Architects look at how quickly a building can bounce back after an event such as an earthquake. We should do the same with our finances. Photo / Thinkstock
Architects look at how quickly a building can bounce back after an event such as an earthquake. We should do the same with our finances. Photo / Thinkstock
How fast can you recover when something happens?
If you talk to an architect, they seem to have a different way of thinking about resilience than the rest of us. I used to think of being resilient as being unbreakable, irrepressible, standing strong in the face of it all, no matter what. You know, Kia kaha.
But whenarchitects measure the resilience of a building, they aren't looking just how strong or rigid it is, but how quickly it can bounce back after an event. If there's an earthquake, for instance, their buildings need to be able to sway gently and return to normal. Instead of focusing on whether or not they will break, they look at how much they can bend.
As we all build our own financial houses and get them in order, they need to be resilient when things happen (as they always do). It's one of the things that help build wealthy lives: not just being able to have choices and reach our goals with money, but being able to handle unexpected crises.
At Sorted we usually recommend setting aside three months' worth of your expenses in an emergency fund. And of course the right insurance is key in being able to recover financially.
But this is about more than just external emergencies like the car blowing a gasket or suddenly needing to take the dog to the vet. There are also all those unplanned costs that crop up from the choices we make ourselves.
We've just shifted into a cheap house to save funds, but we could not foresee all those expenses we'd have just to make it livable. I've even seen a couple times where someone finds the perfect car to buy, only to find that they need to get a builder to enlarge their garage door so it fits!
Some of these surprise costs simply can't be known ahead of time, but we still need to be ready to roll with it.
And recover quickly.
Get Sorted is written by Sorted's resident blogger, Tom Hartmann. Check out the guides and calculators at Sorted - brought to you by the Commission for Financial Literacy and Retirement Income - at sorted.org.nz.
