English Discussion

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ENGL110

Exploring the Psychological Dimensions of Financial Resilience: Navigating Tight Budgets for

Long-Term Stability

Table of Contents

Item 1 of the Portfolio – Description of Discourse Community: Page 2

Item 2 of the Portfolio – Annotated Bibliography: Page 3

Item 3 of the Portfolio – Final Paper: Page 5

Description of Discourse Community

Financial resilience refers to the ability to persevere through tough financial times or

withstand the events that follow a change in income. This could be due to loss of job, salary cuts,

Commented [JP1]: In APA format, this should be on a title page, with the Table of Contents on its own page.

Commented [JP2]: Good TOC

Commented [JP3]: Part 1 is complete.

loss of business, etc. A further definition means the ability to remain psychologically okay

despite having a change in income. Not many people can be psychologically stable upon losing a

business or a job. For most people, it automatically leads to mental issues like depression, stress,

and anxiety and can also trigger other long-term effects associated with these psychological

challenges.

There are many cases of people suffering from these psychological issues. A 2021 study

showed that over 50% of people who lose their jobs in the United States are likely to suffer from

depression (Rodgers). Sometimes the effects are even worse, and there are cases of people

committing suicide due to the financial burden they have to carry. A CNN poll in 2020 shows

that around 1 in 5 adults visited psychologies or a hospital for mental health reasons

(McPhillips). One of the major causes of their situation was financial challenges. Imagine the

population at risk of suffering from a mental health crisis and what the crisis could mean for the

economy. Therefore, one of the best responses to deal with the situation is to teach about the

principles of financial resilience to every household.

A South African study showed that families with some information and training on

financial literacy and resilience were unlikely to suffer from any mental health complications

regardless of their financial challenges (Steinert 85). The study also noted that financial

resilience is affected by one’s income, savings, debt and availability of financial information or

advice from expert sources. Therefore, “one of the ways to help people master the art of

resilience is to train them on financial and income stability strategies” (Bufe et al. 185). This

approach can save many adults and households from the psychological effects of income loss,

which is currently affecting many people globally.

Annotated Bibliography

Steinert, J. Building Financial Resilience in the Context of Deprivation: Experimental Evidence

from a Family Financial Literacy and Parenting Programme in South Africa. 2018, pp. 22–

270. https://ora.ox.ac.uk/objects/uuid:9cb3f7a0-b84a-4460-bb45-b26dccd57c9e

This dissertation was written in 2018, making it a reliable reference when discussing

matter related to recent financial activities at family levels. It also focuses on an existing program

which is Sinovuyo Caring Families and how it implicates family financial literacy in South

Africa (Steinert 131-7). This makes it ideal for illustrating the potential of financial literacy

program for homes and families in a bid to alleviate financial crisis and poverty at family levels.

Using of mixed-approach for data collection, the author collected relevant data suitable

for discussing the implication of the program and the respondents’ opinions and views towards

the program. The study uses questionnaires, interviews and focus groups to collect information

on relevant family-level income data like savings, debt, budget, financial literacy and stress

(Steinert 188). From the use of these methods, the results are reliable to be quoted by a literature

review paper of class research. The results reveal that the financial literacy program has positive

impact on family financial literacy thereby helping family overcome challenges like child

poverty and financial stress (Steinert 192). This study sets the foundation for further research on

interventions to help families to improve income levels, financial literacy and all the basic need.

Bufe, Sam, et al. “Financial Shocks and Financial Well-Being: What Builds Resiliency in Lower-

Income Households?” Social Indicators Research, Oct. 2021, pp. 181–87,

https://doi.org/10.1007/s11205-021-02828-y.

Commented [JP4]: Part 2 is complete, but APA format was not used.

The authors: Bufe, Roll, Kondratjeva, Skees, & Grinstein-Weiss, did a study in 2021

examining the implication of financial resilience and literacy in helping households survive the

effects of Covd-19 pandemic. To ensure information reliability and accuracy, the researchers

collected the data from 2020, the onset of the pandemic and evaluate data collected throughout

the year. The data was collected form TIAA Institute-GFLEC Personal Finance (P-Fin) Index, a

reliable source of financial data and economic data regarding household expenditures, debt and

saving decisions (Bufe et al. 182). The main focus was on adults with a major emphasis on their

financial attitude, literacy and behaviors in the moments of financial strains and stress.

