When it comes to our personal finances, resilience is a necessity. Life’s unpredictable nature can bring about significant financial challenges, from unexpected medical expenses to job losses or the demands of single parenting. These circumstances not only put a strain on one’s finances, but also relationships and everyday lives. But with the right strategies, it’s possible to regain control and build a more secure financial future.
One effective strategy is benchmarking your finances. Benchmarking is simply making a list of the things you spend money on and then identifying where and how you could have spent less. For example, consider the amount you spend dining out per month. This expense can be cut in half by making the effort to do so and providing yourself with a set allowance per month to dine out. In addition, another we pay little attention to are the service providers that adjust their fees automatically charging us more without notice. By taking the time to review comparable offers you may reveal opportunities for cost savings that you might not have otherwise noticed.
During my own journey as a single parent, I faced financial hurdles that were frustrating at times. Balancing everyday life raising a child while managing a household on a single income had its challenges. However, by taking the time to strategize, I was able to turn things around.
Benchmarking how my money was spent was the first step. I carefully reviewed my spending on essentials and non-essentials. This helped identify where I could cut back, such as dining out less frequently and switching to more cost-effective service providers. Automating bills also helped because I had full control on when a payment was made and avoided any late fees. I even set up automatic transfers to savings accounts that would adjust according to how much I could afford to save at that time. Whether it was $6 or $120, I was consistently building my financial cushion, even when life got hectic.
Most importantly, I identified my wants vs. needs. This allowed me to make more informed decisions about my spending, focusing on what truly mattered and eliminated the unnecessary expenses.
Benchmarking, automating, and prioritizing needs over wants led me to a much stronger financial position. Resilience in personal finance is about making informed choices and adapting to life’s challenges with a strategic mindset. With these tools, you too can build a more resilient financial foundation, no matter the obstacles you face. But it starts with you!
