Face it. The last decade has seen three economic aspects of your life change beyond all recognition: earning, spending and investing. The Indian economy has become more dynamic, and you, as a consumer, have been the biggest beneficiary. But you have to pay the price in terms of uncertainty on other variables.

Back in the good old days, earning, spending and investing were very clearly defined. Get into a PSU or any big private company, and you had it made for life. Jobs were 'till retirement do us apart'. The salary was low, but so was the cost of a ho-hum life. You could settle down to a comfortable routine, and look forward to the customary wristwatch you'd get on retirement; and remember, an HMT watch was a prized possession that mps had the privilege of allotting out of turn. And you could even draw a pension, in most cases, to back up your lifelong savings in LIC, PPF, UTI schemes and fixed deposits. Equities? What's that?

Nostalgia Warning

How quaint those days seem now, don't they? Something from a dusty old novel, with the protagonist riddled with varied forms of angst that had nothing to do with money. Alas, we've outgrown that. These days, nobody has the luxury of not thinking about money. Make that worrying about money. Job insecurity, credit card bills, a flagging stock market, sinking interest rates (on everything except credit card outstandings) and what have you, it almost makes you nostalgic for those sleepy days of ho-hum existence.

Notalgia, be warned, is best left to novelists (and even they, unless they sell a million copies, can't hope to live off their royalties). What does a realist like you do? Get cracking, what else. And this begins with the appreciation of something the old system never provided: choice.

Survival Kit

Exercise your choices consciously. On spending, never let lifestyle bills exceed 15 per cent of your income. The money is better spent investing in yourself-in your own earning capacity. Keep upgrading your skills, and keep the old boys network well oiled. Remember, even good businesses go bust, and joblessness is no longer something that afflicts wrongdoers. So, beyond your own retirement savings, keep a reserve to last you at least six months jobless.

The contingency reserve is best kept liquid. Your long-term investment portfolio requires the assessment of a much wider set of choices. Equity? Debt? Gold? Mutual funds? A diversified combination? Be clear about the risks involved, and your own risk-bearing capacity, before you allocate your funds. And even after that, it's best to keep reviewing the choice of investments. Mutual fund performance keeps changing, especially these days. Debt-based funds have seen a reversal of fortunes, of late, now that interest rates are bottoming out.

Not only that, broad economic conditions keep shifting as well. It's advisable to keep yourself engaged with all investment related goings-on, and to keep an ear out for what the managers of your MFs are saying. Fund managers realise that they need to keep retail credibility, and must vie for your opinion.

More Choices

Luckily, investment choices are still expanding. Recent moves have enabled resident Indians to keep a fraction of their money in dollars or euros. Real estate is an investment zone that has also become active, of late.

Home loans are more sensible now than they used to be. Rates are down sharply, and if you can restructure your old high-cost loan so that you pay less, nothing like it. There are also floating rate loans available. Keep yourself armed with your options.

Times may be much harder than you remember. But then, the very prospect of choice should reassure you that it needn't be harder on you, financially, if you think harder about your options.