Financial Resilience Simulator

Just like how we get annual check-ups for our physical health, our finances need regular check-ups too. This simulator is your personal financial stress test—a way to measure the strength and flexibility of your current savings plan. We’ll put your budget through a series of realistic ‘what-if’ scenarios to see how it holds up. You’ll discover exactly how solid your safety net is and get a personalized ‘workout plan’ to build up your financial muscle where it matters most.

How to Use the Calculator

1. Start with Your Financial Snapshot. Enter your current income, savings, and essential monthly expenses.
2. In the Scenario Selector, choose one of the financial crises you want to simulate. This will test your finances against a specific type of challenge.
3. Click the “Calculate My Financial Resilience” button to run the simulation.
4. The Emergency Fund Status gauge will show how many months of expenses your savings can cover.
5. If your emergency fund is depleted in the simulation, use the Recovery Plan section. Enter a realistic monthly amount you could save to see a personalized timeline for rebuilding your savings and getting back on track.

Key Financial Terms

• Emergency Fund: A savings account containing readily accessible cash reserved for financial emergencies, such as a job loss, medical crisis, or major home repair. The standard recommendation is to save enough to cover 3 to 6 months’ worth of essential living expenses. Its purpose is to prevent you from going into debt or liquidating long-term investments during a crisis.
• Essential Expenses: These are the costs of living that must be covered each month. They typically include housing (rent or mortgage), utilities, groceries, essential transportation (car payment, gas, public transit), insurance premiums, and minimum debt payments. These are prioritized over discretionary spending (like dining out or entertainment) during a financial hardship.
• Financial Resilience: A measure of how well an individual or household can cope with and recover from a financial shock. It is built not just on savings, but also on factors like having a manageable level of debt, a consistent budget, and adequate insurance coverage.
• Liquidity: How quickly an asset can be converted into cash without losing a significant amount of its value. An emergency fund in a savings account is highly liquid. Assets like real estate or retirement accounts are considered illiquid because they cannot be accessed quickly or without potential penalties.
• Monthly Surplus / Deficit: The result of subtracting your total monthly expenses from your total monthly take-home income. A surplus means you have money left over, which can be used for saving, investing, or paying down debt faster. A deficit means your expenses exceed your income, which is unsustainable and often leads to accumulating debt.
• Stress Test (Financial): A simulation designed to see how well a financial plan, budget, or investment portfolio holds up under unfavorable economic scenarios. This calculator performs a stress test on your personal finances by simulating events like job loss or a large, unexpected expense.

Financial Resilience Scenario

Use the Financial Resilience Simulator to input the following scenario to establish your baseline. This will be your starting point for the quiz questions that follow.

• Monthly Take-Home Pay: $4,000
• Current Emergency Fund Balance: $10,000
• Current Investment Portfolio Value: $20,000
• Monthly Housing Costs: $1,500
• Monthly Transportation Costs: $400
• Other Essential Bills: $600
• Student Loan Payments: $300

Select Scenario 3: Major Financial Hardship, then click “Calculate My Financial Resilience” and use the results to answer the following questions.