How to Build Resilient Finance

In 1981, single father Chris Gardner and his two-year old son were homeless, living on the streets of San Francisco as Gardner interned through a training program. Most nights, they had to choose between food and shelter, often choosing food so Gardner and his son spent the night wherever they could. They lived like this for a year till Gardner passed the exam to obtain his license as a stockbroker, after which he got a more stable job and a salary.

If the story sounds familiar to you, that’s because it inspired the 2006 movie The Pursuit of Happyness starring Will Smith. Gardner’s story is an inspirational tale of resilience in the face of adversity. But what exactly is resilience and how can one build a resilient finances? Continue reading below to find out.

What is Resilience?

Resilience is the process of adapting well in the face of adversity, trauma, tragedy, threats, or significant sources of stress. Simply put, it means “bouncing back” from difficult experiences. Financial resilience is quite similar, it is the ability to withstand life events that impact your income. This might be a job loss, a reduction in income, or a major household or lifestyle expense.

How Can One build Resilient Finances?

1. Create a financial plan: A goal without a plan is just a wish. The first step to becoming financially resilient is to create a financial plan to help you stay focused on what matters most.
2. Cut costs where you can: Do you really need to subscribe to three streaming services? Can you make breakfast at home as opposed to buying it every day? Cutting out the unnecessary expenses in your life is one simple step to saving more and building financial resilience.
3. Invest: After cutting costs, your next step is to invest the extra money you have accumulated. With double digit inflation steadily eroding the value of your money, it’s important to choose an investment vehicle that provides returns that match or outpace the inflation rate.

Financial resilience is essential to any investor in today’s economy and at AXA Mansard Investments, we are dedicated to building you resilient finances. Please speak to an advisor for sound financial advice.