Overcoming Financial Fragility

The United States is the wealthiest country in the history of the world, yet many of its citizens struggle to keep their heads above water financially. You might ask yourself, how can this be the case? Part of the answer is that we live in a culture that treats income as wealth, when those two are not the same thing. Directly in line with that is the fact that regardless of income level, the majority of people in this country are living paycheck to paycheck. In other words, they spend virtually everything they earn, or in some cases, more than they earn. This brings to mind something Dr. DeForest Soaries, who served as the keynote speaker for the 2026 Financial Empowerment Conference, shared with the audience at the conference and on the podcast, Know Better to Do Money Better. He said that perhaps the most important financial issue people face today is financial fragility. What that means is as long as things are going according to plan, your finances aren’t a problem, but the smallest upset in the plan can bring your financial house down like a house of cards. Of course, that’s no way to live, having to worry about something unexpected blowing up your financial life without warning. We see this play out in a variety of ways, but the current environment we find ourselves in, with prices spiking on the heels of policy decisions like tariffs and wars, has put financial fragility in the spotlight as individuals and families seek to stay afloat in challenging economic times. The important thing to remember is that there are always going to be things that happen unexpectedly, and you need to have the capacity to withstand those things and not have them derail you financially. So, let’s look at 3 ways you can make yourself less financially fragile and more resilient.

As previously stated, we live in a society that tends to normalize living on the edge. You’ve probably heard the saying that you should live within your means. In other words, don’t obligate yourself to spending so much of your income that you have no margin to absorb a shift in expenses, like we’ve seen caused by increases in the rate of inflation. Unless you own your own business, you may have a limited ability to control your income, but regardless, you have some control over what you spend your money on. Yes, there are some things you cannot control in that regard either, like the level of rent you may have to pay where you live, but more often than not, becoming overextended is a choice, not strictly a result of circumstances. If unexpected circumstances put you in a difficult position, and you need a temporary fix, often the fix involves borrowing to bridge the gap. That can come in the form of a loan or even a credit card. The credit itself is not necessarily the problem. Often, when people go the route of financing to cover a shortfall, they have all the intentions in the world of paying the money back quickly. However, those original intentions don’t always pan out, and what was supposed to be a short-term stopgap turns into a long-term drag on your finances. If this cycle sounds familiar to you, understand that sometimes when your plan gets upended, you may have to take a step back, but it often takes discipline and resolve to commit yourself to not staying in that place and bringing yourself back to a place of greater financial stability.

Some of the things that can cause you to overextend yourself are circumstances beyond your control that cause you to spend more on things you need. On the other hand, people often find themselves spending more than they can afford to on things they don’t need. The reasons can vary from wanting to feel better after having a bad day to filling an emotional void to feeling like you deserve to treat yourself or other reasons. Along those lines, in this social media driven culture, it is now commonplace to see people posting about the lavish lifestyle they are living or the incredible travel experiences they are having. When you see those images, it can cause you to feel like you deserve some of those things too. There are a number of issues with that thinking. First, you have no idea how real the images are that are being displayed for the main purpose of getting you to click on that post. Secondly, if it does happen to be real, you will never know what that person did to get to the position where they were, and it has absolutely nothing to do with your situation, so comparing your life to someone else’s is not a productive use of your time or mental energy. Regardless of the reason, spending on things you don’t need if you are already in a financially fragile state, is not likely to end well. The wise approach is first to ensure that you can cover the cost of everything you need, and if you still have money to spend on the things you want, do so in such a way that you don’t dig yourself into a hole.

Thus far, most of what we’ve talked about is how you spend the money you have, but there is another piece of the puzzle that is also extremely important, what you save. We live in a society where businesses are looking for any way possible to separate you from your money to buy their product or service. Companies spend tremendous amounts of money on advertising so they can entice you to spend your hard-earned money on what they have to sell. All of that can make it difficult to keep from having your expenses creep to the point where you are living on the margins. However, you do have choices, and one of the choices you have to be strong about making is building the habit of saving from your income. For most people, it is a lot more fun to spend than to save, at least in that moment. But, it’s a lot less fun when your spending has put you in a bind, and you find yourself struggling to make ends meet. To lessen the likelihood of putting yourself in that position, if you build a habit of saving, you can build up enough of a Cash Reserve so that when trouble comes, you have that saving as a critical first line of defense. When your income is such that you can take care of everything relatively easily, the tendency is to spend to your limits, but that is exactly the time that you want to carve out some of what you make and put it away for a rainy day. The question is not whether a rainy day is going to come, it is when that rainy day is going to come, and you want to prepare yourself for it before it arrives by building the habit of saving and exercising the discipline to maintain your savings for when they are needed.

Living in a state of financial fragility may not always be a choice, but when opportunities present themselves for you to move from fragility to stability, it is important that you take advantage of them. If you do that, you will separate yourself from the masses and be on much firmer financial footing.