It’s challenging enough dealing with an accident or unexpected health condition that leads to a disability without having to figure out how manage your finances now that you can only work part time or not at all. However, there are five effective steps that you can take to get your finances in order fairly quickly.
Let’s take a look at how to get some money coming in and how to manage your money better:
1. Apply for financial assistance.
The first step to coping with your finances is to get some money flowing in as soon as possible and the best way to achieve this goal is to get some financial assistance.
So, see if you qualify for Social Security Disability Insurance (SSDI), Worker’s Compensation, or Disability Insurance.
- Social Security Disability Insurance (SSDI): Social Security Disability Insurance (SSDI), will pay you and eligible members of your family if you have worked long enough and paid your Social Security taxes. The benefits are paid out based on your financial needs. SSDI eligibility includes factors such as your age and the nature of your disability. You have to be under 65 years old and your disability has to be a serious condition officially recognized by the Social Security Administration.
- Workers Compensation: If the injury that caused the disability occurred due to an accident at work, you might be eligible for worker’s compensation. This form of insurance replaces your lost wages and provides medical benefits. In return for this insurance, you have to relinquish your right to sue your employer for a tort of negligence.
- Disability Insurance: This is insurance that provides periodic payments of your benefits if you are unable to work. It can replace from 45% to 65% of your gross income. The money is tax free if your illness prevents you from earning a living from your occupation.
2. Budget your money.
When creating a budget, either in a paper ledger, a spreadsheet or through software, there are a few ground rules you should follow to budget effectively.
- Do your best to stick to your plans on how much to spend and avoid the temptation to overspend. If you feel deprived, you can treat yourself now and again, but do it with reason rather than splurging.
- See if you can reduce some of your variable expenses.
- Avoid over-relying on your credit cards to make ends meet; only spend enough so that you can pay off your balances each month.
- Don’t count on expected windfalls to balance out your budget. For instance, if you’re expecting a large tax return, don’t spend more that month because you think you can re-balance your budget you receive your cash windfall.
3. Pay your bills on time.
A simple and effective way to take control of your finances is to pay your bills on time. This requires knowing when your bills are due so that you have the money available to take care of them. By paying your bills on time, you avoid late payment fees, reduce stress, and boost your credit score, which will improve your interest rate if you get credit cards in the future.
4. Acquire a practical financial education.
There are many ways of acquiring a practical financial education like attending a class at a community college or reading a book. Information is also available from the National Endowment for Financial Education (NEFE). Their online resources include non-commercial self-help websites. For instance, their website, Smart About Money (SAM) includes resources like online classes, discussion forums, articles about money saving tips, worksheets, quizzes, and calculators. They also have a YouTube channel called Spendster that helps you make better purchase decisions and a comprehensive financial guide called, Your Spending, Your Savings, Your Future.