Just about every stage of life requires an understanding of your financial situation; when you go to college, get married, decide to buy a home, choose to have children, when you choose to retire, et cetera. However, most of us don’t take into consideration the possibility of becoming disabled and how this will play a major role in our finances. Let’s learn more about managing our finances while dealing with a disability!
Social Security Disability Insurance
When people become disabled, it’s recommended they check and see what their SSDI eligibility is going forward. Once you understand what your benefits are, you will need to account for that in your budget. There is also a trick when it comes to SSDI benefits and working. Most people assume you cannot work if you are receiving benefits. This isn’t quite true! You can test your work abilities but there are very specific guidelines to how much you can make without losing benefits. This is crucial when many disabled persons don’t receive enough to care for themselves and still need some sort of income to help. Do not assume you can make any specific amount. Speak with your disability lawyer to find out what the rules are around making any extra income while disabled!
Look at Your Budget
If you already have a budget then you need to review it. If you don’t have a budget, you must create one. It doesn’t matter how much money you have coming in from Social Security, a budget will help make everything easier for you to manage. It’s more important to budget when you feel as if you have little to nothing. Disabilities often create extra expenses rather than lessen them. If you don’t take the time to budget, you can find yourself struggling quickly.
Of course, you will be tracking your spending over your standard expenses. Rent/mortgage, utilities, transportation, and food are the usual main expenses that should be considered. You will also need to look at clothing, healthcare (insurance, co-pays, meds, medical aids), home maintenance, and entertainment. Entertainment is important because although you may be disabled, spending a little time enjoying an outing is vital for your mental health. If you never try to do anything fun, it can wear you down mentally and contribute to further health issues.
Once you see what your expenses are and what you are bringing in, don’t panic! It’s not uncommon to see your expenses higher than your disability income. Take a deep breath and look to see where you can cut back. Don’t start with your heavy hitters, such as healthcare and food. You need those to take care of yourself. Instead, start with your rent and utilities. Can you move into a smaller home or apartment that can help you save money? Can you eliminate pay-television and stream movies and television through the internet? If you have a mobile phone, can you get rid of your landline (or can you rid the mobile and keep the landline?) If you own your home, don’t rush to sell it just yet. Check with your lawyer first to be sure it will not harm your benefits.
Dip into Retirement
Depending on where you are in life and whether you were denied benefits, you may have to dip into retirement savings to maintain your life while disabled. This should only be a last resort and if you have enough saved to take care of yourself! If you are under 62, this is probably not the way you want to go. However, if you are 62 you can “retire” and apply for Social Security Insurance Benefits (not disability benefits). However, it will be greatly reduced! You can then dip into your own IRA/SAP/401k to supplement your needs.
If you find yourself still struggling with managing your finances, look to family and friends who will help you make sure bills are paid timely and that you are well within your means for living. It can be a difficult discussion to have but well worth it in the long run!