Experiencing a long-term disability or a serious illness is hard enough. Obviously, health must be put first. And any measures necessary to take in order to return to a state of well-being should be made priorities. However, there is another stress that comes with being unable to work due to an injury or illness. And that would be the blow to the wallet. It’s not just that many individuals who are unable to work are bringing in a lot less through their insurance claims. Some are unable to earn any money at all.
What to do in such a situation? How can one save money while there is lot less of it being earned? It’s not an easy transition. It’s important to discover where one stands financially, what his or her necessities are, what the goals are for the future and how to attain the necessary support. It’s also important to manage the money you do have as effectively as possible. Here are six ways to save money while you’re not working.
1. Seek lower interest rates. One obvious way to save money is to spend less of it. At the same time, it would help you to begin paying off the debts that you may currently owe. On CanadianLiving.com, Krystal Yee writes that you should “contact your creditors to negotiate a lower interest rate, and see if you qualify for deferments on any outstanding loans. If you were paying more than the minimum on any debts, cut back for the time being.”
2. Pay off your creditors. On Forbes.com, Katherine Pilnick suggests that you do yourself one better. If you can afford to pay off those credit cards, then go ahead and do so. Saving yourself from having to pay those high interest rates on your purchases will work wonders in rescuing your finances. “Depending on how much debt you have, this can require a financial commitment for months or even years,” she writes, “It’s important to keep at it until you’ve resolved your debts completely.”
3. Conserve your cash. Yee reminds us that, often, one doesn’t know how long he or she will be away from his or her job. It’s important, therefore, to create a budget. Being frugal is key. So avoiding the purchases of any unnecessary items will be very helpful. “It might be hard at first, but stretching your money as far as it can go will keep you from relying on credit cards or loans to get you through until your next job,” she encourages.
4. Build a rainy day fund. This tip falls under the “still working” category. Pilnick suggests that the best time to begin saving your money, for instances when you may not be able to work, is while you are still working. “A good emergency fund is enough to cover living expenses for at least three to six months,” she describes, “While growing this fund, keep up with minimum monthly payments on all of your debts. Then save for retirement.”
5. Apply for Employment Insurance. Falling under the “no longer working” category, this tip affirms the necessity to find a source of income while you’re unable to perform the duties of your job. To reiterate an earlier point, you may not know how long you’ll be away from work. Therefore, “when you qualify for EI, take advantage of it,” insists Yee, “even if you received a severance package, or think you have the savings in your bank account to get you through until your next job, truthfully, you just don’t know when that might be.”
6. Consider debt consolidation. Pilnick notes that this is a tip that can be especially helpful for those who are reaching their retirement ages. “Debt consolidation rolls all your debts and loans into one,” she explains, “It simplifies the repayment process and typically saves you money on interest and fees. Debt settlement, typically considered the better option, actually reduces the amount of money you owe. It can get you out of debt years earlier and save you thousands of dollars.”
At Independence Incorporated, we offer a new program called “Money Talks, and the Talk of Money”. It is designed to help our clients with financial management during bouts with injuries or illnesses. For more information, please don’t hesitate to contact me directly by calling 204-474-2228 or emailing firstname.lastname@example.org.