Being out of work due to an injury can be a very stressful time. As you work to recover from your injury, you must also find a way to make ends meet without your regular income. However, there are some things you can do to adjust your spending habits and potentially also generate income for your family. These small changes could have a big impact on your financial situation during this challenging time. Consider the following money management tips when you are injured and out of work.
Find out How You are Spending Your Money
Whenever changes to your financial situation occur, it is a good idea to sit down and evaluate where you are currently spending money. There will always be essential expenses like food, housing, and transportation, but you are likely putting money toward unnecessary items as well. Study your most recent bank statements and create two lists of expenses. On the first list, note all necessary expenses. This would include your rent or mortgage, car payment, utilities, and grocery bills. Next, write down all of the unnecessary expenses over the last month. This could include anything from movie tickets to new clothes, even salon appointments.
Add up both lists and compare it to the amount of money you have in savings. When you are injured and out of work, there is likely a discrepancy between how much money you spend on average per month, and how much more you are bringing in or have in savings. The most important thing is that you have enough money to cover those necessary expenses. Now that you know how and where you are spending money, you can begin to create a financial plan for the future.
Create a New Budget
When you’ve been injured in a car accident, it can be hard to predict when things will be back to normal, both physically and financially. During this time, you may need to make some difficult financial decisions. After making a list of how you spend your money, and being aware of your current financial situation, it is time to create a budget, and, more importantly, stick to it!
As previously mentioned, you will have a set number of essential expenses. You certainly can’t live without food, shelter, and utilities. However, there are things you can do to cut corners on these necessary costs. For instance, you can choose to eat more home cooked meals, instead of take out, and you can purchase your food with coupons or shop sale items at the grocery store. You can also make a commitment to not waste water or electricity while at home. These small steps could help to lower your costs significantly over the next several months.
Next, decide which unnecessary expenses you can do without. While this is never enjoyable, it may be the only way to make ends meet while you are out of work. Some changes may be easier than you think. Rather than spending on movie tickets, you can wait until the movie is available through rental services. Instead of a daily five dollar latte, you can learn how to brew your favorite cup of coffee at home, for much less money. You may decide that some of these non-essential expenses are still too important to give up. In that case, put a limit to how much you can spend on that particular item over the course of the month. If you must buy new clothing, for example, set a maximum limit that will still work within your budget. Again, with any budget, the most important thing is to stick to it.
Find Extra Ways to Bring in Money
Living with no income coming in can be a stressful and scary time. While you may not be able to work your full time job while you are injured, you might be able to find other ways to bring in money. First, assess your physical health. Perhaps your current job is not physically demanding, but the commute is a struggle. You may be able to work from home and receive all, or most, of your existing paycheck. Perhaps an injury is keeping you from working a physically demanding job, but you may still have the ability to work from home. Check local job listings for remote jobs, and consider working from home as a customer service representative or a virtual assistant. These are often part time, and may come without benefits, but they may be just what you need to cover your expenses.
If working is not an option, consider other ways to generate money for your family. Look through your home for all unnecessary or unwanted items. You can sell these through a yard sale or on any of the online sales sites. Not only will you make some extra money, you’ll be decluttering your house in the process! You can offer your services as a house or pet sitter, as well, depending on your physical ability. If you have a talent for crafting or art, you may also be able to put that talent to use to generate additional income.
Avoid Maxing Out Your Credit Cards
In a financial pinch, many people rely on credit cards to help get by. This may be a helpful option to help pay for holidays or an unforeseen expense. Unfortunately, it may take months before you can return to work, or years until you receive a settlement from the insurance company. Credit cards should be seen as a short term solution, but your financial situation may be long term. Consider spending on your credit cards only when you know you’ll be able to pay off the bill when it arrives. If not, you could end up in a worse financial situation than you were before your injury.
Consider a Pre-Settlement Cash Advance
While you are out of work due to an injury, you do have another option for financial relief. A pre-settlement cash advance is a form of lawsuit funding designed to provide financial assistance while you wait for your personal injury case to settle. The money is not a loan, but rather a non-recourse investment in your case. The provider of the pre-settlement cash advance is simply buying the right to a portion of your settlement once it’s received. Often, this money is provided risk free, which means if you aren’t awarded a settlement, you owe nothing.
The process to qualify and apply for a pre-settlement cash advance is simple. If you have a pending personal injury case, you are working with an attorney, and you are at least 18 years old, you likely qualify for funding. To apply for lawsuit funding, contact the pre-settlement advance provider who will request basic information about your case from both you and your attorney. An underwriter then reviews the information and can provide you funding fast, often within 24 hours!
Making changes to your spending and budget is never easy, but often necessary when you are out of work due to an injury. These money management tips, however, will hopefully help to alleviate some of the stress of lost income. Start by looking at where you currently spend your money, and determine which of these purchases are necessary and which are not. Next, look to make small changes, like using less water or making your coffee at home. Look for ways to bring in additional money, whether through selling some of your unwanted items or by taking on small jobs, if you are physically able. Avoid maxing out your credit cards, but consider other types of funding, like a pre-settlement cash advance. Soon you will be on the road to recovery—both physically and financially.