Our Baltimore Social Security Disability Lawyer Shares Three Tips for Spending Your SSD Benefits Wisely
Some individuals have a serious medical condition that makes working impossible. However, help may be available for them in the form of federal benefits through the Social Security Disability Income program or the Supplemental Security Income program. The Social Security Administration (SSA) administers these programs and helps individuals with a qualifying disability receive some financial assistance if they have earned enough work credits.
The Social Security Disability application process can be lengthy, and often applicants are not working at the time. Accordingly, during this waiting period, bills can pile up and become overwhelming. But, once benefits are finally approved, some applicants begin receiving monthly benefits and a lump sum known as back pay. When disability benefits start, Social Security Disability beneficiaries often have questions about what types of expenses they are permitted to spend their money on. If you have been approved for federal disability benefits and have questions about how you can spend your money, a Baltimore Social Security Disability lawyer at the Law Office of Emmett B. Irwin can help answer some of your questions. Below are three tips for spending your SSD benefits wisely.
Use SSD Back Pay to Catch Up on Bills
Some individuals who are approved for SSD benefits are entitled to what is called back pay. Back pay refers to the SSD benefits you would have received had your claim been approved immediately. This is important as many disability applications can take months or even years to be approved. Back pay is determined by the date you filed your disability claim and the date that the SSA decided that your disability benefits begin (also known as the established onset date). SSA back pay is typically paid in a lump sum.
When you receive your lump sum back pay, you should first focus on paying overdue bills that piled up during your SSD application waiting period. If you have some money left over, you may consider placing some in a savings account for future bills that may be incurred unexpectedly, such as for a furnace that goes out or a stove that needs replacing. Your SSD monthly benefits will be paid to you as a monthly fixed income that may only be enough (or not sufficient enough) to cover your primary monthly living expenses. Accordingly, setting aside some of your back pay funds can help you plan for unexpected bills that pop up in the future.
Use Monthly SSD Benefits to Pay for Basic Necessities First
Once you start receiving your monthly SSD payments, you will be responsible for managing your monthly funds if you do not have a Social Security Representative Payee. Although the SSA is not going to monitor how you spend your funds, you are encouraged to make sure your monthly necessities are paid first before any extravagant and luxurious purchases. Accordingly, you should make sure your living expenses such as housing, utilities, food, transportation, clothing, and other necessities are paid first before making a lower priority purchase.
Create an Emergency Fund with Leftover SSD Benefits
Often SSD benefits are not substantial enough to provide a lavish lifestyle that consists of driving a Lamborghini or taking monthly trips to Fiji or Cancun. You should pay for basic necessities first, as mentioned above. With the remaining funds from your back pay or leftover monthly SSD benefits, you should not make expensive purchases that you cannot afford because there is no guarantee that your SSD benefits will last forever. Also, you cannot always predict what expenses will pop up. Accordingly, once you catch up on overdue bills and are current on expenses, you are encouraged to create an initial emergency fund and continue building on that fund. You may want to speak with your local financial advisor or banking representative about placing your savings funds into an interest-bearing savings account. This can help you prepare for unforeseen future emergencies that require you to spend funds above and beyond the monthly funds you receive.
Have Questions About Your SSD Funds? If so, contact a Baltimore Social Security Disability Lawyer Today for a Consultation
If you have been approved for disability benefits and have questions about spending your funds appropriately, a Baltimore Social Security Disability lawyer can help answer your questions. Contact the Law Office of Emmett B. Irwin today. We can answer the questions you have about your federal disability benefits. We work with clients throughout Maryland and surrounding states.