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Financial vulnerability essentially describes the likelihood that you could be derailed on a financial basis by unexpected events, poor money management and other issues. Even the seemingly wealthiest individuals can be financially vulnerable. After all, we have all heard stories about very wealthy people who have foolishly spent all of their funds, and we have also heard about very low-income people who have amassed a small fortune through frugality and excellent savings habits. Because all people can be financially vulnerable in various situations, it is important to take stock of your finances and to actively improve in this area on a regular basis.