Financial literacy is a key component of self-sufficiency. For people living with Gaucher disease, as for anyone with a rare disease, significant health-related concerns come with the diagnosis. Those health concerns can impact your finances—and highlight the importance of being financially literate.
To learn more about financial literacy for people with a chronic condition, we turned to Phyllis Shallman. Phyllis is a licensed life, health, and accident insurance agent who has been in the financial services industry since 2006. She educates people about financial decisions and tools to empower them for their financial future. As the parent of an adult child with unique medical needs, Phyllis understands the challenges facing people in the rare disease community.
What Is Financial Literacy?
Financial literacy means understanding how to make, save, and spend money to manage your economic well-being. It includes concepts like managing personal finances, budgeting, and investing.
Phyllis likens financial literacy to reading literacy. Knowing how to understand and manage money, she says, is as crucial as being able to read. Yet schools don’t teach financial literacy as readily as they teach children to read. And financial literacy is especially important for individuals and families coping with a chronic condition like Gaucher disease.
“Affording long-term healthcare and planning for the many unknowns is particularly worrisome for those who have a rare disease,” Phyllis says. “Understanding how money works—and understanding the various tools designed to provide financial protection—is fundamental to easing concerns.”
One great thing about financial literacy is that “educating yourself breeds confidence,” Phyllis adds. “You feel powerful when you know how to handle your finances.”
Financial Basics for Families Affected by Gaucher Disease
For people living with Gaucher disease, some financial preparation is essential. Phyllis notes, “Just as people who have chronic conditions have to become their own advocates for their health, everyone—especially those with health conditions—has to become advocates for their financial needs. One hospitalization can wipe you out.”
7 Money Milestones to Secure Your Financial Future
Phyllis defines financial preparedness in terms of seven money management milestones. Here’s how those seven milestones break down for families affected by Gaucher disease.
1. Get a financial education.
The good news: You’re working on this step by reading this blog post. Phyllis recommends talking with a financial advisor or reading WealthWave’s book, “How Money Works: Stop Being a Sucker.” Copies are available through a Financial Advocacy RARE Patient Impact Grant awarded to the NGF through Global Genes. Contact Phyllis if you’d like a copy of the book.
You can start learning on your own with help from:
- Financial education websites such as the U.S. Treasury Department’s gov
- This quiz to assess your financial well-being
- Newsletters and podcasts about money management
- Apps like Spending Tracker or Mint that focus on budgeting and managing money
- Your library, where you can borrow books or audiobooks about finances and money without spending a dime
2. Protect yourself financially.
Everyone who has money (and that means everyone) needs financial protection in the form of insurance. Two key types of coverage you might need include:
- Health insurance: Everyone should have health insurance, especially anyone living with a chronic condition like Gaucher disease. Health insurance may include private coverage through an employer or other group, coverage purchased individually via a state or federal exchange, or public programs such as Medicare or Medicaid.
- Life insurance: Life insurance can shield you from the loss of a spouse, parent, or partner. Having Gaucher disease doesn’t disqualify you from obtaining life insurance. Getting this coverage can help anyone who depends on you financially. A licensed financial advisor can help you figure out how much coverage you need and which of these two types will work best:
- Term life insurance: You pay a flat premium for a set number of years, but you get nothing back unless you file a claim (when the policyholder dies).
- Permanent life insurance: A permanent policy is an investment. You can build cash value at no risk of losing your gains, and the money grows tax-free. You can take cash from the policy while you’re alive. When the policyholder dies, the policy pays a death benefit in a lump sum or annuity. Some types let you add long-term care coverage to your policy.
If you have trouble paying for health insurance or specific out-of-pocket medical expenses for Gaucher disease, the National Gaucher Foundation’s CARE Programs grants might be able to help. NGF accepts applications on a rolling basis for the upcoming calendar year, beginning in November. Please consider applying now, if you have financial hardship.
Other common types of insurance protection include:
- Home and property insurance, including renters insurance
- Life insurance
- Long-term care insurance
- Final expense coverage (to pay for funeral and burial expenses)
3. Have an emergency fund.
Everyone needs a rainy day fund. Most experts recommend having enough money set aside to cover six to nine months of basic living expenses. Note that this may not equal your full monthly budget—having enough to cover only the essentials may be a more attainable goal.
Store your emergency fund in an account where you can access the money if you need it but can’t easily dip into the funds. Some people use a money market account or an account at a different bank.
