Financial Resilience

April 2022                     

Dear Kaibigan,

What lessons last month came up for you when you immersed in your boredom from a place of curiosity? Since I last wrote you, there have been dramatic changes in our world, specifically the war in Ukraine. You’ve likely watched the news, read articles, seen images, or been flooded with social media recordings from those in Ukraine or those who walked hours to get to Poland and elsewhere for refuge. The war is horrific, and the casualties are enormous. Words are insufficient to offer comfort and to describe the cruelty we know is happening.

Our planned dimension theme this month is financial wellness. I acknowledge that it’s trivial to consider our financial wellness in the context of a war in which many have perished and over 4 million Ukranian refugees have escaped from their war-torn country to survive. I’ve had moments these past weeks of feeling guilty going about my activities for leisure and work. You, kaibigan, like me, may have the privilege to keep living in a safe place, be able to earn money, have loved ones who are thriving, and your direct experience with the war may be limited to what you see in media or stories you hear from Ukrainians in your immediate community. This is okay. It's okay to continue with our daily routine and fulfill obligations. We are allowed to live day to day and make time to grieve and talk about the war and the other inhumane events in our world. As I tell my clients, more than one thing can be true at the same time. Our wellness is still important in wartime, in pandemic time, in our time.

I offer you a distraction from the intensity of our lives and atrocious events. A gesture of recognition that you still have responsibilities that need follow through, especially earning money to pay for higher bills, housing, gas, food, and overall cost of living. I know there are people who work in America and in other countries who send money back, remittance, to families in their native land. Filipinos and Mexicans, for example, will immigrate and take on multiple jobs to send money home for housing, food, education, and medical expenses. These breadwinners often live simply and in low-income neighborhoods, work multiple manual jobs, or are in debt because they give to their loved ones more than they can afford, and keep what’s left for themselves. I’m not a financial advisor or a financial therapist so the ideas I share today aren’t on making money, ways to invest wisely, or how to spend your money on what matters most. I focus instead on your financial resilience regardless of if you’re a breadwinner or a dependent.

Your financial resilience starts with being prepared. Preparation against the unknown is a fundamental part of developing financial resilience—the ability to withstand a job loss, an unexpected expense, an economic downturn, or anything that impacts your income or savings. Being financially resilient doesn’t mean having a lot of money. It’s about being smart and proactive with the money you have, so you can feel more confident that your finances are ready today for whatever happens tomorrow. 

Kaibigan, one way to prepare is to build your financial literacy which is a lifelong journey of learning. Our pasalubong for this month to strengthen your financial wellness and resilience is a list of ideas to prepare and be financially literate:

 · Visit our financial wellness page for activities and community resources with downloadable worksheets to further your preparation.

·  Read for knowledge
Read to understand financial terms whether it be related to your banking, paycheck, sending money to family in your home country, investments, credit cards, or property. Many of us, for instance, don’t take the time to read the fine print or ask questions on the impact of borrowing money or applying for a credit card. Know the vocabulary that relates to your money. Stay as current as you can with business news and consume other financial content on books, videos and podcasts. Work with a financial advisor through your bank or elsewhere for professional support. The more you know about banking terms, the economy, investments, saving strategies, and budgeting, the better your money decisions can be.

· Plan With Your Clan

Money is a taboo topic in many cultures and families. This is a nudge to shift your mindset of “it’s bad to talk about money” to “talking about money with family and trusted friends can help me on my path to financial resiliency”. Talk to your partner or family to make sure everyone’s on the same financial page, especially if they depend on you for income or you on them. Money conversations are ongoing and take time. No need to rush and you can revisit financial topics as often as you want and need. 

·  Know the Numbers
Start by tracking how much money is coming in and exactly where it’s going out. Budgeting doesn’t have to be complicated or strenuous. We have on our financial dimension page community resources with downloadable worksheets you can use to directly type in your numbers. You can also use apps or the old-fashion pen to paper. Opening this door into your finances is the first step away from living paycheck to paycheck and toward financial resiliency.

·  Snip Your Spending

Spending depletes your savings, which decreases your resilience. It becomes problematic when you regularly spend more than you can afford. The good news is you can likely find expenses to cut out or down. Look at your money coming in and the money coming out both monthly and day to day. What are the necessary expenses? What aren’t you using? What can you do without? Every little bit helps.

·  Vet Your Debt

Debt can be a useful part of your budget. Taking on too much debt, or the wrong kind, could be a recipe for trouble. Learning about the types of debt and how they work can help you start managing your debt efficiently and effectively. It may even help you figure out how to reduce current debt.

·  Build Your Emergency Fund

With your baseline established and adjusted, move on to assessing how much you can afford to save for emergencies – those unplanned and unforeseen expenses. Your planning and setting aside a little each month will add up. The amount will grow with interest if you use a high yield savings account, CD or money market account

·  Include medium- and long-term needs

Look at what you need for medium-term needs, like big purchases, and begin to save for retirement. Starting now will make you that much more resilient down the line even if retirement is a long way off for you. Including your future will help you stay prepared for what comes next.

·  Own Your Vulnerability

Take a holistic look at areas of your financial life where you may have blind spots or uncertainties. How long will your savings and emergency fund last? Are you saving enough? Are you overspending or underbudgeting for expenses? Are you leaving out expenses from your budget? Do you have adequate life, auto or health insurance coverage for your needs? Identifying your financial vulnerabilities will build your resilience because you’ll know the steps necessary to strengthen the areas of your finances.

·  Celebrate Your Efforts

Financial resilience doesn’t happen overnight. Set small goals and reward yourself when reaching them, then move your bar a little bit higher. Financial literacy as I mentioned is a lifelong learning journey, and so is bolstering your resilience. Acknowledge your efforts to create a more resilient you.

·  Keep Learning

Having a steady income can help you stay resilient in your saving and spending. Lots of factors – ahem, pandemic and war – can disrupt employment and financial stability. Figure out what knowledge you need to stay relevant and marketable in your profession or in one that interests you. Having transferable and marketable skills will make it easier to find work if you lose your job or move to a new career. If you’re preparing for retirement or are already retired, you can still pick up new information on budgeting, investing wisely and government benefits available to you. Many retail stores and businesses will offer discounts for customers 55 and older which help to save on purchases. Do you know if such businesses exist in your area? Learn through research, ask questions, read, and explore resources.

President Volodymyr Zelensky of Ukraine vowed no surrender. He addressed Britain’s Parliament a few weeks ago, echoing Winston Churchill during World War II: “We will fight in the forests, in the fields, on the shores, in the streets”. A commitment to defend the country for as long as needed. In this spirit of commitment, I ask that you continue to honor your reactions to the war while also continuing to care for yourself. This month your care can include preparing yourself to develop financial resilience to buffer the economic, psychological, and emotional ripple effects of these troubling times. After all, your life still matters, and you may have others relying on you for stability and comfort.

Wishing you resilience in your finances and in life,

 Angel, on behalf of The Giving Well