What does financial resilience refer to?

Financial resilience refers to the power to handle financial setbacks and manage hardships effectively. It embodies the ability to cope with unexpected financial challenges, such as job loss, medical emergencies, or other crises that can affect one's financial stability. Individuals who possess financial resilience are often able to adapt their financial strategies, create buffer savings, and make informed decisions that help them recover from adversity, maintaining a sense of stability in their financial lives despite difficulties.

This concept emphasizes the importance of not just managing current financial resources wisely but also being prepared for the unpredictability of life. It encompasses a range of skills including budgeting, planning for emergencies, and having the flexibility to adjust financial plans in response to changing circumstances. Individuals lacking financial resilience might struggle more significantly during crises, as they may not have the necessary tools or plans in place to address such setbacks effectively.