Becoming More Resilient With Your Finances5 min read

The estimated reading time for this post is 4 minutes. This post may contain affiliate links.

How resilient were you during your last financial setback?

Was it a catastrophe that you are still bouncing back from?

Did you learn anything that you will be putting into place to be better prepared for next time?

I think it’s not a matter of if we are resilient, I think everyone has some degree of resilience built into them. Whether they are able to cope with the change or not is where I believe that it gets displayed the most.

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With our finances, sometimes we are better prepared than other times. For example, last week, my wife’s check engine light came on randomly. Getting the diagnostics test ran for free at our local AutoZone, we found out it was the spark plugs misfiring. We figured, ok, just needs a tuneup and it wouldn’t cost that much to get repaired.

We made the appointment with our local mechanic and had them look the car over and since we were having it worked on, we mentioned the other little things that were going on as well. When the mechanic got done looking it over and had called me to tell me what work he thought needed to be performed, it ended up being quite a bit more than we had anticipated. However, we were ok with this and since we had our emergency fund in place, we were able to pay cash, get all the work done and even score a discount at the same time since we were having more stuff worked on at once.

What we anticipated to be a $200 repair turned into almost a $1,000! If we hadn’t been so prepared with our finances, we would’ve had to sacrifice getting some of this much needed maintenance done and had to put things off. I view this as a good amount of resilience. There was no worry or angst when it came to how we were going to pay for the repair. We knew that it needed to be done and gave our bank info so that they could process the transaction.

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What can you do to increase your resilience in your finances?

According to this article, there are 10 steps to increasing your financial resilience. The steps still hold true today even though it has been published since 2009.

He starts out just like I would tell everyone to start out by telling you that you need to learn to track your spending. Of course this is the first step in almost any person’s life since it shows you where the problem actually is. Tracking your finances can seem daunting, but when you start using great tools like Mint, Personal Capital, or even my monthly budgeting spreadsheets, it becomes much easier and will allow you to formulate a plan of attack.

The second step is getting rid of your debt. When you focus on creating cash flow by paying off your debt, you will have more money to cash flow emergencies. It’s not that you can’t handle the debt. When you have no extra margin to deal with it, unexpected expenses are sure to pop up. Getting rid of our debt has been such a blessing and has helped us take advantage of many great opportunities that have come our way since. Things like going down to one income so that I could stay at home with our two girls full time. Or being able to tackle unexpected expenses like in my story at the beginning.

Cameron goes on to talk about cutting costs through DIY solutions and sustainability. Honestly, I think we’ve saved hundreds, if not thousands in labor costs doing work ourselves versus calling a professional. I’ve done lots of home renovation things like put in a new drop ceiling in our basement and replacing the ceiling lights. I’ve replaced our kitchen laminate floor as well as put in an epoxy floor in our basement. These things would have been much more costly if we decided to call in a professional. And we’ve been able to learn a lot more about our house in the process as well.

The fourth thing Cameron talks about is creating multiple streams of income. He talks about creating passive income while working a full time job. This helps build up a steady stream of income that is used if your main job disappears. Recently, I’ve been working on this as I’ve starting working on my website much more. I’ve starting to monetize it through affiliate programs that I trust and can recommend because they’ve helped me. I think many people out there are after a secondary income. This will help move from working on something you have to do to something you want to do.  If all your income doesn’t come from one place, you’re likelier to become much more resilient in the future.

To check out the rest of Cameron Shaefer’s steps to increasing your financial resilience, check out his article. He goes over more things such as:

  • Building an emergency fund
  • Maximizing the contributions to a Roth IRA
  • Diversifying your investments
  • Learn entrepreneurship
  • Nurture relationships
  • Hold on to money loosely

All in all, the more you build margin into your finances, the more resilient your finances will become. If you are looking to take action today, grab my 5 Actions To Improve Your Finances checklist for free. I give you 5 things you can do this week to help get on a better track.

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Steven Goodwin

Owner/Blogger/Consultant at MyFamilyOnABudget
Steve Goodwin, a stay-at-home dad of two girls is passionate about finances and is helping others just like you get out of debt and build wealth handling money God's way. His goal is to inspire people like you to gain control of their finances by destroying debt and building wealth using their cash flow.
Posted in Finances.

