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A Guide To Managing Money Through Illness

Unexpected illness. It’s the last thing that any of us want to happen – and it’s worse when it comes completely out of the blue. When it does, though, our finances often bear the brunt of the storm. But managing money through illness isn’t as hard as you’d think.

So how do you bounce back with the coin? Well, at-home remedies differ slightly depending on whether you’re in paid employment or a small business, but many of the fundamental money-management principles apply to both.

Here’s how to manage your money when the unexpected hits.

My own nightmare started in April 2019. Long story short, I found out I was 5 weeks pregnant when travelling overseas in rural south India with my husband. We were overjoyed at our own news, but keen to get back on Australian soil and figure out the whole parenting thing.

No sooner had we arrived back than the vomiting started. What began as a cute nod to the Hollywood stereotype of a woman with child quickly and monstrously turned into a non-stop toilet bowl frenzy.

I virtually laugh, but it was nothing short of debilitating. Now that I’m through the worst (aptly referred to by sufferers as “the death zone”), people ask me to describe it.

Imagine having extreme food poisoning, 24/7, for months. It’s not run-of-the-mill morning sickness. It’s hyperemesis gravidarum, a condition that affects only 2% of all pregnancies.

On my physical and mental health, the toll was great. But on my finances, the toll was greater. Being bed-bound, hunched over a sick bag or bucket, I couldn’t work from April to July. This meant cancelling all pipeline projects, and some projects already halfway through.

Between bouts of lying on the cold bathroom floor, I used the remaining energy stores I had to find other creatives to take over where possible. With everything else, it was just a big profuse apology, ala Jack Burger Post-IT note: “I’m Sorry. I Can’t. Don’t Hate Me.”

Overall, this represented months of work diligently lined up, and tens of thousands in lost income.

Everything screeched to a halt – we were in survival mode. Not only could I not work in the business, but I also couldn’t work on it. No blogging, social media, networking, pitching or media activity. I went from 60+ hours a week to nothing, overnight.

As a small business, I don’t get sick or annual leave. My coin is my coin. But, managing money through illness doesn’t have to be rocket science. We got through (as you will too), and the retrospective effect on our finances has been minimal thanks to a few golden rules.

Firstly, work out what benefits apply to you.

I had an emergency fund equating to a years’ worth of lean income, as well as good income protection insurance through my superannuation. Knowing I had that safety net eased my mind and allowed me to focus completely on recovery. I talk about how to build a lean emergency fund here.

Small business owners and sole traders should always have safety buffers (if you’re reading this and you’re not sick, but don’t have an emergency fund either – get saving! I would store even a little over your next debt repayment).

Knowing I had cash available to pay my basics – mortgage, bills, food (not that I could eat any) and premiums – kept me from reaching for my credit card, dipping into my investments, or selling off my assets. It stopped me from entering into predatory loan arrangements that took advantage of my vulnerability and desperation.

If you’re in employment, look at your annual, sick or long-service leave entitlements immediately – and take them. There is also a government sickness leave option with a detailed medical letter – but it is means-tested (it’ll take into account your household income, including that of a working partner).

Income protection is another option, so long as you have it, or trauma and Total Permanent Disability depending on your specific circumstances (these are typically lump-sum payouts though, vs a temporary replacement income).

The reason you prioritise this step is because the application process can be tedious. You want to give yourself plenty of time to get in the relevant medical clearances and go through any insurance hoopla. If eligible, though, it’ll be worth it.

Helpful hint: If it’s a pregnancy issue like mine – income protection isn’t always off the table in the case of “complications”. You can also discuss taking maternity leave early, and the Paid Parental Leave scheme has the work test component altered if you can prove you were ill during pregnancy.

Reduce expenses immediately.

Your next big step is assessing your expenses, and reducing them by whatever means. Your lifestyle should be treated separately to your income. That means that just because you earn six-figures doesn’t mean you’re obligated to exhaust that amount. You get to choose how much you spend, and in times of sickness, this should be as low as possible.

