The COVID-19 global pandemic and resulting economic uncertainly have had a profound effect on our sense of safety and control. The closest experience that many of us have had in our lifetimes was the financial crisis in 2007-2008 followed by a deep recession. Although the root causes are dramatically different, the impact on our sense of financial well-being is similar. Few of us expected to face such challenging economic circumstances again within such a relatively short period of time.
Nevertheless, here we are. None of us is immune—we all encounter challenges in our lives. Weathering these storms requires both practical strategies and emotional fortitude. As individuals and families, it is time to assess our current reality, take whatever steps we can to improve our lives now, and plan ahead for the next financial challenge that we will undoubtedly experience in the future. Virginia Satir wrote:
“Life is not the way it’s supposed to be. It is the way it is. The way you cope with it is what makes the difference.”
Therefore, nurturing your resilience is the best way that you can prepare for the unplanned and the unexpected that will come your way. Resiliency is a personal characteristic that can help you navigate life in the uncertain sea of change. In addition, this trait of inner strength will give you the ability to bounce back from setbacks and disappointments.
In your financial life, as in all other areas of life, it is important to nurture your ability to rebound from loss and difficult circumstances. Keep in mind that the bedrock for building your financial life is establishing a foundation of economic resilience for you and your loved ones. In addition, from the emotional perspective, financial resilience requires bolstering your confidence in your ability to prepare for and deal with financial challenges—now and in the future.
To help you in this quest, there are several tools that you can utilize to manage risk and protect yourself from financial reversals. The better prepared you are, the quicker you will recover economically and emotionally.
On the next page, you will find a checklist of the most important financial protection tools. This checklist will help you to make a quick assessment of your current level of financial resilience and determine the action steps needed to “upgrade” your economic security plan.
For each financial tool listed, mark the box that is most appropriate for you. Next, discuss your responses with your financial advisor to help you evaluate the best options for upgrading your financial resilience plan.
Reprinted by permission of Money Quotient, Inc.