Managing finances can be especially challenging for individuals who have been disabled due to a car accident. This sudden change in circumstances can lead to financial strain and uncertainty. The good news is that there are ways you can effectively budget to help make this trying time a little more sustainable. Here are some tips you can use to help you budget while you recover.
1. Apply for Disability Benefits
When applying for disability benefits, you will need to fill out specific forms provided by the Social Security Administration. These forms will require detailed information about your medical condition and work history.
Having the proper medical documentation is crucial for a successful disability benefits claim. You will need to gather medical records, test results, and physician statements to support your application.
The approval process for disability benefits can vary, but it typically takes three to five months for a decision to be made. In some cases, the process may take longer if additional information is required.
2. Understand Your Disability Benefits
There are two main types of disability benefits available: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI is for individuals who have paid into the Social Security system through payroll taxes, while SSI is need-based.
The amount of disability benefits you can expect to receive will depend on various factors, including your work history and income level. The average monthly SSDI payment in 2021 is $1,277, while SSI payments vary by state. In addition to disability benefits, there may be other financial resources available to individuals with disabilities, such as Medicaid, Medicare, or housing assistance programs.
3. Create a Budget That Works for You
When budgeting on a limited income, it’s essential to prioritize essential expenses such as housing, utilities, food, and medical costs. These are the basic necessities that must be paid each month.
To reduce non-essential expenses, consider cutting back on discretionary spending like dining out, entertainment, or shopping. Small sacrifices can add up and help stretch your budget further. Evaluate your budget each month to determine where you may be spending too much. For example, bad windows can account for up to 25% of your energy costs. Proper insulation, lowering (or increasing) the temperature on the thermostat, and unplugging unused appliances can help to keep your home’s energy bill down.
Sticking to a budget can be challenging, but using tools like budgeting apps or spreadsheets can help you track your expenses and stay on target. Setting specific financial goals can also keep you motivated.
4. Keep Track of Medical Expenses
When you’re injured in a motor vehicle accident, it’s crucial to retain your medical records to use in your insurance claim or personal injury claim. Since 2019, personal injury claims have surged 97%. You can use the compensation you receive from your personal injury lawsuit to help pay for your medical costs. It will also make it clear to your insurance company that it was the motor vehicle accident that caused your injuries.
There are several options for reducing medical costs, such as exploring generic medication alternatives and utilizing urgent care centers, of which there are over 10,000 across the country. You can also negotiate payment plans with healthcare providers. It’s essential to advocate for yourself and seek out cost-saving opportunities.
Keeping track of medical bills and insurance claims can be overwhelming, but organizing your paperwork and creating a system for record-keeping can help you stay on top of your expenses. Consider setting up a designated folder or digital file for easy access.
For financial assistance with medical expenses, look into programs offered by hospitals, nonprofits, or government agencies. These resources can provide relief for costly treatments or procedures.
5. Seek Additional Support
Support groups can be a valuable resource for individuals on disability, offering emotional support, information-sharing, and community connection. Look for local or online support groups tailored to individuals with disabilities.
Accessing community resources can provide additional assistance with housing, transportation, food, or employment opportunities. Nonprofit organizations, government agencies, and religious institutions may offer programs to help individuals in need.
In the event of legal disputes or challenges related to disability benefits or a car accident, seek out legal resources specializing in disability law. These professionals can provide guidance on your rights and options for legal recourse.
6. Plan for the Future
Building an emergency fund is essential for handling unexpected expenses while on disability. Start by setting aside a small amount each month to gradually increase your savings over time.
Long-term financial planning is crucial for securing your future and ensuring financial stability. Consider opening a retirement account, exploring investment opportunities, or consulting with a financial advisor for personalized guidance.
If your vehicle was damaged in the car accident and is no longer drivable, consider selling it to free up funds for other pressing financial needs. The average motorist owns their car for about 8.4 years before it may need to be replaced, whether due to damage, age, or lifestyle changes. Evaluate your options and determine the best course of action for your situation. If your vehicle is still drivable but needs repairs, Way suggests that you can safely drive your car with the check engine light on for approximately 50 to 100 miles. Keep in mind that your insurance can help cover the cost of repairs as well.
7. Explore Employment Options
While receiving disability benefits, you may be allowed to work within specific limitations. The Social Security Administration has guidelines on allowable earnings and employment activities for individuals on disability.
Understanding the limitations on working while on disability is important to avoid jeopardizing your benefits or eligibility status. Consult with a disability advocate or legal professional for clarification on what you can and cannot do while on disability.
If full-time employment is not feasible, consider exploring part-time or remote work opportunities that accommodate your disability. Look for flexible positions or freelance work that align with your skills and abilities.
8. Navigate Your Insurance Claims
After a car accident, navigating insurance claims can be complex and overwhelming. Keep detailed records of the accident, including photos, witness statements, and police reports, to support your insurance claim.
As a disability recipient dealing with insurance companies, know your rights and advocate for fair treatment. Take notes during conversations, ask for everything in writing, and seek legal assistance if disputes arise.
In the event of a legal dispute with an insurance company, seek out resources for legal support and guidance. An experienced attorney can help you navigate the complexities of insurance claims and protect your rights as a disability recipient. About 95% of car accident claims are settled pre-trial, so you can feel confident knowing your case may not even need to go to court.
9. Seek Financial Counseling
Financial counseling can provide valuable guidance and support for individuals on disability, helping them navigate budgeting, debt management, and financial planning. A financial counselor can offer personalized advice tailored to your specific needs.
There are free or low-cost financial counseling services available through nonprofit organizations, government agencies, or community centers. Take advantage of these resources to gain insights into managing your finances effectively.
When seeking a financial counselor, look for someone with expertise in disability finance, a solid reputation, and a transparent fee structure. Establishing a positive and trust-based relationship with your counselor is essential for achieving your financial goals.
10. Staying Positive and Motivated
Maintaining a positive mindset while on disability can be challenging, but focusing on gratitude, self-care, and small victories can help shift your perspective. Practice mindfulness, seek support from loved ones, and engage in activities that bring you joy.
Self-care practices such as exercise, meditation, or hobbies can help alleviate stress and promote overall well-being. Taking care of your mental and physical health is crucial for navigating the challenges of disability and financial uncertainty.
To stay motivated to continue budgeting and planning for the future, set achievable goals, celebrate accomplishments, and visualize your long-term aspirations. Remember that progress takes time, and each small step forward is a step in the right direction.
