Common financial advice doesn’t always apply for those with low incomes, high out-of-pocket medical costs or disabilities that make working difficult—especially when it comes to debt, saving and investing. Consider these tips for saving when money is tight.
Debt
Any kind of debt should be a financial priority. In fact, if you have debt, a lot of other financial advice becomes less relevant—at least in the immediate future.
Debt can be managed with careful planning (see “Pay Off Debt Fast on Low Income” and “How to Pay Off Debt Fast Using the Stack Method”). However, there are circumstances when income is so low that this is impossible.
Know when to seek help, including filing for bankruptcy, or hiring debt counselors to help you settle debt or renegotiate interest rates. Make use of free financial advice offered by nonprofits or your employer before paying a financial advisor or counselor. There are also several ways to find help with medical bills.
Saving (even while receiving disability benefits)
Saving when you’re able to work full time is one thing (see lots of other resources for help there), but trying to save when you are unable or less able to work for health reasons is another. Saving when money is tight can feel impossible.
While it’s still important to understand your expenses and spending, making use of resources may become essential to survival. A big resource is the U.S. Social Security Administration’s disability assistance, either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). (Caring Voice may be able to help you navigate this. See “Disability FAQ” for more info.)
Additionally, SSA’s Ticket to Work program helps people using SSI or SSDI get back to work. They offer advice for getting work when you have compromised lung capacity, saving when your assets are capped, saving for an emergency while receiving SSI, and lots of other basic financial tips.
You may also be eligible for help with food costs, housing, loan forgiveness or health care assistance—maybe even your phone or Internet service. See a variety of services for low-income families here. Getting help with some basics can allow you to live within your means.
If you don’t qualify for government assistance but still can’t make ends meet, many nonprofit organizations may be able to help. Start by seeing what your community has to offer. Find a list of possibilities here.
Investing
Saving any possible money you don’t need now is important for having savings to retire with. You might think you don’t make enough money to save, but if you can set aside even $20 per paycheck, you’ll thank yourself later.
If possible, use “investing” as a predictable expense in your expense planning—alongside gas, food, housing, etc. Any extra money that comes your way—a tax refund, for example—should go straight into your savings or investment fund.
Seek out guidance (like this and this) for investing while earning a low income. Consider ways to make extra money if you need to.
Making change
Unfortunately, there are still many barriers to financial security in place for people with health issues. If you are frustrated by a lack of options, consider contacting organizations working toward change, such as the National Disability Institute. Participating in action can build meaningful connections, open doors and give you a sense of control over your situation.
This is part two of a three-part series on finance. See also, “Four questions to determine your financial savvy” and “Quick tips for pinching pennies.”