budget

3 Essential Tips for Financial Planning When You Have a Disability

Having a disability is not quite as rare as many people think. In fact, about 14 percent of adults around the world have a disability of some kind. This includes people who have a physical, mental, intellectual, or sensory limitation at a mild, severe, or moderate level. Also, these disabilities could have happened at birth, in old age, or anywhere in between.

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One thing that remains consistent across all forms of disability, however, is that life generally costs more money for those who have them. Normal expenses such as medical care and food, as well as additional costs such as modified housing and assistive devices and technology, can put a major burden on those with disabilities. That’s why it’s essential to have a financial plan in place. If you have a disability, these three tips will help you prepare and form the financial skills it takes to live your best life, both now and in the future.

Consider Life Insurance

One of the first things you should do when planning your finances is to look into life insurance. If you get a policy that benefits your current situation, it could provide significantly for your family if you were to pass away unexpectedly. And life insurance can help cover things like medical expenses, funeral expenses, and lost income. Moreover, shopping for life insurance is fairly straightforward nowadays, as you can easily purchase it online and use online calculators to figure out the coverage you need.

Set a Budget

Much of your financial planning comes down to making a budget. Not only will your budget serve as a guideline for your spending and saving, the process of making a budget will teach you a lot about your financial situation and the steps you can take to grow. If you’re on a fixed income, start with how much you bring in each month. If you are able to work or already have a job, where does that put your monthly income?

Once you factor in your income, write down all of your expenses; include everything you can think of. This might include normal monthly expenses such as your mortgage payment, home and auto insurance, utilities, food, entertainment, gas, etc. Also, consider your medical expenses: How much do you spend on medical care, assistive devices, or any other medical-related expenses? Furthermore, include any credit card debt you want to pay off.

Once you get these basic costs on paper, see where you stand concerning your income and expenses. Then you can determine what you can cut (entertainment, miscellaneous items, etc,) if necessary. Also, be sure to research all your options when it comes to financial assistance.

Build an Emergency Fund

As it is with anyone, saving money is important when you have a disability. Once you figure out your budget, determine how much you can put away in savings. Building an emergency fund will create a safety net in the event that something unexpected happens — whether it’s a medical incident, major home or car repair, or any other kind of sudden expense. Decide on a set amount to put into a cash jar or savings account, and stick to it as close as you can.

There may be many expenses that come with a disability, but that doesn’t mean you can’t navigate them and make a plan that meets your needs and sets you up to be cared for later in life. Work through your finances and set a budget to guide you through your spending and saving. Find the best life insurance plan for you and your family, and start building an emergency fund today. Being financially prepared will help you overcome a lot of challenges and put you in a better position to live a fulfilling life.

 Written by Ed Carter

5 Tips For Holiday Shopping On A Budget

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

Shopping Blog Photo

The holiday season is upon us!  Avoid putting yourself in debt this holiday season by getting organized and developing a budget.  Here are 5 tips for holiday shopping that will keep you within a budget.

  1. Make A List

It’s always a good idea to create your shopping list ahead of time.  Write down who you are shopping for, what your budget will allow per person, and what you expect to buy.  Having an idea of what you’re looking for prevents impulse buying, and it’s a major time saver. Plus, you don’t want to forget to buy a present for little Timmy, whether he’s been naughty or nice this year.

  1. Develop a Budget

Take a look at your bank account and determine a realistic budget for yourself.  Once you have decided what you can afford to spend this holiday season, stick to your budget!  If you plan to spend $20 on a gift, only spend $20.  It’s easy to say, “What’s one of two more dollars?”  But if you spend a few more dollars on each person that money adds up and your budget has completely gone out the window.

  1. Shop With Debit Cards/Cash Instead of Credit Cards

Leave your credit cards at home and use cash or debit cards.  With a credit card it’s easy to just swipe now and worry about how to pay later.  Inevitably you’ll spend more than you intended and will be blindsided at the end of the month.  Using cash or debit cards forces you to be aware of how much you have left in your account and will help you stick to your budget.  Plus, you will avoid paying interest on your credit card bill.  The National Retail Federation predicts that the average American will spend $805 this holiday season.  If you charged all $805 to your credit card and only paid the $25 minimum monthly payment with an average annual percentage rate (APR) of 18% it would take you 45 months to payoff.  Over the course of those months, you would end up paying $1,107.70 instead of $805, meaning you paid an unnecessary $302.70 in interest. Definitely not worth it.

  1. Shop Early

Try to get your holiday shopping done as early as possible. Not only will you beat the chaos of the holiday rush but the extra time will allow you to shop wisely.  By giving yourself plenty of time to shop you get the luxury to compare prices and find deals on what you’re looking for.  Last minute shoppers are left with no choice but to buy regardless of the price.  Plan ahead so you don’t run out of time or money!

  1. Beware of “Deals” and “Sales”

Retailers are excellent at enticing shoppers and painting the picture of a “great deal.” While Black Friday and Cyber Monday sales may seem appealing (especially to a bargain hunter!) they don’t always save you the most money.  Retailers have been known to inflate original prices to make discounts seem larger than they really are.  They also make their sales seem like a one-time only deal but in reality offer the same discounts throughout the year. Don’t be fooled.

Follow these five helpful tips and give yourself the gift of enjoying the holiday season debt-free!

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

 

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.