Financial security is one of the most important aspects of a fulfilling life, empowering you to pursue and achieve your goals, navigate life’s uncertainties, and live the life you want.
No matter how well you plan or save, illness, unemployment, divorce, or separation can disrupt your financial stability – which is why financial resilience is so important.
In short, financial resilience is the safety net that protects your financial wellbeing in the face of adversity.
Though an emergency fund or ensuring you have appropriate insurance could help ensure you’re better prepared to handle adversity, it’s not necessarily easy to achieve.
In fact, research from Aegon suggests that 51% of people living in the UK couldn’t live on their emergency savings for more than three months.
Read on to find out five ways to boost your financial resilience in 2026.
1. Review your budget and financial goals
A well-crafted budget gives you clarity of all your income and expenditure, allowing you to see where your money goes each month.
Analysing your spending and saving habits could help you pinpoint areas where you may be able to cut back and save to strengthen your financial resilience.
Reviewing your budget also presents a good opportunity to revisit your long-term goals.
Whether you wish to bolster your retirement pot or fund your children’s education, incorporating saving towards these targets into your budget could increase your motivation. It may also help you to identify any areas of weakness, so you can take the necessary steps to boost your budget and ensure you’re ready to deal with unexpected challenges.
2. Build or maintain a rainy-day fund
Having a well-stocked emergency fund is crucial for your long-term financial security.
Depending on circumstances, we typically advise clients to save between three to six months’ worth of essential household expenses in an easy access savings account. If you have a lot of dependants or are self-employed, you may want to have up to 12 months’ worth of expenses on hand.
If you’re already enjoying your retirement, it may be prudent to save between one and two years of expenses. This means you may be better able to resist having to sell any investments to cover unexpected costs, which could be particularly problematic during a period of market volatility.
However much you set aside, your accessible cash buffer should provide funds to support you and your loved ones through emergencies, without jeopardising progress towards your long-term goals.
3. Stop and think carefully before you take on debt
It’s remarkably easy to find your mind weighed down by debt.
High-interest debt, in particular, is best avoided, as compounding interest payments can quickly spiral out of control.
Ideally you should keep your spending within your means, rather than having to borrow at high rates to cover normal expenditure. Otherwise, you might end up spending more of your income paying off debts, leaving you with less to contribute towards your financial resilience.
Even if you think you can easily manage the repayments, you’d be wise to pause and take time to consider if taking on more debt will truly serve you.
If you have high-interest debts that you need to tackle:
- Don’t bury your head in the sand and avoid the issue – the debt will only continue to mount
- Target debt with the highest rates of interest first, so it doesn’t have time to snowball
- Seek expert advice.
If your debt has grown troublesome, revisit your budget to see how you might be able to pay it off sooner.
4. Ensure you’re protected from the unthinkable
Ensuring you have appropriate financial protection in place could safeguard you and your family from unforeseen events.
If you were afflicted by serious ill health or suffered an injury that leaves you unable to work, your income could be affected, leaving you and your family struggling to manage day-to-day expenses.
Worse still, if you pass away without life cover in place, your family may struggle to cope with costs and manage financial affairs – both in the immediate aftermath of your death, and in the years to come. If you’re the primary breadwinner, life insurance could bring significant peace of mind to you and your family.
Financial protection shields you from these unthinkable events, ensuring you’ll be more able to ride out periods of shock.
Forms of financial protection you could consider include:
- Critical illness cover – Usually pays a one-off tax-free lump sum if you’re diagnosed with a serious condition contained within a list of illnesses stated by the provider.
- Income protection – Offers a regular income if you’re unable to work due to an accident or illness.
- Life cover – Provides your loved ones with a lump sum after you pass away, ensuring they can maintain their standard of living.
Depending on your circumstances, you may want to consider one or a combination of all three of these policies.
For instance, if you’re suddenly diagnosed with a serious illness, the lump sum from your critical illness cover could support you over the long term and help pay off any important debts. Meanwhile, the short-term monthly payments from income protection could help cover your day-to-day household bills.
As well as providing crucial financial support, knowing that you and your loved ones are protected from the unexpected can lift a significant burden of worry.
5. Seek financial advice
Working with a financial planner is one of the most straightforward ways to boost your financial resilience.
A survey from Royal London shows the emotional benefits of seeking advice:
- 34% of respondents stated that having access to financial expertise made them more confident in their plans
- 34% said they felt more in control of their finances
- 32% said guidance gave them peace of mind.
At Ascenta Wealth, we help clients to develop a robust financial plan designed to help you deal with shocks and boost your resilience over the long term.
From working with you to define your life goals, set up a workable household budget, and invest to protect your financial security in later life, we’re here to help.
If you’d like help to review and boost your financial resilience in 2026, please get in touch.
