It is a good idea to have at least a rough Financial plan in place at all times. The plan should have clear goals while also remaining flexible enough to allow you to reach them in a realistic manner. Let’s take a look at some financial disasters that could disrupt your financial plan and how you can mitigate any ensuing fiscal damage.
A Job Loss
Losing your job can be a significant financial blow for yourself and for your family. This may be especially true if it was the only source of income or if you don’t have an emergency fund to rely on.
Fortunately, it may be possible to make money working in the gig economy until you are able to find another job in your field.
Gig work may also be ideal because you can create a schedule that best meets your needs. If you have any teenagers in the house, it may be necessary for them to find work to help pay for their own incidental costs.
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Marital assets can include the home, retirement savings and pensions, vehicles, and pretty much anything else of value you own.
Therefore, losing half of your assets in a divorce settlement could have a negative impact on your finances both now and over the long-term. In some cases, you may have to either delay retirement or go back to work to make ends meet.
However, it is important that you continue to contribute to a retirement account regardless of how old you are. In almost all situations, doing so can help to secure a relatively secure retirement.
Unexpected Medical Expenses
Even if you have health insurance, it may be difficult to pay for trips to the doctor, a surgical procedure, or prescription medication. It may be possible to save money by using generic medications or by enrolling in a health insurance plan run by your state government.
Financial assistance may be available if your children are the ones who get sick suddenly. Your employer may be liable for paying lost wages or other damages if the illness was caused by exposure to chemicals or other harmful materials.
The Economy Slows Down
An economic downturn could have many different consequences for your long-term financial plan. For instance, it may make it harder to rent out your home or harder to charge your preferred rental rate. If the stock market goes down in value, the value of your IRA or 401(k) may also go down. You can help to guard against market reversals by diversifying your portfolio as much as possible.
It is important that you constantly review your financial plan and look for ways to secure your financial future and avoid financial disaster. While you always want to hope for the best, being prepared for the worst can help you guard against losing everything that you own. If you need help creating a financial plan, a financial advisor may be able to help you get started.
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