These are tough times and we are still being buffeted by the ill winds of the continuing global meltdown. Experts predict that the slowdown will last through the first half of 2009 in India, after which a slow revival will begin. As and when that happens, a lot will need to be done to adjust to the new circumstances.

When there is a boom, there is always a crash around the corner

These things happen to correct the balance in the financial system. It is a cycle. When there is a boom, there is always a crash around the corner.

Real estate prices became skyscrapers by themselves and the inevitable, a stabilization and correction of prices was bound to follow.

People whose lives have seen more than one recession have come to terms with it and have included it in their planning. It is best to go back to basics and plan ahead for it, but now that we are right in the middle of it, here some tips to help you cope with it.

Distribute your funds

Never hold your investments in a large chunk in very few areas. A good investment portfolio should be a mix of investment in different risk categories that provide good returns.

A high-risk investment should also yield high windfall returns over the long term. Hence, it is important to have a balanced fund distribution. For example, a good mixed portfolio could have investments in gold, public Provident Fund, stocks,  fixed deposits, real estate, et cetera.

Shelve your credit cards

Refrain from using your credit cards and stay out of debt. Spend less than you earn and you will find you have a surplus of funds to tap into when an emergency creeps up.

Set your mind frame to re-use, recycle, repair and conserve

Learn to distinguish between wants and needs. Avoid indulging in luxuries and stick to basic comforts. If anything can be re-used do so, recycle paper and repair things that you use on a day to day basis instead of replacing them.

Here are some small lifestyle changes you can adapt to conserve:

Save on power

• Don't have the computer, the music system and the TV on all at once
• Run air-conditioning only till the room cools sufficiently in a closed room
• Switch off monitors during work breaks
• Switch off power sources in rooms that are not in use
• Raise the temperature of the refrigerator when too many things are not stacked
• Run the water heater just before it is required
• Set an alarm to switch off the motor, gas, etc. when in use to prevent waste of power and resources.

Cut down fuel costs

• Walk or use a bicycle, if you have one handy to nearby shops or places you need to visit
• If you are a couple, make trips together whenever possible, for either commuting to work or visiting areas near each other
• Take a bus or use a two-wheeler for a few days in a week, instead of a four-wheeler
• Set up a gas provision unit for your four-wheeler if it is feasible and makes economic sense

. . . you get the picture. Try this in every aspect of your lifestyle, you will find a significant change in the way you manage your resources and the expenses that go for your utilities.

Review your finances and start budgeting

Take stock of your finances, how they are invested, where they are invested, can they be liquidated in case of emergencies like a jobloss, how to start saving with the existing resources for such an emergency, which areas can be focused on possible cost cutting, etc.

Learn new skills

Take stock of your current career status and work towards upgrading your skills. Learn something relevant and new on your work front. Also, have some contingency plan to bank on, if things don't go as planned in your current assignment. It is good to be prepared for surprises.

Remember to hang in there!

As far as your stocks go, if they are in pretty bad shape, don't jump the gun and sell them off at the first possible instance. Statistics and experts suggest that to really reap the benefits of investing in stocks you need to stay invested for a long time, to the tune of 10-15 years.

Recession is not something that will last forever. The tide is bound to turn and the cycle will continue. So just be patient and wait for the good times. You could also buy low in quality stocks that might do well in the long run. Also, give a thought to future trends and choose your options strategically!

The author is Head of Content & Research at BankBazaar.com

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