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Life Planning

Six strategies to help build financial resilience in uncertain times

Tags: Economy, Financial security

Uncertainty is everywhere. Though it can't be predicted, you can face your future more confidently by improving your financial resilience.

Financial resilience is the ability to withstand life events that impact your assets, income or cash flow. It transcends your investments, bank balances, credit history and employment status. The following six financial resilience habits can help keep your financial future bright.

Reevaluate your priorities
The ideal time to reevaluate your goals is now. The ideal frequency is often. So, today is the perfect time to overhaul your budget and review your spending habits. Understanding where the money goes makes it much easier to ensure that non-discretionary expenses maintain priority over discretionary expenses.

If you have enough cash to pay everyday expenses without struggling, consider applying the surplus to your mortgage or other debt.

Parents with young children may use the surplus towards education. If it has been a while since your last vacation, save for a dream vacation. When you can focus on important goals, you can protect the savings from being spent elsewhere.
Trim the fat
Once you’ve prioritized essential spending — food, clothing, taxes, utility bills, housing costs, childcare and others — assess your non-essential expenses. Resist the urge to go too deep into cutting your budget. Otherwise, your miserly ways may take the joy out of your life.

Leave room for things that contribute to emotional well-being but cancel subscriptions and memberships you don’t use ¬— especially if they renew automatically. Resist the urge to make impulse purchases. Sleep on it and ask yourself whether it’s necessary.

Cut back on takeout and dining out. Use the opportunity to cook fresher, healthier meals. Review your insurance coverage and shop for lower rates. The same goes for gym memberships, cellphone plans, and Internet and TV packages. There are more affordable options if you take the time to look. Want to track your success? Check out free or low-cost apps that can automate your saving and spending plans to help you stick to them.
Increase savings and pay off debt
Financial professionals generally recommend having enough cash in the bank to cover your expenses for 3 to 6 months. Setting up automatic transfers to a savings account on payday is prudent — you won't have to remember to do it each month. This strategy can reduce the temptation to spend the money.

At the same time, tackle credit card and other debts once and for all. If you can, transfer everything to a card with a 0% introductory interest rate for the first 6 to 12 months. Do not use the card for new charges, then pay off the balance quickly to avoid interest charges.
Invest for the future
If your budget and cashflow allow, consider investing for your retirement. A balanced portfolio of stocks, bonds and other assets is generally considered the best long-term strategy. This strategy has been proven to deliver the most consistent returns. However, consulting a financial professional is always recommended, as they can suggest the best investment plan for your unique circumstances.
Build career resilience

Resilience isn’t just for your finances. Unexpected job loss can impact your financial goals. Career resilience strategies can help shave time off your job search.

A commitment to learning, a broad network of contacts, a positive attitude and a solid resume can help you achieve your career goals — a new job, starting a passion project or landing a promotion — more quickly. Flexibility could lead to a rewarding second act.
Learn the lessons
Whatever your current financial circumstances are, establishing new habits won’t happen overnight. With time, you will notice that your finances improve more quickly than expected. Day by day, you'll find yourself better prepared for whatever lies ahead.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY), Equitable Financial Life Insurance Company of America, an AZ stock company and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN).