The purpose of this article is to discuss the importance of incorporating disability into every family’s financial planning. One unknown event, either due to a diagnosis, an injury, or simply a lengthy recovery, can dramatically alter the way you spend money within hours. It is difficult to think about, which is the reason it is so easy to put off. You create a budget for grocery shopping, school-related expenses, insurance premiums, birthday celebrations, car maintenance, and other emergencies. However, you cannot afford to forget to consider creating a budget for when you will likely never work again.
Disability planning does not mean you are hoping something bad happens to you; rather, it means you want to protect your current lifestyle.
Your Income Is The Basis For Your Entire Household
As you view your budget, virtually all categories depend upon one factor: your continued ability to earn income. Whether it is rent or mortgage payments, utilities, groceries, childcare costs, transportation costs, healthcare costs, or debt repayment, there is one common denominator, income.
In the event your income ceases to exist or decreases significantly (even if just temporarily), even a well-organized household can begin to experience significant pressure.
That is the primary reason disability planning should not be viewed separately from other important aspects of your family’s financial security. Rather than being viewed as a standalone concern, it should be incorporated into the same discussion with life insurance, emergency funds, retirement plans, and your family’s monthly debt obligations. It is another tool to maintain stability in your family while trying to stabilize your future.
Other Hidden Expenses Will Exist Beyond The Loss Of Earnings
Lost earnings are only half of the problem when you become unable to perform the duties required for employment. There are numerous additional expenses associated with health issues beyond lost income. These might include:
- Medical appointments and travel expenses related thereto
- Home modifications
- Increased childcare costs (if children require additional supervision)
- Specialized treatment services
- Paperwork for government agencies and attorneys
There are also emotional costs. Many families with a member who has been injured or disabled may feel guilt, overwhelm, or uncertainty regarding the best course of action for their loved ones. Additional stressors that family members may experience include caring for the individual(s) who are disabled or injured; managing household chores and errands, etc. Additionally, children in the household may pick up on the increased tension in the house and react accordingly.
Having a solid plan in place allows you to know where to go to address your concerns and develop solutions. A plan may involve assessing the availability of short term or long term disability coverage through an employer or private company; developing an emergency fund to help cover basic living expenses for a period of time; identifying professionals who specialize in helping individuals navigate the complexities of disability claims; and learning about local organizations or resources (such as Impact Disability Law) that assist families who are experiencing challenges during an incredibly difficult period of their lives.
Create Your Own Path To Financial Stability
You do not have to figure out everything right away. Begin by determining how many months your household could sustain itself without any income. Next, evaluate if you have access to short-term or long-term disability coverage through your job, a private insurance company, or other government entitlements. Finally, document all of your essential expenditures. Do not be afraid to itemize both necessary and discretionary spending in order to determine which expenses are non-negotiable during a financially challenging time. Disability planning is actually an expression of love and commitment.
