Managing finances through illness

Finding out you or your partner are seriously ill or injured is a frightening time, and many other aspects of life must be put on hold as you focus on getting the right treatment. Unfortunately, ignoring your finances isn’t going to help.

If you can’t work, you will need to structure your finances so that you can continue to pay necessary living expenses, to keep life as normal as possible. You may also need access to funds to pay for treatment that is not covered by Medicare or your health insurer.

Many Apt advisers, myself included, work with the Cancer Council to provide pro bono services to help seriously ill people create a financial plan. And while we see the devastation illness can bring on so many levels, we also see how creating a financial plan can help individuals and families through the most difficult circumstances.

Being prepared is always best

When it comes to illness or injury, there is no better financial safety net than having the right protection in place. Your future income is your greatest asset, and it’s important that you protect it. Even if you are young, fit and healthy, injury or illness can strike anyone.

Many of us are relying on inadequate cover included in our superannuation, and in some cases, paying the same, or even more, than we would for the right cover. If you are in the fortunate position that you are not currently injured or ill, I strongly encourage you to take a look at our recommendations for finding the right income and life protection.

Generally speaking, you should also make sure you always keep enough money to cover six months’ living expenses on hand as an emergency fund.  That way, you can access this money quickly to cover emergency expenses, and then look at your options to liquidate assets or claim entitlements.

But what if it is too late? If, unfortunately, this is no longer an option for you, there are some steps you can take to make the most of your available funds:

Know your entitlements

While it can be hard to focus at a time like this, understanding what you are entitled to and making sure you access these entitlements is critical.

The first one, is of course, understanding your sick leave entitlements with your current employer. Your partner may also be able to access carer’s leave from their employer. Organisations must support you with the government-mandated entitlements as a minimum, but they may also offer additional support so it’s worth having the conversation early.

The next step is to contact your insurers and discuss your situation to get an understanding of exactly what is covered. This should include your health insurance and any personal insurances you have, alongside your superannuation fund, to find out what you are entitled to under any included premiums. It’s important to begin any claim proceedings as quickly as possible, as these can often take time to pay out.

If you cannot work for an extended period, you may also be entitled to government assistance, so it is worth exploring. as every little bit can help.  In some cases, you may also be eligible for early release of your superannuation, but don’t count on this as the circumstances are quite limited.

If you have a home loan or other credit facilities, talk to your providers now. Many of them offer hardship clauses that will enable you to reduce your payments while you are unable to earn an income. Other providers, like utility companies, may also offer some financial relief.

Revise your budget

It’s critical to understand your fixed and variable costs for the foreseeable future and look to where you can make savings with minimal impact. It can be hard to accurately determine your expenses with the addition of medical costs, but even a rough budget can provide a guide to help you start saving straight away.

Seek help

It really can help to have an expert in your corner. At Apt, we support clients who are facing a range of financial challenges, providing guidance and planning, while you focus on the more important battle – your health. It can take some of the pressure off during a difficult time and can help you execute a plan to reach the best possible financial outcomes for you and your family.

If you, or a loved one, is struggling emotionally you may also wish to seek support from a counselling service. You can contact Lifeline, 24 hours a day, on 13 11 14.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.