Financial risk is an integral part of most of our lives – we do our best to save, to take precautions, and to be prepared in the event that a problem arises. However, unlike the kinds of mistakes that arise from poor business priorities, things like personal injury are often out of our control. While there are some formal avenues for dealing with financial losses caused by such incidents, sometimes you need to take forward thinking steps to protect your finances after an accident. Here are 4 ways to protect yourself.
On The Job Compensation
Did you injury occur on the job? If so, you are likely eligible for workers compensation payments. Workers comp payments come in a few forms, including general payments that cover lost wages and pain and suffering, while special payments also covering things like the associated medical costs of an injury.
Depending on the severity and permanence of the injury, you’ll also receive differing amounts of money. A young person who is badly injured on the job will obviously experience greater lost income over the years than an older person and therefore is eligible for a larger worker’s comp payment.
While you can’t know that an injury is coming, there are a few things you can do to decrease the overall financial ramifications of such an incident. If you are married, your spouse should know your financial passwords if your accounts aren’t fully integrated. If you feel comfortable and it’s possible, you should fully combine your accounts for ease of access. You must account for injuries that will impair your ability to communicate in this way.
Similarly, when faced with medical bills, always make sure that you assume the time between injury and determination of a workers comp payment will be longer rather than shorter. You should be able to pay the minimum amounts due on bills without that payment for an extended period of time, as it can take quite a while to reach a settlement.
Get Tax Help
Another arena where you can save money in the event of an accident is through tax deductions. Because these aren’t standard deductions, many people who do their taxes themselves don’t know about them. One of the complications of this is that medical deductions need to be itemized and very few taxpayers – only about ten percent – itemize their expenses and receipts. Furthermore, your medical expenses have to be more than 10% of your adjusted gross income, so it will take a fairly significant injury for your costs to be eligible.
Always consult with a tax professional in the wake of an injury, as they can also advise you about setting up a Health Savings Account or other health related fund to manage your finances. Flexible spending accounts can also be a help during this time.
If you are permanently injured or injured for an extended period of time during which you are unable to work, you may also qualify for Social Security Disability payments. However, with SSDI you can’t earn more than $1090 a month and your savings is limited. This can be more damaging than the injury itself, especially if you have a spouse who is earning money.
Achieving financial stability can be difficult after a significant injury, but it can be done. Always ask everyone from doctors to your employer about what you can do to protect yourself and your family after an injury. There are resources out there, but if you don’t ask you won’t receive.