Tip 5: Building Financial Resilience

Written by Hamish Ferguson

April 14, 2023

16

Strategies for a Stronger Future

Our focus for today is resilience and how it can help improve every aspect of our life for the better. Resilience is simply one’s ability to withstand any kind of adversity. Over time, we build resilience as we conquer each of the hardships of life, whether it is stress at work, trouble with our finances, or broken relationships.

In this article, we’re going to discuss what resilience truly is. As part of our ‘Unlocking the secrets to lifelong success: Tips from the pros’ series, we will also talk about why and how developing this ability makes for a stronger and more secure future for yourself and your financial future.

What does it mean to be resilient in life?

The word “resilient” or “resilience” is pretty common in the English language. Almost everyone is familiar with what the words mean. But not all of us can paint a picture of what resilience looks like in real life.

We exhibit resilience in different ways. We need to know the behaviours that indicate our resilience to better understand how to build or improve our skills to endure hardship. Here are some examples of resilient behaviours that we commonly show:

  • Committing to a project and seeing it through to the end.
  • Asking for others’ help.
  • Setting goals with realistic expectations.
  • Considering challenges as learning opportunities.
  • Possessing a realistic view of control.
  • Showing patience in difficult situations.
  • Reframing mistakes into something more positive.

This short list gives you an idea of how resilience translates in real life. One key indicator of our resilience is that we bounce back stronger – we become better people, improve our plans, extend help to others, and so on. It’s not always easy to do this, but when we’re resilient, we focus on our end goal and persist.  

The Importance of Building Resilience

Just like any other skill, resilience can be consciously developed. Each of the problems we overcome naturally makes our resiliency stronger. But if we make the process more thoughtful and purposeful, we can benefit more after each adversity. 

If we’re purposeful about building our resilience, we may be able to:

  • Know something new about ourselves after we conquer a problem. We become more aware of our unexpected abilities.
  • Become more flexible and adaptable. Sometimes, we may realise that our initial plan might be ineffective. When consciously working on our resilience, we might take a new course or redo our initial plan to adapt.
  • Have positive and clarified relationships. Recognising and de-prioritising toxic and draining relationships is part of being resilient. And so is fostering the ones that allow us to grow.

Based on studies, having a clear and valued purpose as well as a commitment to purposefully see anything through can greatly strengthen your personal resilience. The more you build your resilience, the better you can handle stress or difficult situations. You can even feel better satisfaction in life and lessen the likelihood of depression and anxiety.

Ways to Build Your Resilience

women building financial resilience, she is holding a credit card with a smile on her face 

Knowing how important resilience is, you’re probably wondering how you will start to develop it. Always start with your mindset. When you encounter problems, it’s best to focus on how you can learn from your mistakes, move forward and not dwell on the negatives.

When you already have this in mind, you can focus on the following ways that help you consciously build your resilience:

  • Find a purpose or a meaning to your day: it will give you direction and something to aim for. Your purpose doesn’t have to just be for a day, either. You can make both long-term and short-term goals. 
  • Believe that you are capable of achieving something: knowing that you have the capacity to do whatever can unlock a lot of potential in you. You’ll likely say yes to a lot of opportunities.
  • Build positive relationships: focusing only on the people who truly care for and support you is important. 
  • Accept that change is permanent: if you keep this to heart, you can adapt to any situation.
  • Seek the lessons you can learn from every experience: your focus should be on how to move forward, how to be better, and what you can learn from your mistakes.
  • Be proactive: instead of waiting for something to happen, you can initiate things yourself. For example, instead of just waiting for your finances to fix themselves, you can find a financial mentor or enrol yourself in a financial literacy course.
  • Always remember to take care of yourself: you can’t work on your resilience if you don’t care for yourself. If you’re not well mentally, physically, or even financially, it will be a big challenge for you to overcome adversity.

There are those that can naturally build or develop their resilience. If your resilience needs work, remember that you can always develop it like any other skill to improve your life, including your finances.

Ways to Become More Financially Resilient

Financial resilience is one of the most important skills you can develop. When financially resilient, you can handle any life event without negatively impacting your assets or finances. For example, building an emergency savings fund can prepare you for unexpected expenses such as job loss, medical emergency or car repair.

Remember that resilience is not about avoiding or eliminating stress but rather developing the skills and mindset to handle and bounce back from adversity. You can build better financial resilience by:

  • Building an emergency savings fund: start by setting aside money in a savings account specifically for unexpected costs. Aim to save enough to cover 3-6 months of living expenses. In most cases, manually tracking all of this down can be challenging. Try tools like E-Smart Budgeting to help you track, record, and manage your budget.
  • Live below your means: spend less than you earn and avoid taking on unnecessary debt. This will give you more flexibility and financial security in case of a job loss or unexpected expense. 
  • Diversify your income streams: consider starting a side hustle or freelancing to create additional income streams. This can provide a safety net in the event of a job loss or decrease in income.
  • Plan for the future: create a long-term financial plan that includes retirement savings and paying off debt. Regularly review your progress and adjust your plan as needed.
  • Stay informed: keep up to date on financial news and trends. Subscribe to podcasts that talk about how to handle your money better. This will also help you to create a good mindset about money.

We’re not really taught how to handle our finances in school, so if becoming more financially resilient is something that you struggle with, try getting a financial mentor or enrolling in a financial literacy course.

Striving and keeping yourself accountable to reach your goals can be difficult, but with the help of a mentor, the difficulty can be eased. At Help My Wealth, we offer different levels of mentoring/ coaching to all our clients to guide them on their guide to financial empowerment.

 

 

Want to know more about this topic or how to get started? Then contact us here

Phone

0240141949

Email

info@helpmywealth.com.au

Address

Suites 1 & 2 Lake Macquarie Fair, 46 Wilsons Rd, Mount Hutton NSW 2290, Australia

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Contact

Phone

0240141949

Email

info@helpmywealth.com.au

Address

Suites 1 & 2 Lake Macquarie Fair, 46 Wilsons Rd, Mount Hutton NSW 2290, Australia

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