“You'll need $2.8 million to take care of your child for their life.”
I've never heard a sentence more deafening than that. My husband and I sat there, staring blankly back at our financial advisor.
I swear I could feel my heart slow, and my brain spun out of control as my husband and I faced the truth.
Our little one would need a lot of financial support—more than we could ever hope to accumulate.
You see, our 5 yr old daughter has Cerebral Palsy, and she’s physically disabled. She most likely will never walk, won't be able to sit up unassisted, and has limited use of her arms.
Yet she’s smart, funny, loves to be read to, and devours pizza like a champ!
Cerebral Palsy, like many diagnoses, ranges in the severity of symptoms and secondary conditions. Children can be mildly affected, needing occasional help, or significantly affected, needing 100% care 24 hrs a day. Every child is different.
Let's not sugar coat it; having a disabled child isn't cheap. In fact, it's expensive, very expensive.
If you're a new parent of a special needs child, you need to start planning now, getting two steps ahead of the hurdles and inevitable costs to come.
The must do's of planning for a special needs child
If you're a parent of a disabled child, what do you do?
There are absolutely some basics you must cover!
You want to dot the i’s and cross the t's of planning for a special needs child's future. It's best if you get these things set up ASAP!
Don't wait until your child is turning 18, as you lose so much potential for investment growth. In fact, our special needs financial planner said this is their client's biggest mistake!
In addition to the major things, there are also costs people don't readily hear about. They get overshadowed by the big-ticket expenses, yet they add up to be just as costly. So I’m going to tell you about them.
Hidden costs of raising a child with a disability
1. Downsizing your job
Most parents can juggle the commitments of work and family. But having a child with a disability adds in a multitude of other obligations and time commitments.
There are Dr's appointments, therapies, evaluations, study's, equipment trials, follow-ups, and meetings. These each come with a financial cost.
Then there’s the time cost of the appointment, drive time, and what you're giving up to go to these appointments, as therapies and doctors do the typical 9-5 weekday schedule.
If you work in an office job, you may need to make some sacrifices. Either by going down to part-time or giving up your career completely (for a while).
It may not be feasible for your family to live on one income, so you may need to switch to a career in an industry conducting business on the weekends or evenings.
Cost: We decided after some part-time work shuffling that I would leave the workforce and stay home with our daughter. This equated to losing about $2,000 a month in gross income.
2. Supplemental insurance
Medical Insurance: Not surprisingly, your medical costs will increase. You'll want to go up to the highest level of care insurance plan your employer offers.
You may also want to consider secondary insurance (i.e., double coverage) to ensure all your medical providers are in-network, and you pay as little out of pocket as possible.
Cost: $200 a month for secondary insurance. My husband is in the military, so that means we have access to TRICARE. It may well cost you more.
Life Insurance: In most cases, whole term life insurance doesn't make good financial sense. Term level insurance is what most experts recommend. Yet, in looking at your finances, you may decide to do both a term and a whole insurance policy.
Remember, term insurance is there to cover the costs of care for your family while you still have large expenses (house payment, car payment, college, etc.). You pay into it for 20 or so years, and then (hopefully) you’ve paid off those large obligations and can consider yourself “self-insured.”
Yet, a whole life policy could make sense for families needing to leave a large chunk of money behind to help care for their loved one when they cannot do so.
Remember, at the beginning of this article, the $2.8 million needed. For us, this whole life policy will help narrow that gap between the assets & investments we leave behind and what is still required).
Cost: $300 a month in a whole life policy monthly premium (this is in addition to our term policies of $66 a month for both my husband and myself).
3. Medical costs
Wouldn't it be nice if your medical coverage covered everything? Well, sadly, it doesn't.
Most commonly, you pay your deductible every year, and then your insurance pays 80% or so. While having some things covered 100% (i.e., routine checkups, etc.).
You’ll receive referrals to Dr's who aren't in-network. Or procedures they consider “elective” and are thus not covered. There are then, of course, prescriptions and vision and dental coverage too.
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Also, going through insurance for equipment can be a lengthy process.
