Managing money effectively is crucial for everyone, but for individuals with disabilities, financial literacy is especially important to maintain independence, security, and access to essential benefits. Understanding how to budget, save, and navigate government assistance can make a significant difference in financial well-being.
This guide covers key financial literacy skills for individuals with disabilities, including budgeting, credit management, saving strategies, and protecting benefits.
1. Budgeting: Managing Income and Expenses
A well-planned budget helps you track your income and expenses, ensuring you have enough for essentials while staying within benefit limits.
A. How to Create a Budget
List all sources of income (SSI, SSDI, wages, ABLE account withdrawals, etc.).
Track fixed expenses (rent, utilities, insurance, loan payments).
Plan for variable expenses (groceries, transportation, entertainment).
Set aside money for savings and unexpected expenses.
B. Budgeting Tools and Resources
Use budgeting apps to track spending.
Enroll in bill pay automation to avoid missed payments.
Check if your bank offers alerts for low balances or large transactions.
📌 Tip: If you're on SSI, track spending carefully to avoid exceeding the $2,000 asset limit ($3,000 for couples).
2. Building and Maintaining Good Credit
A good credit score helps with securing loans, renting an apartment, and even qualifying for lower insurance rates.
A. How Credit Works
Credit scores range from 300 to 850 (higher is better).
Scores are based on payment history, credit utilization, length of credit history, and new accounts.
B. Ways to Build or Improve Credit
Use a secured credit card and make small purchases, paying them off each month.
Become an authorized user on a trusted person’s credit card.
Pay bills on time to maintain a positive payment history.
Keep credit utilization below 30% of available credit.
📌 Tip: If you receive SSI, be cautious with credit usage to avoid accumulating debt you can’t afford to repay.
3. Saving Strategies While on Disability Benefits
Saving money is essential, but for those on SSI, savings over $2,000 ($3,000 for couples) can impact eligibility. Here’s how to save without affecting benefits:
A. Open an ABLE Account
Allows you to save up to $18,000 per year (2025 limit) without impacting SSI or Medicaid.
Can be used for housing, transportation, medical costs, and more.
Balances under $100,000 do not count toward SSI’s resource limit.
B. Use a Special Needs Trust (SNT)
Protects assets while maintaining eligibility for benefits.
Funds can be used for medical care, education, and personal expenses.
C. Build an Emergency Fund
Even small savings can help cover unexpected expenses like medical bills or home repairs.
Look for low-fee savings accounts to store emergency funds.
📌 Tip: Keep track of your total savings to ensure you don’t exceed SSI limits unless using an ABLE account or SNT.
4. Understanding Disability Benefits and Work Incentives
If you receive SSI or SSDI, it’s essential to understand how work and additional income impact your benefits.
A. SSI and Income Rules
The first $20 of any income is not counted.
The first $65 of earned income is excluded, then SSI is reduced by 50 cents for every $1 earned.
If earnings exceed SSI limits, benefits may be reduced or suspended.
B. SSDI and Work Incentives
SSDI recipients can use a Trial Work Period (TWP) to test working without losing benefits.
The Substantial Gainful Activity (SGA) limit for 2025 is $1,620 per month ($2,700 for blind individuals).
C. Work Incentive Programs
Ticket to Work Program: Helps SSDI and SSI recipients find employment while maintaining benefits.
Impairment-Related Work Expenses (IRWE): Certain disability-related work expenses can be deducted from countable income.
📌 Tip: Always report income changes to SSA to avoid overpayments and benefit suspension.
5. Avoiding Financial Scams and Predatory Lending
People with disabilities are often targeted by financial scams. Being aware of common fraud schemes can help protect your money and benefits.
A. Common Financial Scams
Social Security scams claiming your benefits will be suspended unless you pay a fee.
Fake disability grants asking for personal information or money upfront.
Predatory loans offering “fast cash” with extremely high interest rates.
B. How to Protect Your Finances
Never share Social Security numbers or banking information over the phone or email.
Use trusted banks and financial institutions for loans and credit.
Monitor credit reports regularly to detect fraud.
📌 Tip: Report scams to the Federal Trade Commission (FTC) at reportfraud.ftc.gov.
6. Manage Your Finances with Confidence Using Purple
Financial literacy empowers individuals with disabilities to budget, save, and protect their benefits. Purple helps you track spending, monitor benefits, and plan for financial security.
Get started with Purple today and take control of your financial future.