preservation of money.
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Pay off debts
On ordinary days, debts, loans, mortgages are unpleasant but not very scary phenomena. If you have calculated everything in advance, the monthly payment will not be overwhelming and organically fit into the expenses. However, the crisis can change everything, and the payment of the loan will hurt the impoverished budget. In turn, this will lead to showdowns with banks, communication with collectors, and, possibly, loss of an apartment or part of the property.
So it’s in your best interest to focus on paying off all debt ahead of schedule and be more careful about creating new ones.
In times of crisis, it is borrowers who often become the most affected party. Suffice it to recall the “foreign exchange mortgages”: when the ruble fell, people lost the opportunity to pay for apartments, because payments linked to the exchange rate increased significantly. Before taking a loan, you should carefully weigh everything. How will you pay it? What if your financial situation as a borrower deteriorates?
Ivan Rykov, founder of Rykov Group, analyst of debt markets
Solve health problems
As long as income allows, go through a full medical examination and take care of the identified diseases’ treatment. Some ailments may not be of much concern right now. But this will not always be so – without the intervention of doctors. As a result, you will not be able to effectively earn in a crisis, and there will be nowhere to take money for treatment.
Consider dental health separately. It is always costly to treat them. That is why a snow-white beautiful smile speaks of a person’s status more than branded bags and expensive cars. There is a risk that there will be no money for a dentist during a crisis, so it is better to deal with this right away.
Even if the economy does not collapse, health care will still be beneficial.
Work on savings
Lack of savings is a big problem, even if the outbreak is not a global one, but yours. Savings will help you get through a difficult period. There is no intrigue in how to create them: earn more, spend less.
Saving money amid the financial crisis is as difficult a task as saving it.
Looking at a retrospective of the crises of 2008 and 2014, we can distinguish two investment instruments that allowed the discerning citizens of the Russian Federation not only to save their money, but also to increase it. We are talking about currency and gold. Moreover, in an era of prosperity, these instruments do not bring income, but rather protect the invested funds from inflation, but in an era of turmoil, they are traditionally a “safe haven” for investors.
Igor Fainman, Financial Advisor
As far as currency is concerned, it is better not to bet on anyone. The most common advice is to divide the savings into three parts, exchange one for euros, the other for dollars, and leave the third in rubles. So, no matter what happens in the financial market, fluctuations will be compensated, and the purchasing power of money will remain.
Gold is more difficult. Modern and relatively inexpensive jewelry cannot definitely be classified as an investment because of the extra charge for a jeweler’s work. They are unlikely to rise in price.
Become a highly valued employee
During the crisis, some companies close, others cut their staff. It’s impossible to predict in advance which category yours will fall into. Moreover, if it comes to reducing the number of employees, they will get rid of the least useful ones. Excellent workers will be kept to the last.
Your task is to become one of such valuable employees. The main condition is adequate leadership. If you’re unlucky with your boss, your efforts may be in vain. And this is not so difficult to do.
- Do your job well.
- Be proactive and independent.
- Plan your actions two steps ahead to avoid stupid mistakes.
- Don’t gossip or scandal for no reason.
- Develop constantly.
- Be disciplined.
The most obvious way to mitigate the risks of cut or cut wages is to achieve outstanding results, not to be afraid of expanding the functional area. In this case, even in the worst-case scenario, when the activities of the entire company are called into question, it will be much easier to get a new job.
Andrey Barhota, Strategic Marketing Manager at PSB
Get a new profession.
It is not difficult to answer who will be more in demand during the crisis years; stylists or welders. There are professions, the need for which will certainly decrease along with the population’s financial well-being level.
Also read: 3 Financial Lessons Everyone Must Learn
On the one hand, people with simple, understandable, and always necessary skills will benefit, for example, locksmiths, hairdressers (not to be confused with expensive barbers), etc. On the other hand, those who can meet the current market needs.
The guarantee of future demand in the labor market is training. The main trend for the next 10 years is an avalanche demand for various digital specialists. By 2030, Europe alone will have a shortage of 50 million people with IT professions. Therefore, any IT skills today is a guarantee of being in demand in the future.
Look for additional income.
It’s dangerous to bet everything on one company, even a very profitable one. Do not avoid part-time jobs if you can afford them, and your contract does not prohibit it. Thus, you kill a bunch of birds with one stone.
- Earn more money and increase your savings.
- Try yourself in slightly different conditions. Even communicating with new people who are not familiar with your work takes you out of your comfort zone and develops your competencies.
- Make new contacts. People for whom you do some work may take you to their place in the future.
Do not overdo it with savings.
It remains to be seen whether the crisis will come or not. You don’t need to discount it, but it is important not to overdo it with preparation for it. Let’s say that the results of treatment, training, and savings will be useful to you in any case. But you shouldn’t devote your whole life to preparing for the financial apocalypse. Otherwise, you will be similar to the character of the movie “Blast from the Past,” where the main character spent 35 years in a bomb shelter just because his family was afraid of a nuclear strike. In the end, nothing happened, and the man lost years.
Adapted and translated by The Cop Cart Staff
Sources: Life hacker