There are many horror stories of parents waiting 6+ months to get their child's wheelchair modified or new parts received. Or for equipment to help their child learn to walk.
Paying out of pocket may be a parent's only choice to get the item their child needs promptly. Usually, companies may offer a cash discount in these cases, but it's still expensive.
Cost: varies, usually a lot. Two years ago, we paid $5K out-of-pocket (OOP), last year, we paid $3K OOP, and this year will be similar or more due to multiple surgery evaluations out of state (and out of network with insurance).
Let's average it and say we pay $4,000 OOP annually.
4. A new car
When you have a child with a physical disability, that means either a manual wheelchair or a powered model. At best, you have a walker.
Most of the above items don't fold up (unlike dinky hospital wheelchairs). So unless you're already driving a large van or SUV, you’ll most likely need a new vehicle to carry everything around.
As your child gets older, their equipment needs will grow, and so will your transportation needs.
Many vehicles will also need aftermarket conversions to be able to carry a wheelchair safely. These modifications aren't cheap by any means. Yet there are some programs & insurance options to help.
Cost: For us, it was $0 as my parents (who recently stopped driving) gave us their vehicle that could carry my daughter's pediatric manual wheelchair. But, the cost could easily be substantial. We were fortunate.
As an example, Nerdwallet reported (with Experian's help) that the average monthly cost of a used car is $381, with the average loan amount of $19,861, lasting over 64 months. That’s for just the vehicle, not any modifications.
5. A new home
This can be the hardest one, as finding a new family home isn't ever a walk on easy street.
You'll have special requirements for your new home…
- Single level (no stairs anywhere if at all possible)
- Easily accessible and flat backyard
- Wide hallways and door jams to make wheelchair use easy. (Most likely a newer built home has these, so nothing built before the 1980s.)
- Walk/roll-in shower and large bathtub
- Lots of storage space for all your equipment needs
- Paved driveway and sidewalks in a flat neighborhood
- A good school district. This can be tricky, as finding an affordable house may mean looking in more rural locations. The more rural you go, the greater the chance that funding for special education resources (teachers, teacher aid, supplies, building code, etc.) is more limiting.
Cost: It took us four months to find the right home and have an offer accepted. The home was more expensive than we liked, but our options were minimal.
We had some equity built up in our old house, so we used the majority of it on a down payment ($80K). Our monthly payment stayed the same, which wasn't great. We absolutely lost ground.
We also spent $5,712 to sell our old home (repainting, etc.) and inspect the new home.
6. Wear and tear on the parents
Being a parent of a special needs child means your health and wellness come second. Always second. Even being just a regular mom usually means this, yet it's magnified exponentially with a special needs child.
Your “free time” is now non-existent, as you spend all your time researching new therapies, medications, googling equipment, and even figuring out DIY options.
You’re an appointment scheduler and a chauffeur. You get on a first-name basis with your insurance company because there are inevitably mistakes with billing, and you call them weekly.
The Huffington Post reports, “While there are no comprehensive statistics on medical-billing mistakes, Stephen Parente, a professor of health finance at the University of Minnesota, told HuffPost that his unpublished research put it at 30 percent to 40 percent of all bills except pharmacy bills. Groups that review bills on patients' behalf, including Medical Billing Advocates of America and CoPatient, put the error rate much higher ― closer to 80 percent to 90 percent.”
One of the less-discussed issues is the strain parents’ bodies face due to simple everyday care for your child.
Kids grow like weeds and get heavy quickly! From my own experience carrying a 40lb preschooler around was wreaking havoc on my back, neck, and shoulders.
For example, every year, I use up my chiropractic benefits early on and then go on a paid OOP monthly plan. Not to mention the deep tissue massages to work out the knots that come from the constant strain.
For not only are we carrying our child, but we're also stabilizing them, which takes a lot more muscle control. Imagine a 40lb weeble wobble in your arms, who's also trying to poke your eyes out for fun.
Cost: $160 a month for care, which, if I could, I'd bump up to $250.
