A person with mental health issues has a myriad of concerns to deal with, and money management skills may fall by the wayside. According to the New England Mental Illness Research, Education and Clinical Centers (MIRECC), as cited by the Veterans Administration, over one in ten patients has difficulties managing funds. Furthermore, if addiction problems are present, funds are usually diverted away from food and shelter to support the addiction. Because of these and other concerns, professional money managers and coaches are often relied upon to teach money management skills to the mentally disabled.
Video of the Day
Setting priorities is the first step in effective money management. For example, rent may be $400 per month, electric service may be $200 per month and phone service may be $75 dollars per month. This totals $675 dollars per month. The mentally disabled person has to be made aware that this total is an absolute requirement at the end of the month, and the best way to achieve it is by saving funds, and not spending them on items they just want. A special savings account can be set up to specifically save the required funds.
Saving Some and Spending Some
After the needed funds are set aside, most people save some and spend some. This translates into most people put some money aside into long-term savings, and spend a little on discretionary items, such as a trip to the zoo or an amusement park. Percentages have to be set, such as 70 percent of funds will go into long-term savings, and 30 percent is "fun money," to be used to go out to eat or do other recreational activities.
Living Within Your Means
The mentally disabled individual has to be taught to live within his means. This translates into not overspending discretionary funds. For example, if a trip to the zoo costs $300, but there is only $100 in discretionary funds at the end of the month, then the zoo trip will have to be postponed until enough is saved up. Another example is not eating in a restaurant that charges $50 for a meal, when there is only $20 available for eating out. Living within your means may be hard to do, since many people, disabled or not, cannot exercise self restraint in this area.
This is interconnected with setting priorities, long-term savings and living within your means. A money manager has to sit down with the disabled individual, and explain to him what a budget is. For example, if he has an income of $1,500 a month, then $675 has to be set aside for rent and utilities. This leaves $825. Saving 70 percent of this (.70 times 825) translates into putting $577.50 into long-term savings every month. This leaves $247.50 per month (or $61.75 per week) as discretionary or "fun money," to be used to go out on dates or other recreational activities.
A person with mental disabilities may not be able to distinguish friend from foe. Con artists prey upon easy targets, and exploitation is always a concern. For example, an individual may have friends that only show up when the Social Security check arrives, and they "help" the person spend their money by eating at fine restaurants or spending it on luxury items for themselves. Con artists may be extremely good at their craft, and learning to spot a con is a skill that has to be taught and developed effectively.