Financial wellness is a hot topic that includes not only understanding how to manage money but also how to make wise financial decisions that can improve your overall well- being. Your disability benefit, just like other types of money, checks, or payments comes with little guidance on how best to manage it. Figuring out how to maximize this benefit in your life requires information and skills. Whether you have handled finances for yourself or your family for years or have recently taken charge of your money, here is a quick overview of basic money management to guide your habits, actions, and choices.
People with disabilities have different needs when it comes to finances. From physical therapy and specialized equipment to frequent doctor’s visits and medications, you may have all kinds of unique expenses to save and budget for. Financial planning will ensure that you can afford the level of care you require and maintain your quality of life no matter what unexpected events come your way. Here are some money management tips for developing a solid financial plan for your future.
5 money management tips for people with disabilities
- Understanding Different Forms of Money
Cash is probably the easiest form of money to recognize or spend. If you are relatively new to the United States, or are new to handling money, you should know that our legal currency includes $1, $2, $5, $10, $20, $50 and $100 bills and the 1¢, 5¢, 25¢, 50¢, and one-dollar coins. You probably haven’t seen the $2 bill or fifty cents and dollar coins as often but they are still circulating as legal tender. Of course, any amount of money can be written in the form of a check to be deposited as money in your bank account or cashed for bills and coins. And any amount of money (cash, checks, or payments) can also be deposited in a bank account either in person, at an ATM or electronically.
While not considered cash, other items that may be used for purchases or exchange include:
- Money Orders (available at various businesses, banks, the post office or check cashing establishments),
- Certified Checks (signed by you but the bank certifies that you have the money in an account to cover the check),
- Cashier’s Checks (issued directly from the bank and considered more secure than a certified check),
- Traveler’s Checks (most often used as a safe alternative to cash or credit cards when traveling outside the US but can also be used in the US),
- Setting a Budget for Spending and Saving
Here is the one skill related to money management that can make or break individual or family finances: Budgeting. When people don’t know where all their money goes or are upset that they don’t have enough money to take care of their obligations, the fault often lies in ignoring the budget process, which includes spending and saving.
- Handling Credit and Debt
Creating and maintaining good credit takes constant awareness and responsible practices with your finances. Every time you pay for something using a credit card or a loan, such as a car loan, or have an open account (such as utilities), you add information (like a new grade) to your credit history. If you are late or skip a payment that reflects negatively on your history and if you pay consistently on time it is reported as a positive. Any bankruptcies or judgments (such as child support obligations) reported in public records also figure into your information.
Your credit history is then put together in a report by three different credit bureaus: Experian, Equifax, and TransUnion. By law, you are entitled every 12 months to one free report from each of these organizations and should take advantage of that to ensure your credit history is accurate. You can gain access to these reports by going to AnnualCreditReport.com or by calling 1-877-322-8228.
- Planning For Emergencies
Having $400 or even $200 in a savings or emergency fund may sound impossible. Few people are able to save that much money each month. But setting up a plan to save something, even as small as $5 a week or $10 a month, can set you on the path to establishing that fund. And here is a little secret that might encourage you: People who begin to save even a little bit, are motivated to examine their budget to find even more ways to save money.
How much should people plan to have in an emergency fund? The answer is as much as you can. Sure it would be great to have enough money to pay all your bills for at least 3 months. But every little bit helps and adds up. If you don’t already have one, commit today to start one just to put you on the path towards financial success. Every dollar you commit to an emergency fund brings you one dollar closer to managing your money and life successfully.
- Adding To Your Income
Once you set up a budget, you have to carefully watch your spending to make sure you don’t spend more than you have each month. At some point, you might wonder if there is some way you can boost your income beyond your disability payment. Here are some ways you might want to investigate as possibilities for adding income to your monthly or yearly budget to help with expenses or setting up a healthy emergency fund.
- Reduce spending
Are there items in your budget that can be eliminated or the amount spent lowered? For example, can you save money on food by paying attention to specials, buying only items that are on sale, using coupons, or buying in bulk? Could you share some meals with others that would reduce waste or help stretch your food dollars? It takes some time to organize your grocery shopping and menu planning to cut your food budget but the rewards can be significant.
- Selling things
Maybe you can find a way to sell clothes, books, DVDs, games, toys, equipment and other items to add a little bit to your income. There are many different ways you can sell items in person or on the Internet from having or being part of a garage sale to posting items for sale on eBay, OfferUp, or CraigsList.
- Bartering
Bartering is trading goods and services for other goods or services without exchanging money. It can be as simple as trading babysitting for lawn service or as complicated as setting up a bartering bank where a group of people come together to exchange their talents, skills, or items. Because bartering is usually a personal transaction, it’s important that you and the person you are bartering with understand the expectations and critical details of the trade.
Whatever works best for you, make sure you work on improving your money management skills frequently as part of your plan to move beyond where you are today towards a better future.