When working for an employer, you often get the benefit of sick pay. However, when working for yourself, you don’t get this benefit. This can make being self-employed and sick a financial struggle.
Whilst you may be able to soldier on through some forms of sickness, others may be too serious to work through. Long-term sickness could be a particular problem as it may require you to temporarily close your business.
Fortunately, there are ways that you can still financially support yourself whilst sick and self-employed. Here are just a few tips that you help you to financially manage.
Hire an assistant manager to look after your business in your absence
If you have employees already working for you, it could be worth training one of them up as an assistant manager so that you’ve got somebody to look after your business in your absence. This could keep your company open for business and allow a stream of income to still come in. If you haven’t got any employees who you feel confident giving this responsibility to, you could always hire someone new to take up this role.
Take out sickness insurance
Sick pay insurance could be another option – this is an insurance scheme available to the self-employed that can provide an income in the event that you are too sick to work. Insurance rates are likely to depend on various factors such as your general physical health, the type of job you do and the amount of income you usually receive. It’s worth shopping around to find the best rates.
Set up forms of passive income
You may be able to set up other income streams that don’t require you to do any hands-on work. These passive income streams could provide you with some funds to live on in the event that you’re unable to work. There are lots of ways to earn a passive income including renting out property, getting involved in peer-to-peer lending, investing in stocks, selling your clutter and making money through ad revenue online.
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Set up emergency savings
Another way to financially support yourself whilst sick could be to save up an emergency fund. These are savings that you can only access in emergencies – being too sick to work could be a suitable enough emergency to dip into these funds. Ideally you want to save up at least a month’s earnings in this account. There are savings accounts that you can use that can generate interest on your savings allow you to grow these funds.
Look into sickness benefits
In the case of the long-term sickness, there may be government benefits that you can apply for. Your illness may class as a disability, which could enable you to receive a disability benefit. You’re best off talking to your local citizens advice bureau to explore your options and see if you are eligible for these benefits.
Consider legal compensation
If you were made sick or injured as the result of someone else’s negligence, it’s possible that you may be able to seek legal compensation. By hiring a specialist lawyer such as a truck accident lawyer you can increase your chances of making a successful legal claim. This could provide you with some funds to support your time off work.
Access your pension early
It’s also possible to access your pension early. This isn’t recommended given that this is money left over for your retirement, however it could be a useful last resort and better than taking out a loan. Be wary that you could receive high amounts of tax on these funds – you should only take out money that you need.
Talk to your creditors
It could also be worth contacting your creditors and telling them of your situation – this could include business creditors and personal creditors. By utilizing online accounting and property finance resources, you can have a clear overview of your financial standing and effectively communicate your circumstances to your creditors. You could find that many of them are sympathetic to your situation, especially when presented with a well-documented financial plan and a proactive approach to managing your obligations. They may be willing to delay or even cancel payments for a month or two, providing temporary relief during this challenging period. With careful financial management and leveraging available resources, such as online accounting tools, you can accurately assess your financial capabilities and have productive conversations with your creditors. By taking proactive measures and seeking support before getting into debt, you increase the likelihood of receiving understanding and support from your creditors.
