3 Ways to Build Financial Resilience
Control is but an illusion. Many of us fear uncertainty, we try to prepare for all scenarios in life even though we know that’s impossible. Illness, retrenchment and accidents are all out of our control. We cannot avoid their occurrences, but can only be ready to respond when they occur. Financial resilience is the ability to withstand all these events, knowing you have a choice and do not have to settle in passive acceptance. Your well-being is not compromised.
When bad things happen, financial stability helps cushion the impact of the event. However, there is a limit as to how much money can help. Some of us crumble emotionally in the face of stressful situations while others rise up and amaze even themselves with how they pull through.
I had a friend who was retrenched a year back. Although she immediately applied for new employment opportunities, nothing worked out. Yet, her sense of identity was not shaken. Rather, she viewed this occurrence as a time-out to consider what she has accomplished so far in her career, took clarity on her preferences for the way ahead and even experimented with side-projects that she always wanted to try.
It later emerged in our conversations that her resilience in this period was attributed to two main reasons – having family support (financially & emotionally) and being intentional. She knew her runway on how long she could afford not to have an income, which enabled her to choose a job she wanted, rather than blindly settling for the first that came. She was also very selective about who she connected with during that time, meeting only people who were mindful about not asking her questions that added to her stress even if they meant well.
Financial resilience is defined as the ability to withstand life events that impact one’s income and/or assets. How ready are you in this aspect?
Here are 3 ways you can build your financial resilience:
1) Ensuring Well-Being Through Self-Awareness
At the center of your being, you have the answer; you know who you are and you know what you want.’ ~ Lao Tzu
I believe that we know ourselves, our needs, desires and dreams best. Sometimes, this is clouded by what we feel we ‘should’ and ‘must’ do, and so we settle. Take time out in your daily journey to reflect on where you are, where you are headed to and where you like to be. Train yourself to be more aware of how you are feeling, thinking and behaving. Get flexible in your socio-emotional being, being able to replace negativity with positivity in all circumstances. Build mental resilience. here’s an article on how you can get started.
2) Be Prepared
Similar to how nations prepare for disasters by having exercises, you can stress-test your finances to see if they can withstand life events such as illness, retrenchment and accidents. How long can you go without having an income and still live comfortably? If you had to cut expenses, where could you reduce consumption? Build confidence in your ability to handle life’s rainy seasons. For more information, check this out.
3) Fortifying the Community
As mentioned in our article on running your own race, we are stronger together. Do you have neighbours, family or friends who you could rely on to help you in times of need? I have been blessed financially and emotionally by friends tremendously. A friend showed support for what I was doing, donating financially even when she was not working. That communicated great faith in me to persist when the going got tough.
It works both ways though. Being in a community is not just about taking, but also being there to bail out others when they need you. Who is your tribe? How future-ready are you?