(NC) Financial resilience is just as much about health as it is about wealth. Studies show that those with a strong financial foundation are better prepared to handle crises, whether they be personal or a large-scale disaster.
Just as we would prepare for a flood or wildfire, financial resilience allows you to weather life’s uncertainties with confidence.
Here are a few ways to build your personal financial resilience:
Educate yourself. Understanding your personal finances is the first step to building resilience. Take time to invest in yourself and seek out resources to learn about budgeting, investing and risk management. Look into books, workshops or financial literacy programs that are in your area or available online. A financial advisor is also a great source of information and advice. The more informed you are, the better decisions you can make when facing financial uncertainty.
Build an emergency fund. A financial safety net can be the difference between reassurance and stress in an emergency. To create an emergency fund, work toward saving enough to cover living expenses for three to six months in an easily accessible account. This can help cover costs such as home repairs or expenses during a job loss.Create a realistic budget. A proper budget is the foundation of financial resilience. A simple way to make a budget is by subtracting the cost of your monthly expenses from your after-tax income. This gives you a balance to contribute to your savings goals each month. You could also consider creating a spreadsheet or finding a budgeting app that ensures you’re saving consistently and avoiding unnecessary spending.
Plan for retirement. It’s important to think about life after you stop earning your regular wage. Contributing to retirement savings and long-term investments ensures you’re financially prepared for the years ahead. Consider speaking with a financial advisor who can help create a plan that considers your lifestyle and retirement goals.Get insurance protection. Having the right insurance can prevent a financial crisis in the face of an emergency. Life insurance, for example, is the first line of protection for your loved ones should the unthinkable happen. Review your home, auto and personal insurance policies regularly to ensure you’re adequately covered, especially against climate-related risks such as floods and wildfires.
Explore financial solutions and resources that can help build resilience at cooperators.ca.
