Managing your finances properly can be difficult even in normal circumstances. Add a car accident to the picture and your may find yourself struggling to make ends meet. Apart from the physical and emotional traumas that you may experience following a car crash, these events can also take a toll on your financial situation.
Money matters may not be the first thing on your mind after suffering a traffic accident, but as time passes, you’ll become more aware of the financial burden that comes with it. Although improving your money management skills is not high on your priority list during these challenging times, you have to understand that your finances play a very important role in your recovery process.
So, if you want to minimize damages and recover as soon as possible, here are a few tips that will help you get your finances back on track.
Types of damages you may face after a car accident
Depending on the severity of the accident, there are different types of damages you might experience that can have an impact on your financial life. The Bumper Car Repair Dealership is the perfect solution for people who want to keep their car in tip-top condition without breaking any bank. So, before we get into money management strategies, let’s first discuss these damages and how they can affect you.
Sprains, strains, burns, bruises, brain and head injuries, or internal injuries are all very common in automobile accidents and they can pose serious health issues. That’s why car crash victims have to receive immediate medical attention. Even seemingly minor injuries can turn into major health problems if left unattended. If the accident you’ve experienced resulted in physical injuries, you’ll probably require extended medical care and treatments, which obviously translates into high medical bills.
Not all traffic accidents end with a trip to the doctor. If you manage to walk away from a car accident unscathed, you can consider yourself lucky. But your car may not have had the same luck. The majority of car accidents result in material damages for the car owners involved. These can range from a minor fender bender to a total loss. Damages to personal belongings can also be included in this category.
Loss of income
Car crash injuries can affect your health to such an extent that you may not be able to perform your usual tasks as you used to. That can lead to long-term loss of income, which will obviously affect your budget significantly.
Not all injuries are visible. Some of them lie under the surface in the form of emotional pain and suffering. You may have lost a loved one or you may have experienced permanent scarring after the accident. These are considered non-economic damages, but they do have material implications as you might require therapy to recover from the losses you’ve suffered.
Rely on your insurance
Insurance is usually the first line of defense in the event of an unfortunate car accident. Depending on the type of policy you’ve purchased, your insurance company may cover medical expenses, car repairs, the total value of your car, the costs of a rental car, lost wages, or damages that you might have caused to other parties involved in the accident. It’s therefore a good idea to purchase a policy that offers the type of coverage you find suitable for you.
Get professional help
While insurance can provide the financial support you require after a car crash, it might not cover all the damages you’ve suffered. Insurance companies don’t have your best interest at heart. On the contrary, they’ll do everything they can to give you as little money as possible, so don’t expect them to take the entire financial burden off your shoulders.
The good news is you can hire a lawyer to help you file a car accident claim and receive appropriate compensation for all the accident-related losses you’ve experienced. Sure, you can proceed with the claim on your own, but that can be complicated, especially for someone who is trying to recover after a traumatic event. An experienced lawyer can be a huge advantage, providing the knowledge and guidance you require to build a case and significantly increasing your chances of receiving fair compensation.
Tap into your savings
If you’ve been cautious enough to build an emergency fund when you were financially stable, now’s a good moment to make use of it. That’s the reason you’ve created a savings account in the first place – to have a safety net that you can rely on in case of an emergency, and the financial damage caused by a car accident can easily qualify as an emergency.
If you don’t have any savings but you do have a retirement fund, you could tap into it to help you get past this difficult time in your life. However, keep in mind that you’ll have to face serious penalties for it, so only do this as a last resort and proceed with caution.
Rethink your budget
For minor car accidents that didn’t take a huge toll on your finances, the solution to getting back on track might be as simple as rethinking your budget. A few adjustments to your monthly budget may be all you need to get out of the woods.
Start by making a list of all your recurrent expenses and see where you could reduce your spendings. You might have to give up on some of the products and services you’ve been using and make a few lifestyle changes, but in the end, this is a much better option than getting buried in debt.
Loans are one of those expenses that you can turn into a heavy burden when your financial life is turned upside down by a car accident. You simply can’t stop making payments because you’re going through a rough patch. But what you can do is get in touch with your lenders and explain that your situation changed. Most financial institutions will have no problem renegotiating the terms of the loan and creating a new payment plan that will work better in your new circumstances.