We live in uncertain times with many people struggling financially each month, especially with rising costs. This means that issues like unexpected expenses, job losses, health issues, and other disruptions can put you in a difficult spot financially. Many people do not have a large amount of savings they can turn to, so what can you do to build financial resilience during times of uncertainty? This post offers a few strategies to help you build your own personal financial safety net, providing financial protection and peace of mind. Keep reading to find out more. 

Create A Budget

First, you should create a monthly budget. You need to calculate your total household take-home pay and list all of your regular expenses - this will give you a clear overview of your financial well-being and highlight what needs to be changed. The 50/30/20 rule is a good budget for beginners, which involves dedicating percentages to essentials (rent/mortgage, bills, etc), non-essentials, and savings/debt. This will help you control your monthly spending and build a strong foundation.

Create An Emergency Fund

Next, you should start building an emergency fund - you can build this by dedicating a percentage of your monthly income to an easy-access, high-interest account. It is recommended that you have between 3-6 months’ worth of expenses in this fund, which can be used to cover unexpected costs like a household repair or keep you afloat if you lose your job. 

Take Out Insurance

An emergency fund can be useful in many situations, but you should never overlook the value of insurance. Insurance offers financial protection against many threats that could otherwise cause financial damage that is hard to recover from. There are many types of insurance worth exploring, including car insurance, home insurance, phone insurance, etc. It is always important to go with a trusted, established insurance company, such as Aviva. As a well-established insurer, Aviva offers a range of insurance products that consumers can review when comparing cover options.

Debt Management

Debt management is hugely important in terms of financial health and building resilience. It is best to avoid debt where possible, particularly high-interest debt, but sometimes this is unavoidable. Debt follows you around like a storm cloud, which is why you should prioritize paying this off - it might be worth consolidating your debt, which can simplify debt management and could see you pay less in terms of interest. 

Build For The Future

Finally, you need to always be building for the future. It is tough when life is so expensive right now, but taking even small actions now can pay dividends down the line, particularly through compound interest. This is why you need to build up your retirement fund, invest strategically, live within your means, and look for ways to increase your income (this is the most effective way to strengthen your finances).

By focusing on the above areas, you can build your own personal financial safety net and ensure resilience in these uncertain times. It is not always easy, but with a strategic approach, you can strengthen your financial health and build a strong foundation.