Chronic Illness and Finances: What You Can Do

Along with the myriad of emotions that you have to deal with while in recovery, there’s also the stress of dealing with the current state of your finances. It’s likely that you previously spent a lot of money (even if you didn’t have much to begin with) on your addiction. It’s also possible that you lost a job—or several jobs—due to poor work performance. Getting back on your feet financially is a crucial part of your road to recovery. Money stress is linked to poor mental health, which could potentially lead to relapse, chronic depression, and even suicide. Assess each problem individually and create an action plan so you can move forward with treatment—and life—with a positive outlook.

You Have Bad Credit and a Mountain of Debt

Statistics indicate that more than half of Americans have poor credit, which can make housing, lending, or employment more difficult—if not close to impossible—while affecting insurance premiums. There are several steps you need to take in an order to repair your credit and get out of debt so that you can open up the doors to future opportunities.

• Fix any errors in your credit report. Approximately 70 percent of all credit reports have mistakes, so keep a close eye on your report so you’re not penalized for actions you did not take. It’s your right to get a free copy of your credit report every three months, so it’s a cost-free step.
• Catch up on any missed payments. This may be difficult to do if you’re out of a job and don’t have financial assistance, but ignoring creditors will only make the problem worse as your debts will go to collection agencies. If you can’t work out a feasible payment plan with a creditor, contact a nonprofit credit counseling agency to negotiate lower interest rates and create a payment plan on your behalf. The same applies for payments going forward.
• After a few months of making timely payments, try to upgrade to an unsecured card. Try starting with a department store card because it’s more likely you’ll be approved. Pay your entire balance in full (and on time) each month before applying for a regular credit card 6-12 months down the road. Don’t randomly choose a card to apply for. Do your homework as inquiries can harm your score. Note that if you’re in a consolidation program, you may not be able to take out any additional cards until you’ve paid down your debt.
• Avoid closing credit cards that you've had a long time. Again, this may not be possible if you’re in a consolidation program that forces you to close your cards. If you’re not in this situation, keep the card(s) open to avoid a negative impact on your score.
• Take a free money management course. Knowledge is power, so beef up your fiscal knowledge so you can avoid making more mistakes.
• Rethink your living arrangements. If you’re unable to manage payments and handle rent or a mortgage, consider whether you can stay with a loved one until you get back on your feet again.

Your Employment History Is Spotty

While bad credit can affect your ability to get a job if a potential employer runs a check, so can spotty employment history because it’s a red flag that you can’t retain a job for one reason or another. Since a job is key to correcting any financial problems, it’s crucial that you write a convincing cover letter that focuses on your strengths. In ordinary circumstances, someone with gaps in their job history could explain why (e.g., you had a baby, was a caretaker for a family member),but there’s no reason for you to spill the beans on your addiction. If anything, simply state that you took time away from your career for personal reasons.

Don’t let financial problems deter you from your goals. Take a step-by-step approach to getting back on track and seek help if you’re feeling overwhelmed. Financial freedom goes hand-in-hand with a successful recovery.