Being financially resilient is being able to be strong financially no matter what life events may happen to you without impacting your income or assets. Achieving this is possible with a few practical steps that can help keep you prepared.
While every person's situation is different to the next, our handy tips can get you started on paving your way to becoming financially resilient.
Before We Begin
This is a general guideline that we have put together to help you start your journey of financially planning your future and should not be taken as financial advice. Although these points are great starting points, speaking to a financial planner will make finding the right fit easier for you.
Invest in Long-Term Goals
Financial goals are crucial. Setting long-term financial goals form part of financial planning and becoming financially resilient, which means you will need things that can help you plan ahead. Have goals that focus on things such as retirement, becoming unemployed, becoming disabled, falling ill and death. Make sure that you have realistic and measurable goals to keep you going. It can seem overwhelming at first which is why speaking to a professional can help. You can also start with the basics with these covers.
Have an Emergency Fund
A common mistake is to think that an emergency saving fund is the same as savings. An emergency savings fund is different in the sense that this is purely set up to help you deal with emergency expenses that pop up instead of saving towards something. It is created to help you stay afloat even when big expenses pop up unexpectedly. It is also a savvy way to avoid falling into debt when faced with an emergency.
Reduce Debt
There is good debt and there is bad debt. Taking on bad debt can easily become the final straw that breaks most people financially when tough times come. Aim to reduce debt when things are going good financially to give you breathing room when the going gets tough. Consistency is key with debt, no matter how much you contribute each month to help reduce your debt, it will play a part in the long run.
Avoid Comparing Yourself
Your financial situation is not the same as the next person, even if you are earning within the same tax bracket. Find what works for you. Speaking to a financial advisor can also help you map out a path that is sustainable for your growth. Remember that there are no quick fixes when it comes to building something that will last.
Skip Making Major Financial Decisions When Stressed
Being financially resilient also means knowing when to take a step back and cutting back where necessary to keep you going. It is normal to be stressed now and again about our financial situation but making a financial decision when we are stressed can lead to bigger problems. Speaking to a financial planner can help you shift things around without placing further strain on you financially. It will also help you from making decisions that push you into the red.
