Managing Money with a Disability: Take Control of Your Financial Future

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Managing money is a fundamental part of life, but living with a disability or caring for someone who does can make this more of a challenge. Whether it be a physical, developmental, learning, or any other type of disability, many factors can make it more difficult for you to achieve or maintain a healthy financial standing.

Financial stability provides a platform from which you can build the life you want. Without it, the likelihood of you accumulating debt and living under its pressure increases. Bad financial habits and cycles are a downward spiral and the sooner you start to build good habits, the quicker you will be able to find the road to financial stability.

The above is a fairly generic insight that applies to almost everyone, but those living with a disability often face a different set of obstacles to achieving financial stability. What are these challenges and how can you manage your money more effectively despite them?

What are the challenges of managing money with a disability?

Those living with a disability can be financially disadvantaged in a number of ways. 

Limited Ability to Work Due to Health Conditions

Some disabilities can limit people’s ability to work or maintain employment. This has a profound impact on their financial standing because they may be completely or partly reliant on living allowances and benefit payments from the government.

Fear of Losing Benefits or Healthcare

Many programs that provide essential services for people with disabilities have income and resource limits. In the United States, SSDI and SSI recipients can earn a limited amount of money before their payments are reduced. In most states, people on Medicaid can only earn a small amount of money and cannot have more than $2000 in the bank. While there are programs that enable people with disabilities to work without losing Medicare and Medicaid (more on that later), they can be complex, and fear of making mistakes or losing benefits in error can make people hesitant to use them. 

Debt

Lower incomes increase the likelihood of accumulating debt, which is difficult to pay off if you don’t have disposable income or the ability to earn more.

Debt can also accumulate because of the extra costs associated with living with a disability. For example, the cost of care, equipment, and household bills, on top of all other essential goods and services, can tighten budgets and lead to a decreased standard of living.

Difficulty Understanding Money Management

Another challenge that people face, particularly those with learning and developmental disabilities, is a lack of understanding about money and the role it plays in life. For many, the process of money management is simple. But for others, it’s difficult to grasp and apply the concepts.

Many people with disabilities also struggle with a lack of financial independence because they’re reliant on the care and support of loved ones or social workers. This is not only challenging for the individual but also for the people around them.

Tips for Managing Money with a Disability

With the above challenges in mind, managing money effectively becomes ever more important to ensure that your finances enhance your standard of living rather than detract from it. Many people with disabilities don't know that there are ways to earn and save money without losing benefits such as SSDI and Medicaid. Yes, it's possible! Here are some tips to get you started.

1. Set up an ABLE account or special needs trust.

The first key to managing money with a disability is setting up a safe, legal way to have it. The best way to do that is to use an ABLE account, special needs trust, or both. 

ABLE accounts are tax-advantaged savings accounts that allow people with disabilities to save money without losing Medicaid or other benefits. You can save up to $100,000 in an ABLE account without losing SSI payments, and more while still keeping Medicaid. Friends and family can also contribute to your ABLE account. 

Special needs trusts are similar to an ABLE account, but managed by a family member or financial manager on your behalf. Funds placed in a special needs trust for you have no impact on your eligibility for benefits. Special needs trusts are more complicated to set up and require an attorney, but can provide additional protections. If you expect to receive a large amount of money, such as an inheritance or legal settlement, you should set up a special needs trust to protect your benefits eligibility. 

2. Work if you can. 

If you're on SSDI or SSI, you know it's hard to get by. Working, even a little, can improve your financial circumstances tremendously, with no risk to your benefits as long as you use an ABLE account and either stay under the Substantial Gainful Activity limit or use the Ticket to Work program. Many work-from-home jobs, such as customer service, don't even require a college degree, and can enable you to earn money in a comfortable environment while managing your symptoms.

3. Apply for every program that could increase your income or decrease your expenses.  

There are many programs and services for low-income people, some disability-specific and some not. Many are complicated, hard to access, or have waiting lists, but as the saying goes, you miss all the shots you don't take. If you're not working, your job is now “figuring out how to live as a disabled person,” so spend your days applying for programs for reduced rent, utilities, food, etc. We recommend the website How to Get On as a resource for finding many programs and opportunities you may not know about. 

4. Evaluate your expenses and create a budget.

This is a fundamental step in money management because it allows you to better understand what money is coming in and going out. Budgeting also allows you to identify areas of spending that are excessive or wasteful, helping to reduce your outgoings and give you more disposable income. 

5. Limit wasteful spending. 

Cutting down wasteful spending is important to reserve money that can be invested elsewhere to improve your standard of living or pay off debts. That’s not to say you can’t treat yourself or spend money on things that you want. But consider how much you spend on things that don’t really improve your life. Are you really using all those streaming services? Do you know what that random auto-pay bill is for? Small, forgotten subscriptions can add up.

6. Tackle short-term debt as soon as possible.

Debt can be a huge obstacle for anyone trying to achieve financial stability. It not only takes away your future income, but it also costs more the longer you have it because of interest added. Consider using a debt consolidation program to shift high-interest credit card debt to a low-interest loan, or if necessary, declare bankruptcy and start over. 

7. Build up savings.

This can be difficult, particularly if you’re on a low income or relying on support programs. However, putting savings to one side is one of the primary ways to achieve financial stability and improve your financial resilience in general. Savings act as protection for when things go wrong or unexpected bills land. They’re a safety net to ensure you don’t accrue debt unless absolutely necessary. If you still have high-interest debt to be paid off, however, you should aim to pay it off first before you start prioritizing saving.

8. Use money and time management apps to organize your life.

With the Greatness app's “Retiring Early” program, you can take a proactive approach to managing your finances and work towards achieving your financial goals. This tool provides personalized plans and insights that help you develop a consistent routine. By incorporating the Greatness app into your daily life, you can develop the habit of proactively managing your finances and ensuring a more secure future.

Managing money effectively is so important for everyone, even more so if you’re facing some financial obstacles because of your disability. You can learn more about money management from many sources online and these can help you to manage and improve your financial circumstances. Good luck!

Do you have strategies for money management as a disabled person?

Share them with our community in the comments.

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