A lot of people consider themselves resilient. Heck, it’s woven into the fabric of America: pull yourself up by your bootstraps and so on. But what about financial resilience? Are you prepared to prevent or recover from financial shocks, like those caused by natural disasters or more everyday emergencies? Here are some tips to build and sustain financial resilience for you and your family.
Tip 1: Be Prepared
Yep—just like the Boy Scouts. Being prepared in this instance means knowing what’s going on with your finances. Create a budget and make a financial plan for your family. Compile all your important financial documents and contacts, make sure they’re up-to-date and store them in a safe location—both the paper documents and the electronic ones. And think about socking away some emergency money in a savings account in case of a crisis.
Tip 2: Protect Yourself with Insurance
Having adequate insurance coverage can help you recover from a financial disaster. This includes car and homeowners insurance or renters insurance, depending on your living situation. It also includes health, disability and life insurance. These policies can help ensure you and your family avoid financial catastrophe.
Tip 3: Plan for the Future
Part of being financially resilient is having a plan for your future. Knowing what your financial goals are can help you determine how much money you need to save for basic living costs and retirement. If you haven’t already, consider starting both a retirement savings plan and an investment portfolio to build a nest egg over time, creating some financial security for your future.
By employing these tips, you can help ensure that you and your family will be able to bounce back from a financial hardship and lead the life you want to live.
Sources: Feinstein International Center, Tufts University, American Red Cross, Federal Emergency Management Agency, U.S. Department of Homeland Security, Ready Campaign, U.S. Department of Homeland Security, Office of Investor Education and Advocacy, U.S. Securities and Exchange Commission, U.S. Federal Trade Commission