3 Steps to Building Financial Resilience

What do you think of when you hear the term financial literacy?

Before you fall asleep, hear us out. For us, financial literacy starts with getting a clear understanding of our own finances and having control over our cashflow. When you start with the basics, you’re giving yourself a great foundation to build on.

Part of financial literacy is also building resilience. How can you bounce back after a tough spending month? How do you adjust your goals when your circumstances change?

Let’s get into a few key steps to building financial resilience.

Step 1: You Have To See It To Believe It.

If you’ve ever held your breath when tapping your debit or credit card on a purchase and only exhaled once you saw the screen say “approved,” this one’s for you.

Not wanting to look at your bank account is normal, but it’s not going to help you feel good about your money. Getting a super clear picture of your cashflow is the first step to achieving any kind of financial goal—whether that’s saving for a new car, paying off debt, or managing a monthly mortgage payment.

Cashflow is the movement of money in and out of your account. You can assume how much is going in and coming out, but if you don’t know the exact numbers, it’s really hard to make an accurate plan.

Set some time aside to sit down and look at what the numbers really are. Not sure where to start? Check out our advice for budgeting.

Step 2: Set Tangible Goals.

Just like career, fitness or life goals, financial goals need to be specific. Knowing that you want to go to Mexico or pay off your debt is a great start, but it doesn’t give you a clear trajectory.

Statements like, “I will pay off my line of credit in full by automating $250 payments twice per month until it’s paid off,” or, “I will establish a vacation savings account and contribute $100 per paycheck so that I can go to Mexico,” give you a solid basis to work towards.

Of course, if you do want to achieve these things, you might have to take a step back from spending on other things. To improve your cashflow, you either have to increase your income or decrease your expenses.

Now that you know how much you’re making and you’ve set your goals, you can take a look at what you can live without in order to hit them. Can you make one more dinner at home a week? Could you get that book from the library instead of purchasing it? Every little bit counts!

Step 3: Talk to Someone Who Gets It

Our role as financial advisors isn’t to judge; it’s to get you really thinking about your finances and help you to make the right decisions for current AND future you.

And the bigger picture can be hard to see when you’re going it alone.