Financial resilience in tough times
How to Invest with Confidence and Build Financial Resilience in Uncertain Times
Sarah Whitelock, Consumer Wealth Leader of Mercer (N.Z.) Limited, discusses how to invest with confidence and build financial resilience in uncertain times in her interview with InvestNow. Check out Sarah's interview below!
Q1: Sorted’s Money Month notes 44% of Kiwis lack an emergency fund. What’s your advice for someone starting from scratch to build a 3-6 month emergency fund, and can they still do this whilst having an eye towards investing for the future?
An emergency fund is an important safety net that can help when you have an unexpected expense or drop in revenue. It can also protect you from having to access investments, if you have them, potentially at a loss when the unexpected happens.
While it can feel overwhelming to think about putting extra money aside, starting small and being consistent can build a financial buffer relatively quickly. Setting up an automatic transfer of a small amount to your savings account on pay day is a great way to get your emergency fund off to a good start. To build your emergency fund, initially aim for three months of essential expenses and incrementally build towards a six-month buffer.
If possible, build your emergency fund and investments at the same time, if that is unachievable, focus on the emergency fund. If you’re fortunate to come into extra money, such as bonuses or tax refunds, you can also use this to give your emergency fund a boost. If you have your emergency fund sorted you can direct any extra money into investments, like KiwiSaver.
These small steps can give you peace of mind to invest with greater confidence knowing your expenses are covered when life throws the unexpected your way.
Q2: How do you define financial resilience for everyday Kiwis, and what does a resilient investment portfolio look like in practice? How can the investment industry support people in achieving both personal and portfolio-level resilience?
Financial resilience is about being able to handle life’s surprises, whether it is an unexpected bill or a downturn in the markets, without losing your footing or giving up on your goals.
Building financial resilience starts with your emergency fund, and, if you’re an investor, having a diverse investment portfolio with a mix of different types of assets that match how much risk you’re comfortable with. Regular reviews to check your portfolio lines up with your goals and focusing on steady, long-term growth instead of chasing quick wins are also practical ways to build your financial resilience.
The investment industry has a responsibility to help clients build their financial literacy by making financial education accessible and easy to understand. This includes explaining risk, how markets work, and the importance of diversification. Education supports personal resilience by helping people cut through the noise of short-term fluctuations and possible balance dips, and avoid potentially harmful knee-jerk reactions by keeping a focus on long-term goals and results. Education should also be supported by advice that reflects each person’s unique goals and circumstances. Mercer provides its members with free financial education and a range of user-friendly online tools, such as the Retirement Income Simulator and Fund Selector, to help with retirement planning.
Q3: Part of being financially resilient is managing the psychological barriers to saving and investing, which can impact financial decision-making. What practical tips do you have for retail investors to maintain disciplined investment habits?
The psychological side of investments and saving is often the hardest part. It is not just about the numbers; it is about the habits and mindset that keep you on track.
An effective step to help build a stronger money mindset is by automating your savings and investments. As well as setting aside a small amount for your emergency fund, automating an extra contribution to your KiwiSaver account or other fund can make a surprising difference to your balance over time. The most important thing is to get started.
Limiting your exposure to constant market news, especially when markets are falling, can help manage stress and uncertainty. Similarly, checking your KiwiSaver balance every day can cause unnecessary stress and lead to impulsive decisions.
Speaking with an appropriately authorised financial advisor is a great way to help build disciplined investment habits. They’re trained financial professionals who can help you toward reaching your financial goals and navigating market uncertainty and volatility.
At the end of the day, investing is about discipline and consistency, not quick wins. Building strong habits and sticking with them through market ups and downs is what will help set you up for long-term financial resilience.
Disclaimer: Any advice contained herein is of a general nature only and does not take into account the personal objectives, financial situation or needs of individual investors. It is important that you consider these matters, read the relevant Product Disclosure Statement for any product you are considering, and obtain advice from an appropriately qualified financial adviser before making any investment decision.
Source: InvestNow, “Manager’s Perspective – August 2025,” https://investnow.co.nz/managers-perspective-august-2025/.
