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Wednesday, March 16, 2016

How to short-term budget during a temporary work-related disability

By Matt Rhoney

An injury that occurred while on the job is always unexpected and often leaves many temporarily out-of-work employees feeling mental and physical pain as well as financial stress. Depending on the nature of the injury, a work related injury or illness can keep you from working for a week to even months. Any absence for work, for any length of time, can result in a major financial setback and many Americans are not financially prepared to deal with any time missed from work. 

Stay financially responsible and stop debt from growing

If you are suffering from a work-related injury that is keeping you from working, you are most likely eligible for Temporary Total Disability (TTD) Workers’ Compensation benefits. According to Hasner Law, TTD is a benefit that is paid if your doctor has taken you completely out of work or placed you on light work duty (but no light duty is available). Injured workers receiving TTD benefits typically receive two-thirds of an average weekly wage and depending on where you live, you may get up to hundreds of weeks of benefits until you’re able to return to work.

For many employees, their working wage is barely “liveable”, but if you become injured and receive workers’ compensation benefits, the financial stress can increase. While being injured and out of work can make the money situation even more difficult, there are ways to keep financially afloat during this temporary absence from work:

  • Create a budget: Once you get a good idea of how much you’ll be receiving in workers’ comp benefits, it’s important to create a short term budget immediately. Even if you think you’ll be out of work about a month or 2, it’s a smart idea to plan out a little further. For instance, if you are given the “go ahead” to return to work after a month and a half, you may not be able to work a 40-hour week. You’ll have to make allowances for a slow recovery and giving yourself time to return to work.
  • Make budget cuts: After you’ve figured out your short term budget, you’re likely to be overwhelmed by the number and you may even be in the negative. This is a good time to be realistic about making some cuts. The cuts don’t need to be forever, but they should be expenses that can be viewed as “unnecessary”.
For example, if you have a streaming service like Netflix and you have cable, ditch the most expensive. Another expense that people often waste money on is a gym membership. If you’re injured, it’s not likely that you’ll be able to workout at the gym anyway. Cancel your membership and work on the stretches your doctor prescribed. Be more mindful of your “excesses” and cut back where you can; you may find that you save hundreds of dollars each month.
  • Seek assistance if needed: Maybe you’re already living a financially simple lifestyle and have made as many cuts as possible. If you’re struggling to pay for heat or electricity or other living essentials, contact your local human services or community services office and see if you qualify for short-term energy assistance loans. If you are having a hard time paying for your student loans, due to your injury, you may be qualified to defer your loan until you are receiving more income. If you need assistance, don’t be afraid to ask around, there are usually several programs that help people who are temporarily experiencing economic hardship.

    Images: 1. 401K 2012/Flickr. "Helathcare costs", CC BY 2.0; 2. Tax Credits/Flickr, CC BY 2.0