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.