Managing your finances is hard at the best of times but if you sustain an injury that means you can’t work, you’re in a really difficult situation. When you don’t have any money coming in and you aren’t able to do much, it might seem like it’s impossible to get by until you’re well enough to get back into work.
A lot of people really struggle after a serious injury because they feel that they have lost their direction and purpose and then they have the added stress of financial difficulty on top of that.
If you’re not careful, you can end up in some serious financial trouble and end up having to borrow a lot of money to cover your monthly expenses, and that’s never a position that you want to be in. But that doesn’t have to happen if you learn how to manage your money properly. Here’s how to handle your finances after a serious injury.
Check Your Entitlements
The first thing that you should do is check what money you’re entitled to in this situation because any extra money you can get will be a big help. You may be entitled to some paid sick leave at work so you should speak with your employer before you do anything else.
If you were involved in an accident of some kind, like a car accident, you might be entitled to some kind of compensation payout and that can be a real help when you’re trying to sort your finances out. Get in touch with a car accident lawyer right away and see if you have a case.
You may be able to win a good amount of money and get your medical bills paid for, which will make it so much easier to manage your money properly. These cases can take a while to go through so you need to get the process started as quickly as possible.
As well as compensation, you might be entitled to some kind of government assistance if your injuries mean that you are unable to work. It’s worth looking into because these payments will help you to cover all of your monthly essentials and take the pressure off a bit.
Review Your Finances
The next step is to work out exactly how much money you have and what you normally spend, so you need to do a complete review of your finances. Hopefully, you already have an emergency fund for situations like this (if you don’t, you need to learn how to save and start putting some money aside right away).
Check your emergency fund and see how much you have in there. If you don’t have one, things are going to be a lot harder. You also need to count up any money that you have in other accounts and work out exactly how much you have.
Next, you need to work out exactly what you’re spending each month. Write down a list of every single thing you spend, so that includes all of your monthly bills but also the coffee that you buy in the morning.
Even if it’s a tiny expense, it needs to go on the list because it all adds up. When you have a figure, you’ll be able to work out how long the money that you currently have will last you before you run out.
If you have enough money to last more than enough time for you to recover and get back into work, you don’t have a problem. However, if you’re likely to run out of money very soon, you need to start making some changes.
Adjust Your Budget
When you are working with a limited amount of money, you need to start adjusting your budget and cutting out those unnecessary expenses. If you’re really struggling, you could write yourself a bare bones budget and strip back everything apart from your monthly bills for rent, utilities, and food. But that’s quite drastic and it’s not always necessary anyway.
You do need to cut down on some of your spending, but you can still allow yourself a few luxuries from time to time. Monthly subscriptions are a big one that people forget about when they’re drawing up a budget but they really cause problems.
People forget that they’re paying for things like streaming services and it doesn’t seem like it’s that much money, but when you have 3 different ones, it starts to add up. It’s those kinds of monthly expenses that you should try to cut out for now.
As long as you follow these simple steps, you should be able to manage your finances properly and focus on your recovery. But if you aren’t sensible with your money, you’ll end up borrowing and that’s not where you want to be.