I quickly analysed all of my expenses, and decreased them wherever I could. I put an indefinite pause on personal and business subscriptions and declined social outings. I cancelled unnecessary travel and put a hold on investing. This is because a.) your lifestyle has changed, so have your priorities and b.) you will have other costs associated with your illness.

I started regular acupuncture sessions to help alleviate some of the nausea and started buying scripts for both expensive medication and natural remedies. These came with new costs which would have been unsustainable to service alongside the old ones.

Self-care isn’t limited to things that cost you. For me, it was sleeping more to combat the constant waking nausea and newfound fatigue. It was reinforcing boundaries for things I didn’t want to do, or go to. It was journaling the kind of life I wanted our new addition to have – thinking about the future when the present felt very bleak.

I also went hell for leather on identifying the easiest source of income for me. I realised that I had a number of outstanding invoices I hadn’t gotten around to sending to clients yet, so I issued all of them and politely reiterated my payment terms – seven days. As a small business, you might have invoices or scheduled income yet to come in too.

My clients were great and paid promptly for the most part.

This gave me a cash boost that kept me afloat without having to dip into those emergency funds, or touch income protection insurance. But when it comes to managing money through illness, try anything you can if you’re feeling up to it – doing surveys from bed, market research in your home, selling stuff around the house or easy freelancing.

Apply for financial hardship help.

In times of unexpected sickness, you may be entitled to relief from the day-to-day expenses you wouldn’t normally think twice about. Financially speaking, you may be eligible for them in the way of hardship benefits.

Most lenders will offer hardship programs, with an in-house hardship officer responsible for assessing claims. This can be a great way to put pause on, or restructure your loan repayments to a more reasonable payment plan – all without affecting your credit rating. Here’s the ASIC hardship threshold calculator.

It’s not ideal to simply stop paying for things because over time, this affects your credit standing, and ability to apply for growth loans in the future – like for property, or a business. All contracts that don’t allow immediate no-fee cancellation should have a hardship clause in them, and it’s worth ringing up your provider to ask.

As I said, I could freeze most of my subscriptions or simply stop using the others. My HECS debt wasn’t impacted given that is only indexed at the end of the financial year, and assessed on my income. While EOFY fell during the time I was sick, my due date to pay won’t be until later in the year. So, I won’t be defaulting on anything.

Be honest and ask for leniency.

Ultimately, people are human. We all get sick, and while some employers don’t meet their ethical or legal obligations to staff – many do. Explaining your situation to your workplace (with any relevant medical documents) might help you negotiate something that better suits you – like going part-time or working from home in the short-term.

When I started feeling more human again around 18 weeks, I decided it was time to restart taking on client projects. I also decided to be honest with clients and tell them that I could only work part-time, and would only be available in the mornings (bar some very rare exceptions for conference calls with time differences).

If we video conference, I tell them upfront I might have to run off unexpectedly. This has happened once or twice. I see no point in forcing myself to overwork, or telling people porkie pies in order to appear more professional. If I’m an advocate for normalising the life component to work-life balance; why wouldn’t I start with this?

Ask for leniency, because you need it, and let people help you.

Be kind to yourself.

One of the key psychological steps you can take for managing money through illness is to prioritise yourself. Find support in people you trust, in online groups or specialist networks for your condition (I have a great HG Facebook support group if anyone wants the link).

Accept that this is a part of your life that will actually represent such a small slice in the grand scheme. While we can sacrifice any number of physical things, one thing we shouldn’t is our self-compassion.

It’s not our fault that we get sick or injured, and it’s not our fault that our lives are so dependent on income that any deviation from time earning it impacts us so greatly. Accept it, and be kind to yourself. Look after yourself. Put your needs first.

It’s the very least – and the very most – you can do.

August 1, 2019/0 Comments/by Michelle

Intentional Spending

Let’s Talk Money, Honey: Honeymooning On A Budget

The wedding bells have finished chiming, the once-chinking glasses are all back in the special cupboard and it’s time for a little one-on-one, just you two. But how do you think about honeymooning on a budget when everything seems geared to cost so much?

On one of the most memorable trips of your life, the biggest planning hurdle is usually money. Different wants, mixed with varying expectations for each couple means that meeting-in-the-middle money management can suck the joy out of planning.

