I had lunch with my friend Craig a few months ago. Craig is an architect, and he took me on a tour of his company’s offices. “The cool thing about this building,” he told me, “is that it’s especially resilient.” I could tell from the way he said it that the word resilient<\/i> meant something a little different than what I might expect.<\/p>\n
“What do you mean?” I asked.<\/p>\n
Craig explained. “In architecture<\/a>, resilience refers to a structure’s ability to return to its original state after a disturbance. Say strong winds cause a skyscraper to sway or an earthquake shakes a house. If they’re resilient, those buildings move with the outside forces but then return to normal when things calm down.”<\/p>\n “Ah,” I said. “When I talk about personal finance, I preach resilience.”<\/p>\n “Sure,” he said. “Resilience is a good thing, both in buildings and<\/i> in people.”<\/p>\n Ten years ago, when I was still struggling with money, my finances were not<\/i> resilient. I had no savings, and I was living paycheck to paycheck on $50,000 a year. When even small things went wrong, such as car trouble, I found myself in crisis mode. How would I pay to fix the problem? How could I meet my other financial responsibilities<\/a>?<\/p>\n When I began to turn things around, one of my first actions was to set aside a small ($500) emergency fund to cope with the unexpected. This idea — promoted by Dave Ramsey and many others — built some resilience into my budget, allowing me to cope with minor crises.<\/p>\n As time passed and my financial situation flourished, my ability to bounce back from unexpected blows improved. This was partly because having more money gave me more options. But it was also partly because I adopted an internal locus of control<\/a>, accepting responsibility for the things that happened to me in life. Instead of waiting for someone or something else to fix problems, I decided that I<\/i> would fix them myself.<\/p>\n Over the past five years, I’ve come to hate the phrase “in this economy.” After the market crash in 2008, the mass media seemed to adopt the notion that we’re weathering an economic storm that simply will not stop. Even today — despite the fact that most economic indicators are positive<\/i> — there are tons of articles built on the premise that the average person is being buffeted by forces beyond her control.<\/p>\n I disagree.<\/p>\n Besides, even when the national economy is<\/i> bad, that doesn’t mean your personal economy has to suffer. For a few years now, I’ve been sharing a metaphor I’ve come to love.<\/p>\n It’s as if each of us is the captain of a ship sailing on the ocean. Sometimes the elements are favorable. Sometimes the seas are stormy. Yes, we can choose to surrender to the whims of the weather, but a smart captain does what he can to prepare for bad weather so that he can steer his ship safely to harbor. In short, the national economy does<\/i> affect your personal economy<\/a>, but you can’t control the former while the latter is entirely in your hands.<\/p>\n To make your financial ship resilient, you must adhere to certain fundamentals, such as:<\/p>\n To paraphrase a famous philosopher, a resilient person is in<\/i> the world but not of<\/i> the world. You cannot escape the national economy. You cannot escape the mass media. You cannot escape your friends and family. But that doesn’t mean you have to buy into what everyone else is doing. Most people have fragile personal economies that crumble when times get tough. You want yours to be flexible and adaptable.<\/p>\n It’s also important to remember the psychological side of money management. Many of my financial tenets<\/a> are based on the need for financial resilience, or mind over money<\/a>.<\/p>\n In psychology, adaptability refers to how well a person can adjust herself to changed circumstances. Because we live in a constantly changing universe, your ability and willingness to adapt is a barometer that measures both your ability to thrive and your capacity for happiness.<\/p>\n In personal finance, adaptability and resilience are also barometers for ongoing success.<\/p>\n","protected":false},"excerpt":{"rendered":" I had lunch with my friend Craig a few months ago. Craig is an architect, and he took me on a tour of his company’s offices. “The cool thing about this building,” he told me, “is that it’s especially resilient.” I could tell from the way he said it that the word resilient<\/i> meant something a little different than what I might expect.<\/p>\n “What do you mean?” I asked.<\/p>\nThe National Economy vs. Your Personal Economy<\/h2>\n
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Mind Over Money<\/h2>\n
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