Financial Resilience

By: Lizzie Letsou

Overcoming obstacles is an important part of life, whether those obstacles are big or small, physical or mental. So, naturally, learning to overcome financial obstacles is a huge part of boosting your financial health. But how do you actually learn to overcome obstacles? Well that’s where a little thing called “resilience” comes into play. Keep reading to find out how you can become more resilient and, in turn, more financially healthy!

What exactly is resilience?

Resilience is essentially your ability to bounce back from difficult situations. Some people might even just call it “toughness.” So…why’s it so important to be resilient?

Well, think about it this way: if you can recover from and cope with crises in an effective way, then you can basically handle anything! If you’re a highly resilient person, then you’re basically able to protect yourself from the negative effects or stresses that come along with tough circumstances.

Grit and resilience

So, it’s definitely important to improve your resilience if you want to improve how you cope with financial hardships. But I want to take a step back and talk about something known as “grit.”

Angela Duckworth’s book Grit: The Power of Passion and Perseverance claims that the key to long-term success is grit. She argues it’s more important than talent or IQ for predicting success. But what exactly does grit mean? Grit basically means your perseverance and effort towards a long-term goal.

But, what’s the relationship between grit and resilience?

Though these two concepts are not exactly the same, they are intertwined with one another.

Grit describes your perseverance towards a goal and resilience describes your optimism after experiencing failure.

Let’s say you just started a new diet and exercise routine. Grit is the measure of how committed you are to staying on track and achieving your health goals. But resilience is the measure of how you stay motivated and hopeful even when faced with setbacks (straying from your diet, missing a workout).

While Duckworth’s book mainly focuses on grit as a determinant of success, I would argue that resilience is as, if not more, significant.

Listen, staying committed to your goals and being “gritty” is undeniably important. But…it’s not always realistic. Humans often abandon or lose sight of their long term goals due to difficult circumstances. Even three time Olympian Dagmara Wozniak agrees, “I feel like the most successful people have been the ones that said, ‘No, I’m not going to listen to your naysaying and I’m going to take it to the next level.’” However, resilience is the tool that can help all of us get back on track.

Build financial resilience

Now I want to start talking about financial resilience specifically. How can you build resilience? What does “financial resilience” even mean?

“Financial resilience” can be interpreted as one of two things. Some might bring up “financial resilience” in discussions about securing financial stability and mitigating risk. But I’m going to be talking about “financial resilience” in terms of holistic well-being, meaning I’ll look at how resilience is tied to your emotional, psychological, and financial intelligence.

When we talk about money, we often leave emotions out of the conversation. Here’s the thing though: emotional resilience and financial resilience aren’t two separate character traits. If you’re emotionally resilient then chances are you’ll be financially stable.

How does that work exactly? I’m glad you asked! Let me walk you through how building emotional resilience can better your finances.

Understanding and processing emotions

Let’s say you’ve just been faced with a big financial blow. You’re in crisis mode right now and you’re freaking out. Being “resilient” and optimistic is probably the last thing on your mind. You’re just focused on the situation at hand and that’s totally understandable.

But, remember to take some time to understand and process the emotions you’re feeling. That’s actually the first step to becoming a resilient person.

Being resilient doesn’t mean you’re never going to feel pessimistic or down about your finances. In fact, a lot of people experience negative emotions about money every day. And that’s not abnormal or shameful at all. It’s pretty normal actually.

However, the difference between a resilient person and a non-resilient or “vulnerable” person is how they deal with those negative emotions surrounding money. While a non-resilient person might let those emotions overcome them, a resilient person will take the time to understand what they’re feeling. Because of their resilience, they won’t make permanent, risky decisions based on temporary emotions.

Thankfully, Nav.it not only encourages people to confront difficult emotions and take back control of their finances, but also makes it super easy! With features like Money Mindset and the Community feed, Nav.it makes sure that you’re checking in with yourself before making a hasty decision due to stress overload.

Reframing

In addition to encouraging you to build mindful money habits, Nav.it also pushes you to reframe your negative thoughts and experiences with money.

Here’s an example of that reframing: we often hear people talk (or even joke) about being “broke.” But let’s take a minute and think about what we’re really saying when we describe someone as “broke.” In fact, let’s take it a step further and think about what the word “broke” or “broken” means.

“Broken” normally describes something that cannot be repaired, something that is without hope of recovery. Despairing. Defeated.

I hope you can see why this is a problematic term to use in a financial context. The reality is that no one is beyond repair. No one should feel that they are “broken” simply because they are in a bad financial situation.

So, let’s change this narrative: you’re not “broke,” you’re simply growing. One good thing about hitting rock bottom is that there’s nowhere to go but up. If you’re using Nav.it, then I already know you’re actively working to improve your finances and build better money habits.

This is just one example of how Nav.it will help you re-evaluate your financial circumstances. Nav.it is constantly working to help its users realize the power that comes with changing your mindset (and your language) about money.

Behavioral change

Alright I’ve talked a lot about language and emotions so you’re probably wondering: how can I use my resilience skills to generate behavioral (and financial) growth?

Well, at Nav.it, we believe that your beliefs become your actions and those actions become your habits. In other words, your innermost beliefs and values surrounding money translate into real-life financial behavior and decision making.

So, if you change your mindset, you change your behavior. And if you change your behavior, you can basically change your entire financial situation.

Now, behavioral change will look different for each and every person. And, some people can simply form and change their habits more easily than others. Additionally, the extent of your behavioral shift will depend heavily on the state of your current financial situation.

That’s all to say that you shouldn’t compare yourself to other people. Change is a long, difficult process and not everyone changes at the same time or pace. In fact, some people never change at all. So just be glad that you’re willing to work towards better financial habits!

A willingness to work hard and preserve is, after all, all it takes to be a “gritty,” resilient person. And being resilient is really all it takes to be able to cope with whatever comes your way.