How much do we take? Is it possible to save on anything? What’s an average daily spend – particularly in different countries? What should we splurge on?

It is possible to honeymoon on a budget if you follow a few simple rules. Most importantly, remember that the honeymoon is your experience. There’s no right or wrong way to do it and no amount to spend that justifies it as a ‘honeymoon’.

We included our honeymoon in our wedding budget from the get-go, and clearly segmented how much we wanted to spend on each. This really helped us not to go over on either category, knowing it might eat into the other.

And although we didn’t ask for gifts for our wedding and made it clear it wasn’t expected, many people thoughtfully left us cash which helped pay for our trip. If you’re still in the wedding stage, I would highly recommend this over a registry. Experiences over things.

No rush, wait it out.

If you’re married in peak season, you’re probably travelling in peak season (if you go straight after the nuptials). So, don’t go right away – wait until low season and travel then, it’s much cheaper. Our wedding was in October but we didn’t head off on our honeymoon for another 7 months afterwards, and this also gave us extra time to save.

Keep a cash reserve to take advantage of deals.

Jump on deals as soon as they pop up, which might mean having a cash reserve ready. Virgin Australia announced a round-the-world ticket for $999 early in the year, and it was for two days only. Every other ticket I’d looked at beforehand was triple the price, so I jumped on it. Likewise, we booked a Eurail ticket at 33% off on a flash sale.

On a side note: we railwayed our way around Europe and this alternate mode of transport saved us a bunch – had we flown between every destination, we would have spent thousands extra. A simple flight from Vienna to Germany was over 400 Euros. Certainly not conducive to honeymooning on a budget. No thanks.

Plan what’s important to you.

I can’t stress this enough… agree on what honeymoon you want. This does the heavy-lifting of your budget for you.

Adventures and tours: Will you be out and about a lot? Consider that most attractions (even state-run or national trust) will have entry fees.
Hotels: Do you look at the details of hotels – the amenities, the towel thread count – with an eagle eye? If so, a more luxe hotel might be where you want to divert your funds.
Food and alcohol: Mega foodies need to make sure they have a significantly higher daily food budget.
Shops: Buying big-ticket items can be great to do overseas if the local currency is weak and the tax is refundable when you go home.

We got super clear on the honeymoon we wanted to have in three words: adventurous, exciting and busy. One of the few must-haves on our shared “joy list” (the things we’re happy to spend on) is travel experiences, so our budget had to account for that.

We were happy to stay in quirky hotels, not luxe ones. Food wasn’t a priority because I’m pregnant and vomiting food up really is a fun game of Will-I-Won’t-I? (Best-Get-A-Bucket-Just-In-Case). Shopping included a couple of items we had been looking at and researching for over a year (we saved hundreds buying overseas).

Limit eating out.

On the vein of food, eating out is actually really boring after a while. Traipsing around to find somewhere that suits both dietary requirements and looks like somewhere you’d actually want to eat three times a day sucks. We had at least one meal a day from supermarkets or deli counters which saved us an absolute bomb.

Look at travel sites as a guide only.

I never look at trip forums when asking the question “how much do I spend?” Why? Because it’s like asking a stranger how long a piece of string is. What constitutes a shoestring, average or luxury budget is completely dependent on the person and the variability is way too high. That, in money terms, is risky.

Instead, I research individual things. I look at the cost of restaurant menus of places we’d eat at, I look at attraction or entry prices for things that would generally interest us and the cost of transport for varying trips. When you’re honeymooning on a budget, this builds a picture of what it would really cost to be tourists, holidaying in the way that you want.

Ditch the plastic.

Unless you have an amazing travel credit card setup, I’d ditch the plastic completely.

Otherwise, expect foreign transaction fees, standard merchant fees, cash withdrawal fees and high markup currency exchange rates (this is a mid-market rate, aka “buy and sell midpoint rate” with a margin). Instead, use cash as much as possible and leave cash deposits at hotels instead of a card authorisation. Even if the charge is held, your bank may well still charge an international fee for hypothetically processing the amount into sterling (as all non-sterling currencies need to be).

Pay online in advance as much as possible.

