Uh, oh. That nagging shoulder pain turns out to be a torn rotator cuff, and now you need surgery. Even worse, your doctor says you have to be out of work for six weeks! What’s that going to do to your finances?
Luckily, there are several ways to stay “in the black” while you’re out with a disability.
1. Make sure you’re insured. Disability insurance can be a lifeline for your financial obligations. It pays a portion of your regular income until you get back to work.
2.Save up, if you can. Most disability policies replace only about 60% of your regular income. That could be tough to get by on, especially since many reasons for disability leave create extra expenses.
So if you’re going out on maternity leave or having surgery you can delay, start putting money away as soon as you can. One easy way to boost your savings: bank any unexpected income, like tax returns or that birthday check from Grandma.
(If you have an individual disability policy, that 60% percent might go a lot further than you think. That’s because you typically don’t have to pay taxes on the payments. Consult your tax advisor about your specific situation.)
3. Make some spending changes. Unexpected accidents and serious illnesses present a more difficult challenge. A recent survey by National Public Radio’s Marketplace showed that 58% of Americans would have trouble coming up with $1,000 to pay for an emergency expense. If that describes you, you might need to cut back on spending until your regular paycheck starts again.
Also on WorkWell:
Here are some relatively painless things you can do to protect your bank account:
- Cut your food costs. If you eat out at restaurants twice a week, cooking at home can save you up to $350 per month for a family of four. Many budget experts suggest using your crockery cooker to prepare meals in the morning. That way you won’t be tempted to eat dinner out at the end of a long, tiring day. And if you do eat out, try bringing half your meal home. Restaurant portions are often much larger than home-cooked, and then you’ll have lunch for tomorrow! Another tip if you like to entertain: potluck suppers can be just as fun as dinner parties.
- Watch your energy usage. Be extra vigilant about wasting energy while you’re off work. Turn off lights when you’re not in the room, and unplug appliances you’re not using. According to the Department of Energy, installing a programmable thermostat can save you up to 15% on your heating/cooling bill.
- Make budgeting fun. Like everything else, there’s an app for saving money. Try Mint or You Need a Budget and see how satisfying it can be to squeeze the most from every dollar. You might pick up some habits that you’ll keep up even after you get back to work!
For more money saving tips, visit U.S. News & World Report’s Frugal Shopper blog