Our country was recently shaken by an earthquake, the likes of which most of us have never experienced. At times like these, persons become very aware that they are not fully prepared to handle such life-changing events and they promise themselves to become more resilient.
At the Commission we are also concerned about our stakeholders’ financial security in the wake of natural disasters. In our outreach sessions we always advise persons to have a minimum of six months’ salary put aside for emergency purposes. This may be a challenge for some, but it is a necessary savings goal that can help you effectively cope during and after unexpected disasters.
Remember that while these unexpected financial shocks may be limited in duration, they can cause a sharp rise in required expenditure with a consequent sharp decline in income.
Building financial resilience
Financial resilience refers to the ability to bounce back from a financial shock. For our purposes we consider financial resilience and vulnerability as two sides of the same coin since they concern the ways in which individuals and households access, build and preserve their financial assets and limit their financial liabilities, especially in the context of an unforeseen event.
Here are some things to consider:
Building financial resilience into your financial planning and goal setting is critical in ensuring the reduction of the negative impact of both man-made and natural disasters. Engage your financial adviser to help you and your family develop a strategy for coping with a financial shock. Include in your disaster preparedness plan:
No matter what your current situation, building financial resilience is essential to help plan for, and overcome, the serious financial shocks that can arise for yourself or your family after a natural disaster.
Don’t wait for a disaster to strike before making yourself financially ready. Be prepared!