Financial resilience is the ability to withstand financial shocks, whether they are unexpected expenses, income loss, or changes in the economy. It’s important to build financial resilience because it helps us prepare for the unexpected and can reduce the stress and anxiety that comes with financial uncertainty. In this blog, we’ll explore some ways to improve your financial resilience.
1. Create a budget and stick to it.
A budget is a plan for your income and expenses. By creating a budget, you can see where your money is going and make adjustments to save more or spend less. The key is to stick to your budget, so you don’t overspend and run into financial trouble.
2. Build an emergency fund.
An emergency fund is like a savings account that you set aside for unexpected expenses, such as a car repair or vets bill. Aim to save at least three to six months’ worth of expenses in your emergency fund. Find out more about saving with PCCU here.
3. Widen your income streams.
Having multiple sources of income can help you weather a financial storm if one source dries up. Consider starting a side business, or selling unused or unwanted items on Ebay or Facebook.
4. Pay off debt.
Debt can weigh you down and make it difficult to save for emergencies or invest in your future. Make a plan to pay off your debt as soon as possible, starting with high-interest debt first.
5. Practice frugality.
Living below your means and avoiding unnecessary expenses can help you save money and build financial resilience. Look for ways to save on everyday expenses, such as cooking at home instead of eating out, and avoid impulse purchases.
6. Stay informed about the economy.
Keeping up with the latest economic news can help you anticipate changes and adjust your finances accordingly. Subscribe to financial newsletters or follow financial news outlets to stay informed.
7. Build a support network.
Having a support network of friends and family can provide emotional support during difficult financial times. You can also join financial support groups or forums to connect with others who are working to improve their financial resilience.
Building financial resilience takes time and effort, but it’s worth it in the long run. By creating a budget, and following the other examples provided, you can improve your financial resilience and feel more confident about your financial future. If you’re falling behind with your bills make sure you speak to someone as soon as possible. There are charities like Stepchange or Money Helper who can help for free.
If you’re still struggling, and want advice on borrowing money affordably, PCCU’s friendly and knowledgeable staff are always here to help. Contact us today on 01282 691333.