Financial resilience can’t be achieved overnight, but it can be developed in time with the right plan. Below, our specialist financial life planners outline some steps you could take. Looking for more bespoke advice? Feel free to give us a call.
Create Emergency Fund
It’s a good idea to amass a stash of savings in case of emergencies to help you recover more quickly from difficult periods without becoming vulnerable. Most experts recommend this amounts to at least 3-6 months of living expenses. These savings should be in a liquid state so that they can be accessed quickly and easily.
Own Assets Outright
People who own their assets outright have more financial flexibility and security. Eliminating any debt is therefore highly advisable, or at least reducing the amount you have. Ideally, no more than 15% of your income should be consumed by debt.
Protect Your Income
Taking out an insurance policy is a great way to quickly bolster your financial resilience. There are a range of options available. Health insurance can help support you and replace lost income if you develop an unexpected illness and are unable to work. Another product on the market is life insurance which pays out in the event of your death, providing your dependants with vital financial support at an incredibly difficult time.
Develop Financial Literacy
The world of finance can feel confusing and jargon-heavy, but improving your financial literacy will make you feel more confident and informed when making important decisions. And, with a solid base of financial knowledge, you’ll be better able to anticipate and navigate any tricky territory.
Setting goals can help you take a more active approach to your money, where financial products become tools for engineering the life you want. Not only will this help you live the lifestyle you truly desire, but having a clear plan is a good way to develop your financial resilience.
Make Money Work Harder
Once you have some essential safety measures in place like an emergency fund and insurance, you could try to grow your wealth even further. By investing, your money has the potential to increase in value – particularly if you do so over a long period of time and the original amount compounds.
Plan For the Future
It’s never too early to start planning for your retirement, and doing so is critical for achieving long term resilience. Whatever a fulfilling retirement means for you, put the financial architecture in place to realise it today. That way, your hopes and dreams for later life will be resilient too, and more likely to come to fruition.