According to the study “financial literacy levels are lower amongst females, younger

couples, disabled people, unemployed hence they tend to suffer form more financial anxiety and

other challenges (Bufe et al. 186).” Consequently, lower financial literacy and extravagance is

likely to lead to more financial anxiety and stress. From their study, it is also notable that

financial resilience is affected by one’s income, savings, debt and availability of financial

information or advice from expert sources (Bufe et al. 186). To ensure families are more capable

of handling financial struggles, there is a need to improve family financial literacy in the US

through various interventions like free financial advice and workshops.

Final Paper

Problem Analysis

Commented [JP5]: Use CTRL+Enter to insert a manual page break. This solves the problem of migratory text.

Commented [JP6]: Use APA format, not MLA format.

The American Household is currently dealing with financial stress, with more than half of

households feeling some financial strain. The COVID-19 pandemic exposed how bad the

problem is, as many faced financial difficulties leading to stress, depression and anxiety. Despite

having stable jobs, the income levels in America are still not enough to meet household needs,

and adults constantly deal with the challenge of limited finances. Most people blame the lack of

enough income to meet family needs. However, the lack of financial resilience is the major issue.

This has led to more family issues that parents must deal with.

Financial resilience calls for careful budgeting and financial practices to promote

financial conservation. It advocates for measures against extravagance and over-reliance on

salaried income for household needs. Due to the lack of financial resilience, most families

consistently contend with psychological issues originating from financial strains and limitations.

The psychological effects can lead to other consequences that affect other family members, like

the children who have to suffer due to their inability to get basic needs. Once a better percentage

of society, mainly households, suffers from psychological issues, then the entire nation is

affected directly or indirectly.

The problem persists in America despite statistics showing income increases, more job

opportunities and good economic performance. With all these policy measures, families ought to

be living good lives and having mental peace since they do not have to worry about finances.

However, that is not the case; the psychological effects are increasing, as indicated by many

adults seeking mental health services (McPhillips). Most victims mention financial challenges as

a direct or indirect cause of their condition. The issue of psychological effects persists because

Americans have not embraced the concepts of financial resilience.

Commented [JP7]: Cite.

Commented [JP8]: Thesis does establish a claim, but it could be more complex.

Commented [JP9]: Try to end the paragraph on your thesis.

Commented [JP10]: This paragraph needs citations.

Commented [JP11]: Watch for logical fallacies. This one is the slippery slope fallacy, where a cause and effect are connected without a sufficiently detailed causal chain.

Commented [JP12]: You cite this information but not the sentence that directly follows, making it seem like the “most victims mention” statement is made up. I know it isn’t. I know you’re just citing incorrectly, but it is critical for you to cite appropriately to avoid either plagiarizing or seeming to make up critical information in your essay.

Commented [JP13]: This analysis is largely disconnected from the facts that precede it. The analysis seems key to your argument, but it needs to be clearly connected to the ideas surrounding it. Here, you need to offer information about financial resilience and show how people suffering from financially induced psychological stress are displaying a lack of financial resilience.

The resilience calls for some financial practices and discipline to value controlled

spending. Instead, most families choose to live in large and extravagant ways when they have

capital without preparing for the uncertainties. When their income is affected, their financial

resilience is tested to the limit, and most end up suffering from issues like anxiety and stress.

Even with limited financial income, families should be able to support themselves and live

through tough financial conditions only if they make financial resilience part of their mindset and

lifestyle.

The effects of failing to embrace financial resilience are already evident, as indicated by

rising psychological issues. However, other effects may be diverse to affect other family

members. For instance, the kids may face challenges getting basic needs like proper medical care

and education when parents are facing financial stress (Steinert 19). Once the psychological

effects of financial strains set in a home, other issues like domestic violence and fights among

couples may likely rise, and children can be victims in such conditions. In the long run, the

psychological effects will spread to all families, including children, who ought to be protected.

