Final answer:
Barry, who is on disability, should have a plan for managing his liquidity to ensure he can meet his financial needs with a reduced income. Liquidity management is important for handling sudden expenses, and understanding available government and employer benefits can assist in financial planning during disability periods.
Step-by-step explanation:
Barry gets hurt at work and must go on disability for 4 months. On disability, the pay that Barry receives is 60% of his normal net pay. Barry should be fine if he has a plan for managing his liquidity. This refers to his ability to manage his available cash or assets that can be quickly turned into cash to meet his short-term needs, especially given that his income has been reduced to a fraction of what he usually earns. Having a liquidity plan is crucial in facing unexpected expenses or financial emergencies, such as a job loss, medical expenses only partially covered by insurance, or home repairs from unforeseen events like a flood.
Governments offer various forms of support like disability payouts under the Social Security benefit program, which requires qualifying workers to demonstrate that their injury or incapacitation will last at least twelve months. In addition, workers may have access to workman's compensation insurance, pension funds, and additional employer or state benefits to help manage during the time they are unable to work.