Even if you only know what you’re going to do the night before. Look online and see if there’s a cheaper ticket for pre-booking – then pay by PayPal or reserve your spot to pay in cash at the deal price when you arrive. We did this for a number of experiences and saved anywhere from 25-60% on any given thing. All of our hotels were booked ahead of time through deal sites like Trivago and Booking.com, scoring us some great hotel rooms for $100 a night.

Share with everyone for the freebies.

Share the news, far and wide when honeymooning on a budget. Honeymooners can boast things like room and experience upgrades, champagne, dessert and sometimes even gifts. But only announce it when you arrive – upsold honeymoon packages are a major rip-off in my opinion and I wouldn’t bother with them.

Other tips:

Look into the travel or hire car insurance that comes with your credit card (providing you pay for those things on the card). Some people don’t like credit card travel insurance, but we used our Suncorp Platinum insurance on a hasty return from a recent trip to India and they paid us back everything without any hassle. It depends on the underwriter.
Don’t feel guilty for not going out. We had entire days (sometimes in succession) where we’d stay in bed all day, reading, watching Netflix and napping. Enjoy each others’ company – I know my husband so much better now because we spent so many hours just talking, and that was my favourite part of the trip. You don’t have to be out all day, everyday just because you’re on your honeymoon.
Stay close to transport routes as non-conventional transfers to remote places can be expensive. The days you travel can also make a difference, so be open to taking unusual flight paths if they work out significantly cheaper – especially if you have extra time. And travel overnight if possible (night flights and sleeper trains – they save you on hotel costs).
Create two budgets. Live-Like-A-Local and Make-It-Rain. Use the first 70% of the time and the latter 30% of the time (…even while honeymooning on a budget, splurging occasionally is okay). Travelling should be equal parts plan and spontaneity, because what’s worse than spending guilt on holiday?
Keep a tally on your phone of how much you have left each day. It’s purely an admin function to help you keep it in check (you’d be surprised how fast you’d go over budget otherwise).

While it’s important not to debt yourself for a honeymoon, investing isn’t all about what you can grow tangibly. Emotional development, increased self-awareness and personal adeptness are also significant measures of growth you can bank in different ways.

I believe travel makes us better citizens, and directly increases our earning potential. We become more capable under pressure, stronger in experience and empathy (how we work with others) and better educated – all crucial soft skills for making moolah.

Travel is in my top-five fave investment vehicles, and by honeymooning on a budget you’re off to a great start.

July 9, 2019/0 Comments/by Michelle

Intentional Spending

Here’s How I Saved Over $1000 By Doing Frugal February

Finding extra cash by starting a side-hustle is about as mainstream now as mowing your own lawn. It’s a great way to upskill, network – and of course, earn more cash. Beautiful, lovely cash that can be used for paying down debt, investing into the stock-market, buying property, donating to causes you care about. But what if having more money in your pocket at the end of every month didn’t actually require extra work? Say hello to Frugal February.

Frugal February is all about creating more money every month just by making more frugal swaps in everyday life. By excluding some of our discretionary spending, the theory is that we can collectively find more money in our budget, instead of having to work to earn it.

I put this to the test in February this year.

By the end of Frugal February, I had almost $1300 extra in my bank account, and as a small business owner with a goal to retire early by investing widely, this cash was a welcome addition to my portfolio. Here’s exactly what I did through Frugal February to save and find more money, and what you can do too.

All discretionary spending went out the window.

To start, I went through my budget with a fine tooth comb to omit anything that I didn’t consider completely necessary.

This included many convenience purchases, which are so draining on the wallet. Think coffee, lunch in between meetings and door-to-door transport. I also cancelled and rescheduled any social outings – seeing as it was only a month, I figured that I could go without for a short period of time.

The next step was prioritising food and transport as necessities, but tweaking the way I spent on them. I walked frequently (or caught buses when it was too hot to do that), packed snacks and meals in my bag, and kept tea in a thermos to fulfil the coffee itch and ritual sipping I so enjoyed when working.

I’m a big fan of using subscriptions that have pause features (without penalty), so I put all of them on freeze, stopped drinking alcohol and planned everything in advance to avoid any last-minute temptations from striking up.

