Even with the best financial planning, most of us will experience unexpected financial challenges. The stock market takes an unexpected downturn, you’re laid-off, a family member becomes ill, you live through a natural disaster – life happens and it can impact your finances. When it does, your financial resilience can make a real difference.
How would you describe financial resilience? Many would say that it’s the ability to “bounce back” from economic challenges. Most people can manage to bounce back over time in some sense, but having true resiliency is really more of an ongoing approach to life. Resilient people don’t avoid being hurt, and they definitely don’t recover instantly from the damage. They do, however, have the inner strength to keep going.
I’ve seen time and time again the importance of financial resilience during my time as a financial life coach. Financial resilience has two facets: the psychological and the fiscal. It’s the ability to withstand life events that impact one’s income and assets, but it’s also the ability to keep pushing past any financial challenges without giving up on what matters to you most.
We all can improve our financial resilience. Here are a few tips on how to engage with whatever financial challenges come your way.
Name your struggle
Don’t try to minimize your struggle, and don’t be ashamed by what stresses you out. Put a name to the struggle that you’re facing.
Are you worried about retirement, your savings account, supporting your kids through college – what’s keeping you up at night?
By being honest with yourself, you’ll see that most likely you are already demonstrating resilience in dealing with this situation. There is amazing power in just acknowledging what is going on.
Resilient individuals have a network of people to fall back on when times get tough. When I feel like there is no way out of a problem, it’s often a friend that offers the emotional support and advice that I need.
You don’t need to tell everyone about your struggle, it could be just one or two close friends. And don’t forget that’s what your financial advisor is there for — to support you when you feel overwhelmed. Don’t be afraid to reach out to them when you need to strengthen your resilience.
Implement practical habits
There are some simple practical habits that can greatly improve your financial resilience (and reduce stress). For example, track spending, cut unnecessary costs, eliminate debt, and create an emergency fund. It can also be helpful to do a financial checkup. These habits will remind you that you’re still in control of your financial future.
Take a break
When you’re thrown off by an unexpected financial challenge, your tendency can be to focus all of your time and energy on it until it’s resolved. However, sometimes when you’re feeling overwhelmed, the best thing you can do for your resiliency is to take a break.
That could mean going on a jog, reading a novel, or taking a power nap. After you take a break from the problem, you’re in a better position to come up with a creative solution. Another great way to take a break is to practice mindfulness.
Remember your vision
Sometimes it’s easy to forget what you’re fighting to achieve. This is when you need to remind yourself of your life vision. When you’re clear on exactly what you want out of life and how your financial plan can make it a reality, it can re-energize you to stay the course.
As a financial life planner, I specialize in helping people to cultivate resilience and work toward their vision. I’d love to help you get a handle on your big picture vision, as well as develop a personalized strategy to help make it a reality. Feel free to schedule a complimentary Financial Life Plan Discovery Session with me to learn more.