Wednesday, March 9, 2011

Daily Living Skills Series: Budgeting Interventions

Managing money is a difficult task. Many people with and without a disability struggle with money management, and make poor financial decisions on a regular basis. Having a disability often adds poverty to the struggle, due to being unable to work. Cognitive deficits can make it difficult to understand finances, and impulsivity can lead to poor choices. Cigarette use is greater with people with a severe and persistent psychiatric illness such as schizophrenia, which puts added strain on the budget. Yet a minimum level of money management is important for living independently. Budgeting is one of the most common areas that I have provided intervention in.

I often start by finding out where my client's money is going, how much money is owed to whom, and which bills need to be paid. Having your client record all of his or her expenses can be helpful if he or she tends to run out of money quickly and not know where it goes. Often people are not aware of all the little things they spend their money on - the coffees, energy drinks, magazines, cigarettes, bank fees, etc. They can be quite surprised by how much these little" expenses add up to.

The two ways I have found helpful for recording expenses are to either keep receipts and record them weekly, or to use bank statements/credit card bills at the end of the month if the person does not use very much cash. It is important to ask your client about the items that there are often no receipts for, including eating out, bus fare, and vending machines. I often summarize the spending in different categories for the month. Common categories include: rent, groceries, eating out, medical/dental, debt repayment, entertainment, personal care items, cigarettes, transportation, bills (e.g. electricity, water, telephone), household items, clothing, alcohol/drugs, bank fees.

Once you and your client have an idea of where the money is going, it is possible to plan for how your client will spend money the following month. It can be helpful to figure out how much money is needed to cover essential expenses, in order to know how much money is left for non-essential items. This may also be a good time to talk about ways to reduce spending.

Organizing bill payments by using a calendar to record when bills are due, and how much they are, can be helpful. Expected income can also be recorded on the calendar, to help with planning.

Unfortunately, I have found this approach is often not sufficient. Too many people I have worked with struggle with impulsivity and even though they know they should be saving to pay their bills, they simply cannot resist spending their money. Others have addictions (cigarettes, alcohol, gambling, illegal drugs) that seem to come before paying rent or buying food.

In this situation, harm-reduction is what I have found works best. I encourage the client to pay his or her essential expenses immediately after receiving money. This means paying bills way before they are due, or sometimes putting money on an account even before the bill has come. I also encourage the person to shop for enough groceries to last until the next cheque. This can mean buying extra bread to put in the freezer, and items that last a long time such as a bag of oatmeal or a jar of peanut butter. One client I worked with bought a package of wieners and a package of buns, and only ate one hotdog per day. Not the best nutrition, but it helped her last the 2 weeks between cheques. This means the important things are covered, and if your client blows what money is left, that's OK.

When impulsivity and/or addictions are a problem, limiting access to money in the bank can be helpful. If a person does not have a bank card, he or she must wait until banking hours to access that money. Banking hours tend to be different from typical drug dealer hours. Some bank accounts will allow you to have a separate account that you are required to give 24 hours notice to access.

I have had the situation where even this does not work. There still are a couple options left. One is to have the money directly deposited to a trusted family member's account, who then pays the bills and provides a living allowance with the rest. Occasionally people will have the Public Trustee handle their money. My experience with this is that clients usually hate it because they feel they should receive more money. However, in my experience, the Public Trustee has been excellent at providing money for anything that is needed (e.g. medical equipment).

Budgeting can be a difficult area for anyone to work on. I would love to hear if you have some ideas of what has worked for you or your clients.


  1. I always think that personal care is an area where I don't win by cutting things out. Being hygienic and clean makes me more presentable, but there are some ways to trim spending without affecting appearance by purchasing lower-cost brands.

  2. In any cases, addictions can be very harmful. The psychological underpinnings of addiction is damaging enough to ruin lives.

    drug rehab new york



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