How to handle a major financial disruption

first_img 27SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr When Eric McClain had a new baby on the way in 2008, he found himself unemployed and in the middle of a home renovation. “This was just as the financial crisis was starting,” McClain says, which only added to his stress. The unemployment was unexpected, due to a bad fit with a new employer, and it took him about two months to find a new temporary job.“I had to break all the rules: ‘Don’t take money out of this account.’ ‘Don’t let debt run up,’” says McClain, who is a financial planner. He emptied out a 529 college savings account and ran up some debt in order to get his family through that tough period. After about 10 months at the temporary job, he found a new position at a financial firm and now co-owns a McClain Lovejoy Financial Planning in Birmingham, Alabama. “Today, things are so much better,” he says.Unexpected financial stress can wreak havoc on your bank account, not to mention emotional well-being, but it’s a relatively common experience. According TD Ameritrade’s 2015 Financial Disruptions Survey, which included over 2,000 respondents, two-thirds of Americans have experienced a major disruption to their retirement plans, the most common being losing a job or being forced to take a lower-paying one.“Just because you suffered through a disruption doesn’t mean you’re immune to another one, so it’s critical to have a plan,” says Matt Sadowsky, ​director of retirement and annuities for TD Ameritrade. ​Home expenses, bad investments, supporting needy family members, accidents and divorce were also among the causes of financial disruptions, which respondents said had a negative effect on their long-term financial plans. continue reading »last_img


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