Building Financial Resilience
This article is based on the discussion in our podcast Season 3 Episode 3.
Weathering The Storms of Life
Life is full of surprises—some delightful, like an unexpected bonus, and others… less so, like a hefty car repair bill or a sudden drop in income. These moments can shake even the best-laid financial plans, but they don’t have to derail your long-term goals. The key to navigating the unexpected with confidence is financial resilience. It’s not just about saving for a rainy day—it’s about creating a robust financial safety net that gives you options, flexibility, and peace of mind. At The Money Collective, we believe financial resilience is a superpower that anyone can build.
What is Financial Resilience, Really?
Financial resilience is your ability to bounce back when life throws a curveball. It’s what allows you to face challenges like rising living costs, unexpected medical bills, or a job change without spiralling into financial stress. Think of it as your financial toolkit—a mix of planning, resources, and adaptability to keep you steady, no matter what comes your way.
At The Money Collective, we define financial resilience as a balance between living for today and planning for tomorrow. It’s about making informed decisions that align with your goals and values while still leaving room for joy and spontaneity. And here’s the good news: financial resilience isn’t something you’re born with—it’s a skill that grows with practice and intention.
The Two Pillars of Financial Wellbeing
At its core, financial wellbeing is built on two pillars: financial capability and financial resilience. Financial capability is the foundation—it’s knowing how to budget, manage your accounts, and track your spending. But resilience is what takes you to the next level. It’s about building buffers, thinking ahead, and creating systems that allow you to handle life’s ups and downs with grace.
Financial resilience starts with understanding your four financial levers: income, expenses, assets, and liabilities. These levers are the tools you can adjust to create balance when life feels unsteady. By regularly reviewing your financial position and setting realistic goals, you can lay the groundwork for resilience that lasts.
Why You Need a Resilience Plan
Let’s face it—life rarely goes according to plan. Whether it’s a global pandemic, unexpected medical expenses, or a sudden job loss, resilience is about being ready for the unplanned without losing sleep. But here’s the thing: resilience isn’t just about having money set aside. It’s about having a plan—a step-by-step guide for what you’d do if your financial situation suddenly shifted.
At The Money Collective, we encourage our clients to think through the “what-ifs” with clarity and confidence. What happens if your income drops tomorrow? Do you know what assets you could draw on, or how much time your emergency fund could buy you? By writing down potential scenarios and your responses, you shift from a place of worry to a place of preparedness. A solid plan won’t eliminate risk, but it will make you feel far more in control.
Did you know? A shocking 17% of Australian women have no savings at all, and 10% of Australian men. (ANZ, March 2023).
The Power of an Emergency Fund
If financial resilience had a hero, it would be the emergency fund. A stash of savings dedicated to unforeseen expenses, this fund acts as your first line of defence when life surprises you. Knowing you have a safety net allows you to approach life’s challenges with confidence instead of panic.
How much should you have in your emergency fund?
A common benchmark is three to six months of living expenses, but the right amount depends on your circumstances. It may seem like a far off goal to have an emergency fund but the key is to start small. Even setting aside $1,000 can provide a buffer against minor emergencies. The trick is to keep it and only use it in the case of genuine “oh no” moments, like a sudden medical bill—not for that tempting sale on luxury handbags (as hard as it might be!).
Managing an emergency fund
Making sure your emergency fund is accessible in the case of an emergency means you can draw on it quickly. Not something that might take days or weeks to access.
It’s also generally considered good practise to set some rules about when you might access your emergency fund, and why. For example, you may not use your emergency fun to buy a gift for a friend or to go on a holiday. But you may use it to cover the bill when something unexpected occurs like your windscreen is cracked or your phone smashes.
Aligning Your Values and Finances
At The Money Collective, we believe that financial resilience is about more than just having money in the bank—it’s about knowing what truly matters to you. Living by your personal values ensures that your financial decisions align with what brings you happiness and long-term fulfillment.
There’s power in taking the time to define your core values. What do you prioritize in life? Family? Travel? Security? Giving back? By knowing your values, you can make financial choices that support them. For example, if financial independence is a top priority, you might focus on debt reduction and building a strong investment portfolio. If freedom and flexibility are your guiding principles, your resilience plan might include creating multiple income streams or downsizing your lifestyle to reduce financial pressure.
Sometimes, we cling to a certain way of living simply because it’s familiar. But true financial resilience means having the courage to make adjustments that better align with your core values. That might mean shifting careers to align with a passion, moving to a more affordable home to reduce financial stress, or adjusting spending habits to support long-term aspirations.
Resilience is a Journey, Not a Destination
Building resilience is a marathon, not a sprint.
It’s not something you achieve once and forget about—it’s an ongoing process of adaptation and growth. Life changes, and so do your goals and circumstances. Resilience is about regularly revisiting your plan, adjusting when needed, and staying focused on what truly matters.
Start small but start now. Whether it’s setting aside your first $500 or mapping out your “what-if” scenarios, every step builds your resilience muscle. And remember, it’s not about perfection—it’s about progress. With time, intention, and the right support, you’ll not only weather life’s storms but thrive in their aftermath.
Final Thoughts
Financial resilience is more than just a buzzword—it’s a mindset and a skill that anyone can develop. It’s the confidence to face life’s uncertainties with a clear plan and a steady hand. At The Money Collective, we’re here to help you turn financial resilience from an abstract idea into a practical, powerful reality.
Want to start building your resilience today? Explore our resources, online course, and expert coaching at The Money Collective. Because when it comes to your financial wellbeing, the best time to take action is now. You’ve got this!
Listen to the full podcast here: https://www.themoneycollective.com.au/podcast
This article provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Blog article by:
MEL PEARCE
Financial Wellbeing Consultant and Co-Founder
The Money Collective