Financial security is a blessing and luxury that only some of us get to enjoy! It is either for people who have worked hard all their lives and got to where they are today or those with the privilege of generational wealth. However, in recent years, it has become more and more evident that every person should have the ability to absorb some financial loss without becoming entirely bankrupt. This realization came from the COVID-19 Pandemic when people lost their jobs and their livelihoods. They had to give up their homes and lifestyles and downgrade their lives. Now that the world is on its way to normalcy, people have realized the significance of financial resilience.
Financial resilience is not about having a lot of savings in the bank, but it is more about being organized and having your finances sorted out so that if you face a financial setback, you can overcome it easily. With that being said, here are some tips for building your financial resilience.
1. Observing Your Financial Standing
Before you make the effort to strengthen yourself financially, you should first examine your current situation. This requires going over your budgets. Now would be a great time to start if you don’t have one. Start reviewing your credit card statements and ensure that all your dues are paid and that there are no standing bills. Lastly, you need to see whether you are checking off all your short-term goals, like an emergency fund or a saving milestone. These reviews can help you determine how well or how bad you are doing financially. It can also help you create a better-suited plan for your financial goals.
2. Redesigning Your Personal Goals
As time moves on, your priorities begin to change. When we are younger, we dream of a lavish house and a fancy car, but when we grow older, we prioritize our mental health and don’t care about having a mansion to our name. This means that after some time, you have to redefine and redesign your financial goals, such as a fund for your mental or physical health. Maybe now you’d want to invest some money into a hobby such as hiking or archery.
3. A New Budget
That’s it! A new budget is exactly what you need. Now that you have made your goals and have determined your financial standing, the final step is to create a new budget that works for you and meets your requirements, such as a mortgage, debt repayment, student loans, or more. In this renewed budget, you can put important things on priority while cutting down on certain things that you no longer require.
These are only a few simple tips that could be greatly beneficial for some while not too helpful for others, and that’s because the journey towards financial resilience is different for everyone. You just have to find what works for you.