Managing Your Finances When an Injury Prevents You from Working
Most of us don’t live our lives worrying about what we’d do if we got hurt and couldn’t work. After all, you could drive yourself crazy focusing on all the bad things that could happen.
Unfortunately, however, injuries that prevent people from working are far more common than most of us realize. The U.S. government estimates that by the time workers reach retirement age, one of every four will suffer from a disability that prevents them from working for at least a year.
A year. Think about how hard it can be to make up for lost income when you take an extra day or two off for vacation. Then extend that hundreds of times. How can you manage your finances?
We wish we could refer you to the magic income fairy. While we, unfortunately, cannot, there are some strategies for handling your financial needs when an injury prevents you from working.
Replacing Lost Income
When you can’t work because you’re hurt, you can help your financial situation with two main types of strategies. First, you can look for means of replacing the income you’re losing due to the inability to work. Second, you find ways to trim or manage your spending during the time when you can’t work. We’ll start with income.
Find Out Whether You’re Eligible for Disability Benefits Through Your Employer
Many employees are covered by short and long-term disability insurance through their employers. You might also have accident coverage. These programs often pay a percentage of your income while you are recovering. There may be a limit on the time you can receive benefits, but these policies can go a long way toward making up for your lost income.
If an Injury Occurred at Work, File for Workers’ Compensation Benefits
Most employers are required to carry workers’ compensation coverage. This type of insurance provides income and medical benefits to employees injured on the job. The injury does not need to be connected with a dangerous activity to be eligible for coverage. If you suffer back injuries while reaching down to file papers, for instance, you should be able to receive medical benefits to handle medical needs and income benefits to make up for a percentage of your lost wages.
Workers’ compensation insurers are notorious for denying claims even when they are valid. If you notify your employer and seek benefits but receive a denial, a workers’ compensation attorney could help you appeal the decision and get retroactive and future benefits.
Investigate Government Benefits
If you are unable to work because of disability for a year or more, you could be eligible to receive benefits through the Social Security Disability Insurance program or the Supplemental Security Income program. You need to prove that your disability prevents you from working in any gainful employment, and you also need to meet other eligibility requirements. The government denies many disability claims, but you can appeal denials and request a hearing before an administrative judge.
Consider Legal Action
If your injury was caused by someone else’s negligence, you could recover compensation through a personal injury lawsuit. Negligence refers to irresponsible action.
For instance, if you were hurt in a car accident because a driver was texting instead of paying attention to the road, that driver would be liable for the accident, and their insurance should provide compensation to make up for the wages you lose while you cannot work. In addition, you could receive compensation for medical bills and the overall harm caused to your life, such as pain, suffering, emotional distress, and lost opportunities.
Reducing and Managing Expenses
Cutting back on expenses can be a challenge. You can’t decide to save money by not eating. However, you can record your spending habits and see where it might be possible to make some temporary reductions. For instance, you might change your cell phone plan or forgo your favorite brands in favor of the store brand.
You might also be able to defer payment on certain debts while you are unable to work. It is a good idea to check with lenders and credit card companies to see what forms of relief you may qualify for. At the same time, you should investigate sources that provide assistance with payments during emergencies. For short-term relief, check with local help centers. For assistance in the long-term, you can apply for programs such as the Supplemental Assistance Program and the Low Income Home Energy Assistance Program.
Don’t Be Afraid to Explore All Your Options
Many people are embarrassed when they are unable to work. We often equate work with self-worth. Admitting you need help managing your expenses can seem like admitting defeat.
Ignoring the challenges will only make them worse, however. To protect yourself, it is a good idea to explore all available options for making up income and managing expenses. And remember that a denial is often not the final word but only a stage you need to pass through before you succeed.