4. Stay out of debt or get out of debt.
Many American families owe thousands of dollars to student loan, credit card, and mortgage lenders. That debt can suck up a huge chunk of your monthly income. When you face costs related to a chronic condition like Gaucher disease, debt can be a terrible burden.
“It’s never too late to start to get out of debt, and it’s never too late to cut up your credit cards,” says Phyllis. “Most people don’t want to face their credit card statements.”
Begin by figuring out what you owe and what expenses you can trim to free up money to repay your debts. Stop using your credit cards, and begin methodically paying as much as you can to one credit card at a time. You will gradually see the total go down, but it isn’t always easy.
“Sometimes, you might feel that you have more bills than money,” Phyllis adds. “In that case, a coach or guide can help and encourage you.”
5. Build your cash flow.
Positive cash flow is having more money coming in than going out. Phyllis recommends that all her clients have a “side hustle”—a secondary income stream to ramp up income and savings. This income can help you pay off debt or build up savings faster.
Some people might make additional money by doing odd jobs or turning a craft or hobby into income. As a bonus, starting a business can reduce your tax burden with appropriate write-offs.
Even if you don’t have a second income, you can adjust your income and expenses to improve cash flow. Maybe you can eliminate subscriptions you don’t use, rent out a spare room or a garage, or talk to your boss about a possible raise.
6. Make your money work for you.
Once you’ve accumulated some funds, that money can increase on its own—with a little help from smart investing. Phyllis suggests gauging an investment’s value using the rule of 72. It’s simple: To find how long it will take an investment to double, divide 72 by the percentage rate of the interest on the investment. The result is the time to double your money, in years.
With a higher rate of return, your money can double faster—which could result in the opportunity to double your money multiple times in your lifetime. For example, if you invest $5,000:
- In a bank account earning 1% interest: 1% of 72 is 72 years. It would take 72 years to double your money. After 35 years, you would have about $7,000. (Note that most bank savings accounts return less than 1%.)
- In an investment earning 8%: Your funds would double in nine years. If you have 35 years to invest before you withdraw the money, your funds could double nearly four times. After 35 years, you would have almost $74,000. (If you left the money for 72 years, you’d have more than $1.2 million—without adding another dime.)
7. Protect what you have.
To protect yourself and your family, Phyllis recommends laying some groundwork. “And it doesn’t have to cost thousands,” she says.
A financial professional or qualified attorney can help your family put in place:
- Estate planning: A will and a power of attorney document tell others how to handle your financial goods if you pass away or become incapacitated.
- Medical paperwork: Several documents can ensure you have the help you need if you can’t speak for yourself. An advance medical directive tells your loved ones and providers what care you do or do not want to receive. A medical power of attorney determines who can speak for you.
- HIPAA release: A Health Insurance Portability and Affordability Act (HIPAA) release clarifies who can talk to your doctors on your behalf. This release is crucial for parents of adult children with chronic conditions. Without it, your child’s doctors can’t disclose details about the care of a child who is 18 or older.
- Special needs trust: If your child will need financial support after your death, a special needs trust is essential. A trust protects resources, including a life insurance benefit. Your child can still receive government benefits while maintaining an additional financial cushion. A qualified financial advisor can help you set up a trust. Find out more about financial assistance for people with disabilities.
What to Look for in a Financial Advisor
If all this seems overwhelming, it’s time to consult a professional. An advisor can help if you have issues like medical debt. They can also offer professional guidance about estate planning or where and how to invest.
When choosing an advisor, Phyllis says, be sure you’re working with someone who puts your needs before their profit. “A licensed professional will have the training to guide you, and they have taken educational courses, including in professional ethics,” she says. “An advisor should be helping you with your specific needs, not focused on selling you something.”
To find an advisor, ask trusted friends and family for recommendations, or use a search tool offered by a group such as the National Association of Professional Financial Advisors. Through the end of 2020, a complimentary consultation with Phyllis is available for those who are interested, thanks to the Global Genes Financial Advocacy RARE Patient Impact Grant. To learn more about Phyllis’ work or get in touch with her, visit her website.
Financial Support for Medications and Other Needs
If you need more help, reach out to your financial advisor and the National Gaucher Foundation. The NGF can help connect you and your family with resources to support your health needs, including financial support.
- WealthWave – 7 Money Milestones: https://howmoneyworks.com/phyllisshallman/money-milestones
- Global Genes – Financial Advocacy RARE Patient Impact Grant: https://globalgenes.org/financial-advocacy-impact-grant/