Failure to meet basic needs like rent could also lead to homelessness, which is currently

on the rise in the US. This was evident by most families becoming homeless due to COVID-19,

which strained their living conditions of living (Bufe et al. 182). Due to the rising mental issues,

hospitals and medical systems are also likely to be overwhelmed dealing with the issue. As

household expenditures decline, the whole economy deals with the aftermath. Therefore, the

psychological dimensions of financial resilience are likely to affect the whole society if not dealt

with. Eventually, getting taxes will be an issue, and homelessness, loan defaults, mental health

access, and overreliance on debt will continue to rise.

Identified Solutions

Commented [JP14]: Avoid overly broad generalizations. This statement makes a sweeping generalization with no evidence to support it.

Commented [JP15]: By this point, the essay should be identifying what the elements of financial resilience are and showing how they apply in a variety of circumstances.

Commented [JP16]: Again, watch for logical fallacies. You need much longer causal chains to connect a rise in homelessness to a lack of financial resilience that people have some control over, as opposed to circumstances beyond their control.

Solving the problem is not much easier but requires multiple approaches. The focus is on

financial literacy and other positive financial practices amongst families. A study by Steiner (54)

showed that improved financial literacy among households in South Africa boosted financial

resilience since families learned how to deal with finances and persevere through hard times like

income crises. Family financial literacy programs encourage concepts like saving, investment,

budgeted spending and avoiding extravagance (Steinert 137). Eventually, families do not feel the

pain of sudden income declines and are unlikely to be affected by conditions like pandemics.

This could help many families in America deal with the current issues of lack of savings,

investment and extravagance. It could also help protect households from the shock of fluctuating

financial income and availability.

A study by Buffe et al. (186) shows that focusing on personal and household financial

literacy requires a coordinated approach among various players. This will include financial

institutions and lenders teaching their customers and media organizations and companies like

social media helping with information dissemination. The greatest effort is to ensure the

information reaches as many people, especially at the bottom level, through the help of social

services and community groups (Steiner 203). These groups, financial institutions, media and

other agencies will focus on teaching people about various issues related to financial resilience.

The first would be the impact of financial challenges on mental health, the benefits of good

financial practices on resilience and strategies on how to account for and spend income

(Rodgers). All these measures may take time to achieve the positive benefits, but they could have

a long-term impact on society.

The impact would help deal with psychological issues related to income uncertainties. It

would also restore stability in homes, especially those at risk of low income. The benefits can

Commented [JP17]: When you cite in a signal phrase, don’t repeat the information in the parenthetical citation.

Commented [JP18]: Good analysis.

Commented [JP19]: Remember to use the sandwich technique.

also lead to income stability, thereby boosting economic performance. Before achieving all these

benefits, there is a need for investment in such awareness programs. The reason such awareness

groups do not exist is due to financial challenges; therefore, the government, both state and

federal, must champion and fund the ventures. In other efforts, the government can collaborate

with financial institutions to help push these agendas, thereby helping households. The joint

effort is ideal for quick results. The result of such expenditures shall be recovered when

government expenditures on financial and household relief decline in the future.

Works Cited

Bufe, Sam, et al. “Financial Shocks and Financial Well-Being: What Builds Resiliency in Lower-

Income Households?” Social Indicators Research, Oct. 2021, pp. 181–87,

https://doi.org/10.1007/s11205-021-02828-y.

Commented [JP20]: Remember to include a conclusion that sums up all of the essay’s ideas.

Commented [JP21]: You needed to use APA format.

McPhillips, Deidre. “90% of US Adults Say the United States Is Experiencing a Mental Health Crisis,

CNN/KFF Poll Finds.” CNN, 5 Oct. 2022, edition.cnn.com/2022/10/05/health/cnn-kff-mental-

health-poll-wellness/index.html.

Rogers, Kristen. “How Pandemic Financial Stress Impacts Mental Health, and What We Can Do About

It.” CNN, 11 Aug. 2021, edition.cnn.com/2021/08/09/health/financial-stress-covid-pandemic-

effects-tips-wellness/index.html.

Steinert, J. Building Financial Resilience in the Context of Deprivation: Experimental Evidence from a

Family Financial Literacy and Parenting Programme in South Africa. 2018, pp. 22–270.

https://ora.ox.ac.uk/objects/uuid:9cb3f7a0-b84a-4460-bb45-b26dccd57c9e