Updated on 09.29.14

Personal Finance, Small Businesses, and Spouses with Disabilities

Trent Hamm

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas.

On Facebook, Patsy asked about “Spouses with disabilities… how can you help your spouse by earning extra income? Also, when you have funds for bills only, should you invest in starting a home business by not paying on a bill that month?”

Patsy is asking a number of interrelated questions here. However, the situation she describes is not an uncommon one. Many households involve one disabled spouse while the other spouse works outside the home. Their finances are often challenging, and the disabled spouse often has a big desire to do something to contribute to the income level of the household.

This brings us to the first question implied here.

How can a disabled person earn extra income?
There are several key factors to consider when thinking about this question.

First, is the disabled person able to earn an income? Some disabilities enable a wide variety of activities, while other activities may be completely out of the realm of the disabled person. A realistic assessment of what work can be done is a vital first step.

Second, how much additional income can be earned? Many disabled households have deep restrictions on additional income lest their disability benefits be cut. Before you start engaging in an income-earning activity, know exactly what your limits are on additional earning.

Often, disabled individuals have a hard time finding suitable employment because of their disability, but that doesn’t necessarily mean that they can’t produce useful work. A great option for individuals in this situation is piecework at home, where they can produce up to their physical or income limits with great control.

One option for this is Amazon’s Mechanical Turk. This is piecework broken down to a very simple level, with quick tasks to perform, but you don’t tend to earn a strong hourly rate (you’ll earn less than minimum wage). However, you can do it whenever you want at whatever rate you’re comfortable with.

Another option, particularly if you have writing skills, is freelance writing jobs. Usually, you’ll be asked to write an article (or a number of articles) for a website and are paid a small amount per article. Many such services exist, including freelancewritinggigs.com. Again, you won’t earn a mint from this, but it has incredible flexibility with time and energy restraints, which are often chief concerns with disabled individuals. If you are successful with this, you may eventually reach a point where you will want to launch your own website.

Of course, some of these options inherently have startup costs. For starters, many of these options require a home computer and internet access. For many households with a disabled person, finances are tight. How can you make that transition? That really hits on the second part of Patsy’s question.

Should you skip bills to fund a microbusiness?
No. Do not skip bills in order to fund a microbusiness. If you do this, you are putting yourself and the rest of your family in a very precarious financial position because, if you’re in this situation, you don’t have enough resources to keep the bills paid.

You shouldn’t start a microbusiness on credit, either. Don’t use a credit card to buy a newer computer because you dream of using it to make money. Again, you’re putting yourself in a more precarious financial position than you were before because of the dream of making money, not the reality of it.

The solution, as always, is frugality. Shave your spending in every way you can. If you need money for a basic piece of equipment to make this happen, start by cutting back spending every chance you can. Each time you do that, put away some of what you saved for that purchase. Even if it just means putting a dollar in a jar, that’s still a positive move.

Also, don’t invest in high-end equipment unless you’re upgrading low-end equipment that you’ve used to death. For starters, never overinvest in starting a business in an area where you don’t have a proven track record. If you’re trying to start an online business, don’t buy a top-end piece of equipment. Buy a low-end piece of equipment, as it can do most of the things you’ll need to do. Always minimize your startup expenses in every way you can.

Similarly, this is a perfect situation to ask for help with. If your financial reality is this tight, consider asking your church for help or look for help with other community groups. Many people would be happy to donate older equipment to you for just this type of use.

Very rarely will you improve your situation by buying something, particularly when you can’t really afford it. If you’re in a state where you’re deciding between a purchase and paying your monthly bills, you can’t really afford it.

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  1. Dorothy says:

    Trent, you wrote,
    “Second, how much additional income can be earned? Many disabled households have deep restrictions on additional income lest their disability benefits be cut. Before you start engaging in an income-earning activity, know exactly what your limits are on additional earning.”

    I’m pretty irked by your implication that a “disabled person” who’s actually able to work shouldn’t do so lest her disability benefits be cut. Of course, if a previously disabled person is able to work — either because she has recovered or has discovered a different job she can perform, she should do so.

    The social safety net should be a trampoline, not a hammock.

  2. valleycat1 says:

    #1 Dorothy – the problem is that the way the system is set up,a person who goes just a dollar or two over the limit gets their benefits slashed drastically, if not completely. It isn’t a dollar-for-dollar reduction. So unless the disabled person is going to be able to make enough to completely make up for the lost disability income & benefits, then they do need to be careful about their income limits.

  3. deRuiter says:

    “Second how much additional income can be earned? Many disabled households have deep restrictions on additional income lest their disability benefits be cut. Before you start engaging in an income-earning activity, know exactly what your limits are on additional earning.” That’s just great. By all means don’t earn enough to negate the “benefits” of your disability and risk being able to support yourself. As one of the workers who is supporting the large number of people wo are “disabled” but still able to work but don’t because the taxpayers have put them on permanent vacation, I resent this remark Trent.

  4. Well, Trent, as usual, great article!

    As far as earning too much, I would be excited if I earned too much that I disqualified myself from disability. Who knows, this could be the beginning of a multi-million dollar enterprise.

    No business should be started without three years of income in an emergency fund; with the other spouse working, if that income sufficiently covers the bills, that’s you won’t need as much. That said, you must remain LIQUID; don’t buy anything without the money in the bank to pay for it. Save for the items you need; plan out the purchases you’ll need to start the business and save for all the initial purchases plus another 50% because you’ll probably need those funds as well. Fund the next purchases through the income from the new venture. Once all the planned purchases are complete, you’re on your way to contributing to the household’s income.

  5. The problem is that most on disability have many health concerns and could never find a job that provides health coverage. If they make too much to get disability they loose health coverage too. That is nearly irreplaceable for them.

  6. slccom says:

    The far more serious issues with overearning is the loss of Medicare. The system is really heavily weighed against people with disabilities. The chances of getting a job with health insurance approaches zero. People with disabilities have large medical expenses, and losing health insurance can be, quite literally, fatal.

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