How to Budget for a Special-Needs Child
Posted on August 29th, 2010
There’s no bigger blessing in life than learning that you have a child on the way. While you may be more than thrilled about the newest addition to your family, you know that only a few months away, you will need to make major budgeting adjustments to pay for short- and long-term necessities.
While everyone sees their financial need intensify upon becoming a parent, those who have children with special needs have even more to think about. Depending on the level of need, they may have to make adjustments that last the child’s lifetime.
So how do you begin to budget for your child with special needs when you don’t know where to start? Here are some ideas to think about:
Consider the Special Needs of Your Child
No two children are created exactly the same, which is what makes them so incredible. This is the case with special needs children as well. Some parents have children with a chronic issue like diabetes, while others may have to deal with learning difficulties such as dyslexia.
Of course, the level of need for children with mild or manageable mental or physical conditions could be very different than child development issues like Down syndrome or cerebral palsy, where the likelihood of self-care over a lifetime may be slim.
In these cases, more planning may be necessary to ensure that the financial stability of your entire household is secure, even after you and your spouse have passed on.
Budget for Daily and Short-Term Needs
When raising a child with special needs, creating a budget (if you don’t already have one) is paramount. As you probably already know, there are the basics that you should consider in your budget, including monthly bills, food, occasional bills, entertainment and more.
However, with caring for your special needs child, you also want to add other necessities including medication, therapy, equipment, nannies and anything else that will ensure that your child gets daily needs met.
If your child is on a special diet, you could open a savings account just for his or her food. The same goes for special shoes, learning books, physical activities and anything else that will not only maintain your child’s livelihood, but enhance it.
Of course, if your child has a medical condition then quality health insurance is crucial. You not only want to make sure that you have the coverage you need to take care of the condition, but you also want to make sure that you have enough set aside to pay for deductibles.
In addition, it’s good to prepare for any emergencies if your child’s condition is one that results in emergency room visits more than the average child.
Think About Your Child’s Future
Possibly one of the most difficult ways to plan for your child financially is when thinking about an unknown future. If you believe your child will not be able to manage self-care when you’re gone, you must figure out what financial necessities will be in order in the long term. Here are some things to consider:
- Retirement funds: As you’re setting aside money for your retirement, it’s good to have multiple accounts set up (401k, IRA, managed stock funds, other investments) that may help prepare for a life with three people instead of two.
- Last Will and Testament: The standard will can make sure all money and additional assets will be left to your child when you pass.
- Special needs trust: A special needs trust (also known as a supplemental needs trust) provides an unlimited amount of assets to a person under a physical or mental disability or a person with a chronic or acquired illness. Experts recommend you take it out as a standalone document (and not a part of your will) so that family members can make claims if needed.
- Life insurance: Acquiring a life insurance policy is an additional way to ensure your special needs child is properly cared for after you’re gone.
- Protection of government benefits: The special needs trust is a good way to protect government benefits because it allows money to be set aside and accessed without it being considered countable assets that could deter the government from distributing benefits. Down the line, it’s important to know what the limits are so that monthly assets do not exceed the max and allow your child to continue receiving benefits throughout life.
It’s also important to never underestimate the emotional toll that a special needs child could have on the family. While you’re never lacking in love, you might need support to help you through the tough periods. If you think this is you, consider family counseling, get the support of your family and set money aside to take trips as a couple when you’re feeling overwhelmed.
Your bundle of joy is undoubtedly the best thing that’s ever happened to you and with a lot of short- and long-term planning, you can make sure that your child’s needs are met throughout his or her lifetime.
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Tags: Child, Specialneeds Child
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