I stopped letting marketers target me.

It’s in a businesses’ interest to incessantly market to us, and we now live in a society where that’s so normalised, we struggle to identify when it’s even happening. I have conducted major email and browser cookie culls before, but was surprised at how many had slipped through the cracks since (and how many purchases I’d made without thinking).

I unsubscribed from everything, mercilessly.

It was strangely cathartic and opened up a new challenge of looking at local, free marketplace hubs for things I needed to buy. As it turned out, I was in the market for an iMac – which I found secondhand but in great nick for $140. Sure, it’s a 2007 version, but it works a dream, looks like new and had been completely refurbished.

I also made a new face serum using existing beauty products I had left over from other purchases. It took me half an hour and cost nothing. Honestly, it’s one of the best I’ve ever used so far for my skin.

Something borrowed, something re-gifted. Nothing new.

People often think that frugal people live like Ebenezer Scrooge, but anyone who knows me knows that I love treating people with gifts. It’s a real joy to give things to people you love and care about. But sentimentality can be expensive, and it’s only getting pricier.

So, instead of ducking to the shops in preparation for a dinner party, birthday celebration or Valentine’s Day – I turned my attention closer to home. In any given cupboard, I had unboxed candles, beautiful homewares with the tags still attached and lovely wines that had never been corked. And I’m not alone – how many of us have a bunch of stuff gifted to us from Christmas that would probably never otherwise see the light of day?

That wasn’t all, either. I went to a business dinner wearing a labelled dress I borrowed from a friend. And one other friend told me she borrowed camping gear for her first time in the wilderness (aka a caravan park). She hated camping so much she’ll never do it again… what a waste that would have been!

I jumped on the Do It Yourself bandwagon.

Something I’m definitely working on in my finances is calling in help for things I could do myself. I’m not averse to dropping off items to the dry-cleaner or alteration place, or using a house cleaning service or a car-wash – but for Frugal February, everything stopped.

I pulled out my dusty sewing kit for one of my favourite items of clothing when the seams tore, pulled up my sleeves to clean our car inside out on a weekend morning, and even braved the darkest depths of the kitchen sink cupboard to seal the water heater drip tray waste pipe when we realised it might be letting bugs in.

A lot of those things I’ll continue to do.

Discounts on everything became my modus operandi.

Whilst it wasn’t the most enjoyable exercise, I spent an afternoon one day ringing around all of the subscription providers I had contracts with, and point blank asked for a discount. My goal was to haggle down my monthly fees, even if just a few dollars – it all adds up, especially if a few providers agree unanimously.

I began with open-ended statements like: “When I took a good, long look at my last bill, I felt like I was paying too much.” This was to see what they would suggest (perhaps it might be more than I was going to ask for, and I didn’t want to short change myself). If they didn’t immediately offer a better deal, I asked outright: “Is there anything you can do before I start shopping around?”

To my surprise, many were quick to comply, and were even happy to. Some needed a little more persuading, but ultimately, offered a small discount after a while. Overall, I’m now better off $600 for the whole year, which is around $50 per month in additional savings. All for the time it took to make a few polite phone calls.

Frugal celebrations only, thanks.

Frugal February falling on Valentine’s Day is both a blessing and a curse.

On one hand, it feels a little like you’re missing out – but on the other, you stand to save so much. Many retailers and restauranteurs will openly admit that the markup on their products and menus (often fixed price) is much more than they’d otherwise get away with charging – but on that day of the year, the demand very much exists.

This year, we replaced flowers, dinner and gifts for a homemade meal, cards made on Canva and a good old planning session of the next years’ share portfolio asset allocation. Sounds like a riot, I know – but to us it was actually fun. Just like the gift-giving thing above, we buy into the idea that the only way to show affection or appreciation is by buying stuff. It’s not.

We can have a great time and be thoughtful without digging deep into anything physical – and it doesn’t just have to occur over the month of February. Any month can be frugal with enough prep and motivation, so get out there and see how much extra you can accrue.

March 6, 2019/0 Comments/by Michelle