Is Borrowing a Good Way to Cover the Cost of Illness?

If you are unwell and cannot work then you may find that it is very hard to cope financially. Although large companies do pay sick pay and some can be very generous, there are many smaller companies that only pay a low rate. If you are a contractor or temporary staff you will not usually be entitled to sick pay at all and so you will have to manage without it. You may be entitled to disability benefits if your doctor can prove that you are unfit for work, but it will depend on how long you are ill and what is wrong with you. In many cases you will be worse off and you may be worrying about how you can cope with things financially.

Borrowing as an option
Borrowing can seem like and easy and simple way to get us some extra money. Whether we use our overdraft, spend on a credit card, use a personal loan or payday loan it is all borrowing. It can feel easy as the money can be easy to sign up for and get and it is very easy to spend of course as well. However, it is worth thinking beyond having the money and consider how easy it will be to repay the money. Consider when you are likely to be earning again and how you will cope with repaying the loan. If you have a short illness then you should be more able to cope financially anyway and if you do take out a loan you should be able to more easily repay it. However, long term illness can be a much bigger problem if you do not know when you will return to work or think you are unlikely to work again then taking out a loan could be a bigger problem as you will have no earnings to repay it.

Alternative options
It could be worth thinking about what other options you have with regards to your finances. When you are unwell it can be difficult to find the time to do this and possibly be able to think clearly about it but it is worth trying if you can. Start by looking into what benefits you are entitled to. Hospital staff or your GP might be able to help you with this and it will allow you to make sure that you are claiming everything that you can and will be a start to working out how you can manage financially. Then you need to see how much money you have to pay out regularly. This is to cover all your necessities, which might be just over the short-term until you can get back to work or in the long term if you feel that you will not be returning. You should be able to use bank statements to help you to do the necessary calculations. It could be good to map it out either in a chart by hand or in a spreadsheet so you can list all of the payments that go out, how often and how much and you can calculate your average monthly expenditure. This will enable you to see if you will cope.

It can then be wise to look at ways to reduce what you are spending to make it easier. You should compare costs of everything you buy including insurance and banking so that you spend as little as possible. If things are still too expensive then consider whether downsizing might be an option. If you live in a smaller property then it will be cheaper to buy or rent as well as maintain and the heating, council tax and things like that will be less. If you downsize then you may need to sell some things as you may not have room for everything and this could help to raise some much-needed money as well. Alternatively you could consider renting out rooms, attic space, garage space or even a parking space to easily generate some income.

It may be that you will be able to earn some money form home. It could be that although you cannot work outside of the home, that you will be able to do some work form home that will make money. Obviously this very much depends on the nature of your illness.

It could be that you might need to help friends and family to help you out. This can be really hard as if you have never asked for financial help before you may feel that it is something that you never wanted to do. However, it is at these difficult times when friends and family will often be more than happy to rally round and help and they may be desperate to help you but just waiting for you to ask. 

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