13 Comments

    • Yes they are, aren’t they! Our latest endeavor is getting our roof replaced after our insurance isn’t willing to replace the whole thing. We are in the process of getting quotes and will pull the trigger in the next few months. After that it will be rebuild the emergency fund asap again! However, emergency funds are really just the beginning, you need insurance, investments, a backup plan for if your job fails you, etc! Glad you enjoyed the article!

    • Yeah, car maintenance is a big one if you don’t know a great mechanic! I can do a lot, but sometimes it goes over my head and will end up taking me 3-4x as long. Gotta recognize the opportunity cost sometimes. Thanks for stopping by Liz!

  1. Great perspective. Growing up I saw my father put into practice the act of diversifying his income, by helping with friends painting businesses nights and weekends. When I was a teenager, he was laid off from his corporate job, but he was able to pivot into a full-time painting business that he runs to this day. If the internet was bigger when I was young, I have no doubt he would have been online trying to start a business. Whenever you can diversify your income streams, you reduce the financial risk your family has by relying on one income source.
    Liz@ChiefMomOfficer recently posted…Dealing With Snow Days as a Breadwinning MomMy Profile

    • Yup, that sounds like my dad quite a bit! He was always trying new things and he didn’t even finish high school! He dropped out in 9th grade! But, the work ethic that generation has has always amazed me! They just don’t take no for an answer.

  2. In January I ended up needing emergency abdominal surgery (ambulance ride to the hospital, two hours in the ER followed by the surgery, and a short stay in the hospital after). The bills are still rolling in, but it is wonderful to not be stressed out about paying for any of it. Annoyed yes, stressed out, no. Being financially resilient is a very good thing.
    Mrs. BITA recently posted…A Lazy Person’s Guide to Earning and Using Ultimate Rewards PointsMy Profile

    • Wow, I’m sure that wasn’t cheap! The peace surrounding our finances is amazing though, isn’t it? Thanks for sharing your story! I hope you are making a steady and fast recovery!

  3. This is great! Before I began my financial journey I was never prepared for emergencies. And that’s one of the reasons I was keeping myself stuck in a cycle of debt. Thanks for this post. It’s encouraging to read on a day I myself will be taking my car to auto zone to get tested!

    msrob0t
    thebudgetawakens.com

  4. Tracking your spending pattern is the foundation to be resilient with your finances. It’s best to keep track of your finances to find out your weak points and to determine the problem right away.

    This list offers a lot of amazing financial solutions, but I’m just wondering why healthcare and long term care needs are not included here. Planning for these expenses are imperative today due to longevity and because the cost of medical expenses and nursing homes are rising.

    Your streams of retirement income can cover these expenses but for how long? I’m considering getting a policy that can help me cover my care needs, protect my family from the devastating cost of care and can give me peace of mind.
    Samantha Stein recently posted…Dementia Care: Filling the Role of Spouse and CaregiverMy Profile

    • Thanks Samantha. Yes, healthcare and long term care needs should definitely be on the list! Thanks for pointing that out! We should even probably include life insurance until you can self insure in there as well.

  5. It seems like planning for finances is not the same as before that having money in your bank is enough to be ready for your future financial needs. You need to other things like write down your expenses and monitor them. I promised myself, I will write down everything I’ve charged to my credit card this year, but laziness got the best of me. I want to limit my spending, and clearly, I failed. I’ll do it next month!

    I think having insurance can provide additional security. I have health insurance right now and still thinking of getting life insurance since I’m still single or diversifying my investments.

    This is helpful, Steven. Thanks for sharing!

    • And that’s the downside to using credit cards and not tracking and paying attention! Life insurance is great when you have people depending on your income from month to month. You said you’re single, I probably wouldn’t get a policy unless you have kids in the picture or anyone in particular that would need to live on your income.

      Diversification of your investments is critical to ensure that you’re not taking too much risk in one area with too much money! Glad you found the tips helpful! Hope you put them to good use!

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