Everyone makes plans for the future but isn’t life unpredictable? People thriving in their careers become victims of chronic illnesses. Some get diagnosed with heart disease after reaching a certain age, whereas others have diabetes. These chronic illnesses demand constant monitoring and regular treatments. That means you have to visit the doctor once a month and often spend on costly medications.
Now, the question is how to manage your illness while securing your financial future? Many people dig into their savings to get treatment, which depletes their wealth. Therefore, you have to find ways to reduce the impact of health concerns on your finances. For that, you can get health and life insurance to get compensation for all medical bills. Similarly, review your investment strategy to ensure you are earning the highest potential gains.
Having a few strategies to manage health will reduce the emotional and financial toll of living with a chronic disease. Here we have highlighted six wealth management tips for those living with a chronic illness.
Table of Contents
1. Protect Yourself Financially
When it comes to financial protection, insurance is the best choice available. Anyone suffering from a chronic illness should get health insurance. It provides coverage through an employer or other group. Otherwise, you can also purchase the coverage individually through the federal exchange. However, ensure to choose the package that offers needful compensation.
Most companies don’t compensate for chronic illnesses like cancer or asbestos-related diseases. Thus, ensure the insurance company is willing to pay for mesothelioma, pleural disease, lung cancer, etc. But it’s worthwhile to learn more about settlement options by searching for a specific chronic illness.
Besides this, life insurance could be another incredible option. It will protect everyone dependent on you financially. Depending on your chronic illness, you can consult a financial advisor to determine how much coverage you need.
2. Stay Out of Debt
Most Americans owe thousands of dollars in loans. Some carry their student loans forever, whereas others are stuck between mortgage payments and credit card bills. Unfortunately, this debt consumes a massive chunk of your income. And if you end up with a chronic illness, managing debt with medical bills will become impossible. But, it’s never too late to get out of the debt trap.
Firstly, start to figure out what and how much money you owe. Likewise, think of the expenses you can slack down to repay your debts. Secondly, stop using your credit cards and start using cash. Reducing reliance on credit will give you a better understanding of your financial situation, allowing you to manage money better. Lastly, try to improve your credit score. It will help you land a better insurance policy rate, ensuring stable premiums.
3. Build Your Cash Flow
Most people don’t keep track of their money, failing to understand how much money is going in and out every month. It creates financial uncertainty and makes it arduous to pay medical bills. Hence, you have to focus on maintaining a positive cash flow. You can start a side hustle, a secondary income stream to earn some extra bucks.
Similarly, you can also take up part-time jobs to earn additional income. Some people also turn their hobbies into a business and make significant money. For instance, if you like to paint, think about hosting an art exhibition to sell your paintings. Additional income will help you pay for treatments and build up savings.
However, consider adjusting your current income and expenses if you don’t have a second income. Perhaps, you can unsubscribe from the services you don’t use or rent out the spare room. Also, rethink your food choices to ensure you are not spending a lot of money. Making small lifestyle changes can instantly improve cashflows and help you manage wealth.
4. Review Your Investment Strategy
As the chronic illness progresses, your risk appetite and tolerance level also change. Therefore, don’t forget to update your investment strategy. People sometimes want to increase their liquidity in the short term because they need more cash for the treatments. As a result, investing in money market instruments seems viable. After all, these securities are readily convertible to cash without any potential losses.
Moreover, young people suffering from chronic diseases will have a different approach. Instead of earning passive income, they want to switch to an aggressive strategy to make the most out of their time horizon. Besides this, investors should also consider how long they can work. Suppose someone has to retire early because of their medical condition. In that case, they might have to adopt a long-term investment strategy. It will provide stable gains over the years.
5. Create an Emergency Fund
Unfortunately, emergencies don’t come after ringing a bell, leaving you with no time to prepare. Therefore, experts recommend that people set aside enough money to cover six months of living expenses. And there’s no need to set aside as much as your monthly budget; only substantial enough to cover the essentials. Having some money aside will allow you to pay for medical bills without draining your savings. In addition to financial security, having some extra cash in an emergency fund will give you peace of mind.
So, the question is how to create an emergency fund? Set aside a small chunk of your income. It could be anywhere between 5%-50%, depending on your saving potential.
6. Protect Your Wealth
Another part of wealth management is protecting what you have by laying some groundwork. You might seek help from a lawyer or a financial advisor to help you plan everything. For starters, create a document explaining to others how to manage your financial goals if you become incapacitated. It will ensure effective money management in your absence.
Furthermore, get your medical paperwork ready. These documents will speak on your behalf, telling your loved ones what care you want to receive. Lastly, you can seek help from a reliable trust. They will protect your resources, including insurance benefits.
Truthfully, suffering from a chronic illness is a challenge, and the added financial burden worsens it. But luckily, you can take control and manage your wealth and disease smartly. You have to protect your health by getting health insurance, developing a strategic investment plan, and building your cash flow. In addition, you also have to make a few lifestyle changes to secure your financial future and health.