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Resilience is the ability to bounce back from setback or difficulties. Financial resilience is the ability to bounce back from a financial setback or difficulty. 

Just like the financial market, financial growth comes in waves of growth and retracement. This wave pattern is called Elliot wave. 

It comes in phases of growth and decline called ‘impulse and retracement waves.’ An impulse wave moves in the direction of a trend, but limitless growth is not sustainable. For further growth, there must be a retracement, a stage of setback. In finance, this phase is good news. It gives you time to sit-back, and strategize. You’re able to review your activities:

  • What is the cause of the setback?
  • What did I do wrong?
  • What could I have done differently?
  • How can I prevent this from happening again?

This phase of self-evaluation is the perfect ground for growth. While experience is not the best teacher, lessons learnt from experience are difficult to forget.


Tough times are impossible to completely avoid. Economic tough times are beyond individual control. To survive and thrive in these times, you must be resilient.

Let’s discuss 5 ways to increase resilience.

  1. Stay positive.
  2. Be informed.
  3. communicate
  4. Set goals.
  5. Keep busy


financial resilience meaning

 What is the first thing to crash in an economic recession? Your emotion. 

First your emotion, then your thoughts. Staying positive in a troubling economy might, at first, seem like a mirage. If you attempt to pursue it, you’ll realise that it is an illusion. But, being positive is what you need in troubling economic times. 

Think of it, if you’re a family head, others will be looking up to you. Wife, children, maybe older parents. So what can help?

Avoid denial. Being positive does not mean denial that all is well. It means accepting that things are not fine, but choosing to see the positive side of things. Do things that gives you joy. Spend time with your family. When was the last time you had a heartfelt discussion with your spouse, take your children to school? Bath the house pet? Little things like this can take your attention from yourself. Spending time with loved ones and seeing them happy can make you happy too. And positive.


Image by Gerd Altmann from Pixabay

The year 2020 saw the rise of bitcoin and other cryptocurrencies. Many saw it as the goldrush of the 21st century. Everyone wanted a share of the pie. Bitcoin saw its adoption by firms and big businesses. Certain governments adopted its usage. Retail investors  who were not able to buy the ‘virtual gold’ invested in alternate cryptocurrencies. This resulted in cryptocurrencies reaching all-time-highs with many retail investors buying at the peak.

But nothing good lasts forever. The bull circle reached its natural peak. The bear market followed. First day traders were liquidated. Then other investors saw their investment plummet. Thousands of dollars reduced to cents. People panicked, sold and the fall went deeper. For some, this was an economic disaster, and it still is. 

How can you develop resilience in this circumstance? Be informed. The financial market moves in ebbs and flows. After a long flow (uptrend), a retracement is bound to follow. The higher and longer the trend, the lower and longer the accompanying retracement. Will the retracement last forever? No. There’ll be another trend, and subsequent retracement, and more trends and retracements. This is an endless cirle.

Having this information can keep you sane. You will be able to create strategies to harness the good days, and endure the bad days.

Learn as much as you can about a difficult time. Do research. Understanding your situation will help you make better decisions. Keep a diary and have a written strategy of how to cope.

This can keep you sane in the most trying financial situation.


Image by mohamed Hassan from Pixabay

Speaking up in difficult times is viewed as feminine. For many men, bottling up emotion is a proof of manliness. But the opposite is true. During difficult times, your emotion is the first to take a beat. And it appears there’s a big under-sea cable that connects your mind to your emotion (call it NORDStream 3). 

Expressing your feelings to a confidant can be a coping mechanism. My former employer used to say that when you’re stuck with a problem, speak to someone. Explain the problem to him or her. You’ll probably not get a solution, but sometimes just verbally explaining the problem to someone else can trigger a chain of thought that leads to the solution. Even if you don’t get a solution, speaking up can free your emotions, and help you endure a financial crisis. Not to mention the fact that the solution to many problems usually come from unlikely sources. So speak-up. The next suggestion might just be the solution to the problem.

Remember to keep a journal. This is another important way to free your emotion.


Image by Tumisu, from Pixabay

During a financial crisis. The sense of self-worth is low. You might, at times, feel like a failure.

To counteract this feeling, it is important to set short term goals and strive to achieve them. For example, if your circumstance makes you stay home more, you can set a goal of being a better husband to your spouse. You can learn to cook new food recipe. You can learn a new instrument (if you consider it a short goal). Set a goal to read up on information relating to the financial crisis.

Setting goals and watching yourself achieve them can lift your self esteem. A good self esteem is a coping mechanism that cannot be underestimated.


Image by Gerd Altmann from Pixabay

Directly related to setting goals is to keep busy. When you’re busy, time flies. Even the worse financial situation has its expiry date. The problem is waiting to see it end. But if you’re busy, achieving short term goals, you loose track of time. You take your mind of yourself.


At one time or the other in our lives, we’ll all go through a crisis phase. For many, it will be financial in nature. Every financial crisis, has a beginning and will surely have an end. It doesn’t have to end our lives. Developing resilience will not just help us to cope, but can be the spring board to financial success. Remember, Elliot wave after the first retracement, or set-back, there is a bigger and longer impulse wave.  

Resilience will see you through the setback. And you’ll be better prepared to ride the next positive wave.

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