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Five Tips for Stretching Your Money When You’re on Disability

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October 13, 2020


Five Tips for Stretching Your Money When You're on Disability

Making sure you've got enough money to pay the bills is always a challenge, but it can be especially difficult if you're on Social Security Disability. Payments are strictly timed, and they are likely to be less than what you're used to.

Whether you're temporarily disabled or you're settling into a new normal, it's extremely important to learn how to stretch your money. That way, you can worry less about how you're going to pay the bills and you can spend more time focusing on your health and well-being.

Know How It Is Going to Affect Your Taxes

Don't automatically assume that because you're collecting benefits you do not have to file taxes. For example, if you're collecting from an employer-provided long-term disability insurance policy, whether or not you're taxed will depend on who is paying the premiums. For example, if your employer pays any portion of the premium, that amount is taxed.

Even if your income isn't taxable, being on disability can affect your taxes in other ways. For example, you will not be able to claim medical deductions if you're receiving tax-free payments from a private disability insurance policy.

Because taxes can be so confusing, and the consequences of getting it wrong can be so dire, it's a good idea to schedule an appointment with a tax professional every year you file. That way, you can ensure everything is accurate and Uncle Sam won't come knocking on your door for more money.

Create a Budget

If you are having a hard time paying the bills, it can be tempting to bury your head in the sand and take things one day at a time. Although this may make you feel better in the short run, it won't help you in the long run.

It's much better to get real about your financial situation and create a budget. If you're struggling, use an online template to help.

All reoccurring items should be included. That includes monthly bills, but it also includes other recurring costs, like gas, groceries, and medication. It may also include things like entertainment and shopping, if these are things you do regularly.

Your budget will help you see exactly how much you have, where you're spending the most, and it can provide you with opportunities to save.

Look for Ways to Save

Not happy with how your budget turned out? There are many sneaky ways you can save money! A few things you can try include:

  • Look at ads and use coupons before going grocery shopping
  • Switch to a different cell phone plan
  • Bundle services, like cable and internet
  • Order smaller servings at restaurants
  • Make your own coffee and smoothies

Saving may also mean practicing restraint. For example, if there's something you want, instead of purchasing it right away, think about it for a few days. You may find that the feeling passes and you don't need that item after all.

Look for Other Programs That Can Help

Social Security Disability is a great program that can help you survive if you become injured, but it isn't the only program that can help. If you're still struggling to pay your bills, you may want to look for other programs that can help too.

For example, there are ways you can save on prescription costs, which includes applying for assistance. Many nonprofits are willing to help you pay as long as you meet their income requirements. You can also find programs that can help you pay for essential services, like heating your home, as well as food banks, rental assistance, and more.

Get a Part-Time Job

No matter how good you get at stretching your dollar, you may find that you're short, no matter how you crunch the numbers. If that's the case, don't automatically assume you're stuck. You can get a part-time job to make a little extra cash.

Just make sure you're careful about the part-time job you take. There are strict limits to how much you can work and how much you can make if you're also on disability. You can also find incentive programs that will continue paying your benefits while you're trained, if you want to get back into the workforce but can't return to your previous job.

Don't let money stress you out while you're on Social Security Disability! There are many things you can do to make the most of your payments so you can make sure you pay for everything you need as long as you're receiving benefits.

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About the author

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

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