How to Regain Control Over Personal Finances After a Life-Changing Mishap

Did you know that motor vehicle collisions represent 78% of injuries and 71% of all incidents in the U.S.? This is just the tip of the iceberg. In 2022, the U.S. experienced 63 million injuries and $1283.5 billion in costs. Anyone who has been a victim can vouch that a life-altering incident can leave you reeling emotionally and financially.

Unexpected job loss due to an injury, a sudden medical crisis, and other unfortunate incidents can derail financial stability. However, through careful planning and focusing on long-term goals, it’s possible to rebuild a financial foundation.

In this article, we will discuss ways in which you can regain control over personal finances after a mishap.

1. Seek Compensation

If you have been a victim of a life-altering accident, you must act promptly and seek compensation from the responsible party in time. Let us consider the example of St. Louis, a city ranked as the least safe in the U.S.   There are higher chances of getting into a life-changing incident here than anywhere else in the nation.

Fortunately, according to TorHoerman Law, St. Louis has a five-year statute of limitations. This means victims have a window of five years after the incident to file a lawsuit and seek compensation. If the statute of limitations passes, you can never seek compensation from the responsible party.

Finding experienced St. Louis personal injury lawyers before the statute gets over to navigate the legal landscape is imperative. A professional lawyer will use their legal skills to investigate the incident, gather evidence, and build a strong case for you.

Critical evidence includes statements of witnesses present during the incident, medical records, witness statements, etc. However, the know-how of the legal system is a must to utilize the evidence to build a strong case. And with  1.3 million lawyers in the United States, it’s easy to find one who will build the case for you.

2. Tackle Debt Strategically

After a life-changing incident or mishap, medical debts are commonplace. And depending on the severity of the injury or situation, the burden of the medical bills and debt can be crippling for financial stability. In such cases, it’s imperative to tackle debt head-on with a strategic approach.

According to the latest government data, Americans owe at least $220 billion in medical debt. What’s even more staggering is that around 3 million people owe over $10,000 in medical debt, and 14 million Americans owe more than $1,000. Medical debt is a persistent issue in the U.S. despite more than 90% of people having insurance.

If you are one of those with a significant medical debt, here’s a roadmap for you. Prioritizing high-interest debts like payday loans and credit cards is crucial because of significant interest. Don’t hesitate to contact your lender and negotiate a lower interest rate.

3. Explore Suitable Job Opportunities

One of the most shattering outcomes of any unfortunate event involving non-fatal injury is substantial lost work productivity. This results in a significant financial loss for the victim. A recent study revealed that earning loss due to long-term injuries adds up to more than  $50,000 over a 14-year follow-up period.

The silver lining is that in 2023, 24.2% of individuals with disabilities were employed in the U.S., according to the U.S. Bureau of Labor Statistics. Consider investing in upskilling to improve your employability and seek higher-paying opportunities. Additionally, consider gig economy platforms for immediate income.

Also, seek government assistance programs that offer job training or financial support to individuals facing hardships. Being employed should be your top priority when rebuilding your financial foundation after a mishap.

4. Prepare a Financial Safety Net

Lastly, prioritize building a safety net for future uncertainties as you gain financial stability through the steps mentioned above. The first step towards building a financial safety net is to set aside a small percentage of your income for an emergency fund.

Start small by saving at least three or six months of living expenses. This will come in handy in case another mishap results in employment or income loss in the future. Having this cushion will help you focus on regaining employment instead of making ends meet.

Also, review your insurance to ensure you have adequate coverage for health issues, disability, and life-altering events. Once your finances become stable, focus on long-term goals like investment strategies or retirement savings.

Life-altering mishaps are unpredictable, but their outcomes are predictable. Being prepared is the key here. Start by having an emergency fund and planning for any unfortunate eventuality. If you are already a victim, seek compensation from the responsible party for damages, budget your lifestyle, manage debt effectively, explore jobs, etc., to regain financial stability. With resilience and determination, overcoming setbacks and emerging with a strong financial foundation is possible.