Ill-health can lead to financial stress and disorganisation. Accountant Liz Densley explains how can you minimise this.
Before ill-health strikes:
- Know what sick pay you are entitled to – either from your employer or via your insurances (see Kevin Walker’s detailed article on this topic.)
- Know what your basic living costs are and try to ensure you build up at least 6 month’s worth to tide you over if you are unable to work.
- Organise your finances so major bills are paid by direct debit, so you are less likely to forget to pay them while unwell (but do try to check bank statements regularly still and ensure there’s enough money in the current account to pay them)
- Keep your accounting records up to date at all times.
- Make sure you put away money for your tax as you earn it.
- Understand your mortgage: what flexibilities do you have, can you take a repayment holiday? Can you overpay to create a buffer you can effectively use to cover future payments?
Keeping paperwork up to date
Invoice practices immediately on completing the work, and deal with the pension forms at the same time to reduce the risk of getting behind.
Keep important documents scanned and in a folder for your accountant (or just keep paper in an envelope), so you don’t have to hunt things out at the year end.