The world – and investment markets – can seem a volatile place right now. Global markets are adjusting to tariff announcements and reversals, changing interest rates, geopolitical tensions, and a shifting economic landscape. That’s unlikely to change anytime soon.
In times like these, financial resilience – your ability to withstand shocks and recover from them – is more important than ever.
So how resilient are your finances? Here are ten key questions to help you form a view.
1. Where are your biggest exposures – and can you handle them?
Financial resilience isn’t about eliminating all risk – it’s about understanding and managing it.
Are you heavily exposed to a single asset class, like Irish property? Or are most of your savings tied up in your employer’s shares – which could face risk at the same time as your employment?
There could also be personal factors, such as your health, or your debt position.
Recognising your key risks is the first step towards managing them properly.
2. Is your investment strategy matched to your timescale?
Any asset used in the wrong way can be risky. Are your investment selections appropriately matched to your plans? If you need access to funds in the short term, riskier assets like equity funds might not be the best place to keep them.
Longer-term money? It makes sense to embrace more growth-focused investments – and worry less about short term noise.
As time moves on, it’s important to re-assess your selections so they remain appropriate.
3. How would you support yourself if you became unable to work?
Your biggest financial asset isn’t your savings or your pension – it’s your ability to earn an income. Income protection insurance can provide a replacement income if illness or injury strikes.
It’s worth considering how long you could last without earnings, and what plans you have in place to bridge the gap. Income protection can help.
4. What would your family live on if you died prematurely?
If your income supports others, it’s critical to think about life cover. A solid life assurance plan ensures that your loved ones could continue living their lives without financial worry if you weren’t around.
5. Have you got cash on hand in case of disruption?
Financial resilience planning can only be done in advance – and things can change quickly, as we’ve seen lately. A power cut, a cyber-attack, or a simple technical glitch can restrict your access to funds. It’s smart to hold a small amount of physical cash at home – and to spread your bank accounts across more than one different provider.
Access to cash is a small but important piece of resilience planning.
6. Could you withstand a 10% increase in your mortgage repayments?
Interest rates have risen sharply over the past couple of years – and further increases aren’t out of the question.
Based on a 4% interest rate, a 20-year mortgage for €200,000 would cost €1,212 per month. A 1% rise to 5% would increase that monthly repayment by 9%, to €1,320.
Could you afford your mortgage if rates moved higher again? Stress-testing your finances now can prevent a lot of heartache later.
7. Do you have an emergency fund?
A rainy-day fund is a cornerstone of any resilient financial plan. Ideally, you should aim to have three to six months’ worth of essential living expenses saved in an accessible account. This cushion gives you time and breathing room when unexpected costs hit.
8. Are you ending each month – and year – with a financial surplus?
If your spending consistently outpaces your earnings, it’s a clear warning sign.
A surplus doesn’t just build resilience – it creates opportunities to invest, pay down debt faster, and plan ahead with confidence.
9. What’s the financial plan for when you stop working?
Retirement might seem distant – or it might be coming up faster than you think. Either way, a pension plan is essential.
Knowing how much you’ll need, where your income will come from, and how your pensions are growing will give you real peace of mind.
10. Are you regularly reviewing and updating your financial plans?
Even the best financial plan can quickly become outdated. Changes in your personal circumstances – like a new job, a move abroad, a growing family, or shifts in the economy – mean your plan needs to evolve too. Some people set a regular time each year to review your finances: your savings, investments, pensions, insurance, debts, and goals.
Financial resilience is not just about having a plan – it’s about keeping it alive and up-to-date.
