What Does Financial Resilience Mean?
In simple words, financial resilience is an individual’s ability to recover from financial downfalls or setbacks. Unexpected expenses may drain your bank accounts and savings even before you realize it. Having a plan to recover from it financially is what we refer to as financial resilience.It helps an individual avoid any compromise in their long-term financial well-being.
Looking at uncertain times, where we are already struck by a pandemic and ongoing war-like situations in different parts of the world, financial resilience is extremely important as it builds a sense of security and stability to face further economic uncertainty. By cultivating financial resilience, you can build a solid financial foundation for yourself and your family, helping in avoiding many financial shocks and also achieving your long-term financial goals.
How To Cultivate Financial Resilience?
There are numerous ways you can practice financial resilience to become financially strong and achieve your financial goals, both long-term and short- term without getting drained.1. Make Conscious Decisions Before Making A Purchase:
You must be consciously aware that you need something before you decide to purchase something. You can take trials before buying something to make sure it is still what you are looking for. If you are thinking of buying a premium car, laptop, or any gadget, make sure you try it to acknowledge that is what you want. It is a great way to determine if your needs can be fulfilled properly by other alternatives in the market before you pay a hefty amount just for the sake of brand status.2. Live A Minimalist Life:
It is as simple as it sounds. It allows you to avoid making impulsive buying decisions and have only exactly what you need to live comfortably. It helps in avoiding unnecessary accumulation of products, and things and also helps in avoiding unnecessary expenses.It is often said that before you buy something, you should either give it 5 hours worth of time to think about it or sleep on it. This way you will know if it is something that you need or does it align with your values and long-term goals. It will help you avoid impulsive buying and later regretting it, thus also saving you money for you.
3. Find Sources To Generate Passive Income:
Depending on only one source of income is something that does not help much in building financial stability. Especially in uncertain times like these. Besides the usual ways to make money, like investing and renting properties, you can think about some less common options. For instance, you could do freelance work. If you're good at things like designing websites, giving business advice, managing projects, analyzing data, editing, or working with AI, there are lots of people who need your skills. You can use these skills to make extra money and make your finances stronger.Also investing the income you generate from various sources can help you build financial resilience slowly and achieve your financial goals over some time.
4. Upskill And Educate Yourself:
It is non-negotiable, the times are changing continuously and you never know what life may throw at you. Upskilling and educating yourself financially is the only way forward. Now that you understand the value of your savings and just how quickly you can lose it all, your next step should be to focus on making more money.Investing in yourself, especially in your knowledge building. Enhancing your skills can open doors to new opportunities for you, thus increasing your earning potential to a great extent.
