Saving Money For Expenses During an Illness

If the current COVID-19 pandemic isn’t proof enough, life can be very unpredictable.  Unfortunately, the economic impact is going to be felt for years to come.

 

Do you know how you would cope if you were suddenly unable to work due to accident or illness? You might think that it couldn’t happen to you, but the startling fact is that one in four of today’s 20-year-olds will have a long-term disability before they reach retirement.

 

There are many ways to cushion the impact of being unable to work, should it happen to you.  Here are some things you might want to consider.

 

Know where to get support

There are many reasons you might suddenly be unable to work, and this will determine where you can find support.

 

If you are too ill to work, then investigate what unemployment benefits you are entitled to receive. Any support may not cover all of your bills, but it can take off some of the pressure. If you have an accident for which someone else is at fault, for instance, you drive a truck and are involved in a collision, then you might be entitled to seek damages from the other driver, in that case, you would need to look for a reputable truck injury attorney who would work on your behalf.

Save up an emergency fund

List all of your essential outgoings for rent, credit card payments, food, insurance, travel, etc. Once you know your essential outgoings, try to put money into an emergency fund.

 

You should aim to save enough money to cover you for a minimum of three months. Ideally, it should be more than this, as much as 12 if you can afford it.

 

Don’t touch the money or keep it with other savings.  It is for one use only.  Try and find an account that you can access quickly if you need to, but has a good rate of interest.

 

Reduce unnecessary spending

It’s a good bet that once you’ve looked at your expenses for your budget, you’ve found a lot of things you don’t need.

 

Get rid of any subscriptions you don’t use anymore, use a price comparison site to get the best deals on energy, insurance, and cellphones.  It’s amazing how much you can save by making these simple changes.

 

$10 a month here and there can save you hundreds over the year.  This is money you could be saving in your emergency fund. There are many great ways to save money that you might want to look into:

 

Coupons
Meal planning and batch cooking
Bulk buying certain products
Using cash-back sites

 

It’s important not to bury your head in the sand over your spending.  Keep track of it with a spreadsheet or an app you can use directly from your phone.

 

Insurance coverage

Insurance is expensive, that’s true, but usually not as expensive as not having it.  It’s not only medical insurance that you’ll need- you should look into accident insurance, critical illness cover, debt protection, and disability coverage.

 

 

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Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) http://www.accountingaccidentally.com/

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