Your Guide to Managing Finances
Carefully managing your finances is important for everyone. But for people living with lupus, high healthcare costs and the impact lupus can have on a person’s ability to work can be additional sources of financial stress and make it difficult to budget.
If you have lupus — or help manage finances for a loved one with lupus — there are steps you can take to set up a budget, plan for unexpected expenses, and find guidance to help make managing finances easier.
Collecting and reviewing information
The first step to healthy financial management is getting the full picture of your assets (things you have of value), debts (money you owe), bills and expenses, and other key financial details. Looking at all your financial information can help you identify if there are any urgent issues that need to be addressed.
Gather information on:
- Assets, including physical property that’s owned outright (like a house, land, or a vehicle) or investment holdings (like stocks, bonds, or mutual funds)
- Bills, such as for utilities, car insurance, or entertainment services
- Bank account statements
- Credit card statements
- Debts, including mortgage, auto, student, business, or personal loans
- Tax information
If you’re helping a loved one with their finances, ask them to help you gather the information. Then, schedule a time when you can review everything together.
Creating a budget
Setting and sticking to a budget can help you or your loved one avoid overspending, pay down debts, plan for emergencies, and avoid financial surprises.
There are many different ways to set a budget, but in any budget, it’s important to set clear, realistic goals for spending and saving.
A budgeting plan that some people use is the “50/30/20” plan. It means spending up to 50 percent of your income on things you need, like housing or groceries, 30 percent on things you want, like eating out or event tickets, and 20 percent on savings and paying down debt, like for an emergency fund or paying off medical bills. You can use a free online calculator to help you figure out how much 50, 30, and 20 percent of your income is.
The 50/30/20 plan can be a good place to start with a budget, but it might not fit for every person or every situation. For example, if you live in an area with a higher-than-average cost of living, or if you have medical debt, you might need to set aside more of your budget toward those expenses and lower your spending in other areas.
There are plenty of methods and tools to help you plan a budget for yourself or your loved one — including:
- Writing out a budget with pen and paper
- Creating a detailed budget spreadsheet on a computer
- Using a free app, such as GoodBudget or PocketGuard
Planning for financial emergencies
Building up an emergency fund is an important step to take toward feeling financially secure. And it’s especially key for people with lupus, since it’s possible that a medical emergency could cause a sudden, unexpected financial hardship. An emergency fund can also help if you lose your job or have to pay for an unexpected car or home repair. And it can help you avoid using other methods to cover those costs, like using credit cards or getting a short-term loan.
Most financial experts recommend saving enough to cover basic living expenses for 3 months or more. Basic living expenses include money for:
- Rent or mortgage payments
- Groceries
- Utilities
- Insurance premiums
- Transportation costs, like a bus pass, car payment, or gas
For many people, having medical expenses can make saving difficult. Additionally, saving 3 months of expenses is very challenging — especially if you live in an expensive area, are trying to pay down debt, or are financially responsible for children or other family members. If saving 3 months of expenses feels overwhelming, know that you’re not alone. If you can, start by trying to save a smaller amount — whatever you’re able to — and then build your fund up slowly from there.
If you or your loved one find yourself in a financial emergency, it’s important to:
- Assess the cost of the emergency. For example, consider if the emergency is a one-time expense, like a medical bill, or ongoing, like losing a job. Is there an emergency fund in place? Are there assets that could be sold, if needed?
- Review and prioritize expenses. Determine the amount needed to cover basic expenses and see if it’s possible to cut back on non-essential spending.
- Pull from an emergency fund, if available. If you or your loved one have money set aside, use it to cover basic expenses.
- Use short- or long-term disability insurance. Depending on the type of financial emergency and whether you or your loved one are insured, you might be able to use short- or long-term disability benefits.
- Talk with lenders. You may be able to negotiate a payment plan with lenders during a financial hardship.
- Check for community resources and services. In most states, you can dial 211 for referrals to financial and community services.
Getting help with financial planning
Managing money can be overwhelming. But know that there are resources that can help and steps you can take to get support.
If you’re not sure where to start, you might want to consider working with a financial planner. You can use these resources to find a certified financial planner:
Financial planners can also help if you’re in the position of managing a loved one’s money. Finances can be a very sensitive subject for many people, and your loved one may feel more comfortable talking with a professional than with you. So try not to take it personally if your loved one is hesitant to let you help.