How Strong Are Your Resiliency Resources?
Events related to the COVID-19 pandemic have recently brought increased attention to the concept of resilience.
I recently presented a 90-minute webinar for financial education professionals about building financial resilience. In everyday language, resilience is the ability to “bounce back” from and cope with life events, both negative (e.g., unemployment) and positive (e.g., birth of a child). It is developing an ability to cope before challenges happen. Financial resilience is the ability to handle life events that impact household cash flow (income and expenses) and net worth (assets and debts).
Some stressful events, such as health issues and divorce, affect people individually. Others, such as a plant closing and COVID-19, affect large groups or society as a whole. Resilience varies from person to person according to the situation at hand and personal resiliency resources. Two people can experience exactly the same situation but handle it very differently.
On my webinar, I presented a variety of resilience teaching materials for financial educators. Participants took a 20-question quizas a self-assessment of their resiliency resources and added up their scores to see how they were doing. Three categories of resiliency resources are included on the quiz that the participants took: financial, social/community, and personal:
Financial Resiliency Resources– These include an emergency fund of at least three months expenses, low-interest sources of credit, a low consumer debt-to-income ratio, various types of insurance (e.g., disability, health, life), human capital (job skills), estate planning documents, and accumulated savings and investments for retirement and other goals.
Social/Community Resources– These include having at least five close friends or family members to help you out in the event of an emergency or crisis, government or non-profit agencies to assist you, and regular medical check-ups and screening exams to uncover “underlying health issues” before they get worse.
Personal Resources– These include individual characteristics such as information searching skills, optimism, organizational skills, focus and concentration, good health status, stress management skills, and literacy skills.
I encourage you to visit the website for the webinar and supporting materials. Take the Personal Resiliency Resources Assessment Quizand review the scoring grid at the end. Next, use the Resiliency Resources Action Plan Worksheetto develop an action plan to strengthen your resilience for the next challenging event that comes along.