Last Updated on November 4, 2022 by admin
- Emergency Fund
- Having an emergency fund is one of the most important things you can do to build your financial resilience. An emergency fund gives you a cushion to fall back on in case of an unexpected event, such as job loss or a major repair. Ideally, your emergency fund should be equal to three to six months’ worth of living expenses.
2. Diversify Your Income Sources
If all of your eggs are in one basket, then you’re not very resilient. That’s why it’s important to have multiple income streams. Diversifying your income sources means that if one of them dries up, you’ll still have others to fall back on. For example, you might have income from a job, investments, government benefits, and side hustles.
3. Minimize Expenses
If you want to be financially resilient, you need to be mindful of your spending. Track where your money goes for a month or two so that you can identify any unnecessary expenses that you can cut out. Remember, the goal is to minimize expenses—not eliminate them entirely. You should still allow yourself some room for enjoyment and entertainment in your budget!
4. Build Up Your Credit
Having good credit is important for two reasons: first, it will make it easier for you to get loans when you need them; and second, it will help you qualify for lower interest rates on those loans. If you don’t already have good credit, there are a few things you can do to build it up, such as paying your bills on time and maintaining a healthy credit utilization ratio (i.e., using no more than 30% of your available credit).
