Budgeting on a Disability Income

Disability income is a small percentage of a regular income. If you are coming off of a regular job, or if you simply don’t have proper budgeting habits, then perhaps I can help you. When you set up your budget, be sure to have all current bills and automatic withdrawals in front of you. Nothing is worse than an unexpected automatic withdrawal in the middle of a carefully-planned month.

1. Be honest with yourself. If you are in debt, shut the door, dim the lights and know that you and your spouse are the only people who have to know. Then tell yourself the truth. Are you several thousand dollars in debt? Record ALL of your debts, be they financial, physical (promised help with moving, etc.) or debts that you have owed to friends and family members. Even ten year old, remote debts that nobody remembers anymore. Have it all written down. Be honest with yourself and your spouse about how far you have to go to break even. Now, prioritize your debts from smallest amounts to greatest. Be sure to record monthly due dates for monthly payments or bills.

2. Cut down. Until your debts are all paid off, you’ll have to act like an adult and do without your luxuries. This is, after all, what growing up and self restraint is all about. You NEED groceries, gas and electricity. You DON’T need cable television, high-speed internet, text messaging or a new DVD player. Be realistic, and recognize where you may be spending like a little kid, i.e. “I want THAT now.”

3. Create a budget. Now that you have cut out all of your luxuries, construct a budget of your daily, weekly and monthly spending. Instead of buying cokes to go with your meals three times a day, buy a gallon or two of juice. It’s healthier and more cost effective. See if you can cut corners, and recognize if you do, in fact, need to spend more money on healthy, cost effective food rather than running out to a fast food restaurant twice a week. When you are done creating your budget, if you have any money left over from your disability check, do NOT spend it! Keep it in the bank (or withdraw it and keep it in a savings box) as a buffer. Unexpected expenses always come up and, at the beginning of the next month, if you still have some extra left over, you can treat yourself to a nice dinner out or a good movie as a reward for all of your frugality.

Some habits to avoid are: begging neighbors or family members for a loan, or going deeper into debt. Also, remember that disability checks did not exist seventy years ago, and most people worked through their aches and pains even if they didn’t want to. Keep in mind your level of sheer laziness, and be sure to not rob yourself of a fulfilling job or a decent income because you may feel too slovenly to get up in the morning. You are worth more than that.