There are so many little things you need when you have a disabled child. Shoes, as an example, are an incredibly hard one to swallow.
When most parents spend $20 on a pair, the ones that fit over a special needs child's AFO's (leg braces) cost $60 a pair.
Many kiddos need adaptive toys too. While a bike for a typical preschooler can be anywhere from $30 – $100, an adaptive bike is $1,500 – $3,000, depending on the necessary level of support.
Some insurances will cover part, and some won't.
Other children need special food for G-tubes, larger sized diapers, adaptive clothes with special fastenings, support pillows, etc. The list goes on and on.
Cost: $200 a month, averaged out over the year. These are costs over and above typical items for kids her age.
8. Travel costs
There will inevitably be travel costs associated with all the appointments you need to attend. Increased daily wear & tear on your car, as well as one-off trips for such things as hospital therapies, and private therapy centers.
For example, there are two facilities in the Pacific NW (in a three-state radius) doing pediatric therapy intensives (that's when you go for about 4-5 hrs a day every day).
Many families drive 300+ miles, stay in hotels, and eat out for an entire week. Not to mention income lost to take time off from work to attend.
You may often receive a referral to an out of state provider who specializes in a specific surgery. That could be across the country from you.
So you need to fly out for evaluation and approval, and then fly out again for the surgery. Additionally, you may need to stay a significant amount of time for rehabilitation programs.
Many children's hospitals have a Ronald McDonald house near them for just these situations, yet this isn't always the case.
Cost: varies, but over a year, let's average it to $100 a month. We took a two night trip (for surgery evaluation) and drove 300 miles away; it cost $700 or so.
The Grand Finale: Total hidden cost of raising a child with a disability
Again, I want to state that this is my family's own experience. There are many different kinds of “disabilities.” So everyone's journey will look a little different.
- loss of one income: $2,000+ a month (gross)
- supplemental insurance: $500/month
- extra medical expenses: $4,000/year
- parent wear & tear: $160/month
- supplies: $200/month
- misc expense: $100/month
- TOTAL: $15,520 cost per year OOP, plus lost income of $24,000
Of course, being a dollar figure, it doesn't account for the hours and hours of time, stress & worry, and the mental and emotional toll, that goes along with being a special needs parent.
The best way to prepare for the unexpected costs
Adding on the expenses that come with a special needs child, it's essential to budget your money and plan for the unexpected.
Creating multiple sinking funds and using a pay yourself first model has been the key to finding a financial balance.
I’ve detailed the process of how the money flows in and out of the accounts (link below), which works amazingly well. I’ve budgeted like this for the past eight years and have no plans to change!
Essentially, every month you set aside a specific dollar amount into an account for later use. It could be a vacation fund, car repair, home repair, or a kiddo fund.
You set this up as automatic withdrawal right after payday, because your financial health and goals are your most important commitment.
Ways family & friends can best help a special needs parent
If you have a friend or a family member who’s a parent of a special needs child, then take heart; there are so many ways to help in a meaningful and unbelievably helpful way.
- Contribute funds to their ABLE account. A parent's worst nightmare is the unknown of what may happen when they're not there to take care of their child. Having funds in the account to use later on gives us such peace of mind! For birthdays or Christmas presents, people can contribute via the ABLE's online gifting page. Just ask the parent for their account number. If they don't have one yet, help them set it up.
- If you want to give the parent the best present ever, provide them with a mini-vacation. Set them up at a local hotel for the weekend. Or let them stay at your house while you’re at their's with their kiddo. Leaving parents at their own home is nice, but then they'll probably try and do all of the chores and things on their fix-it list since they can never seem to get to them. Parents of special needs children desperately need time to relax and recharge.
- Help clean their home, or find a cleaning service. Even if it's a one-time event, it's one of the best gifts you can give! Just like normal moms, cleaning takes a back seat when we're time-crunched, stressed, or overwhelmed. That means our house is basically a mess every day.
Don't lose heart due to the finances
It's not all doom and gloom. Along with the lowest of lows comes right behind the highest of highs.
I can't even begin to explain the level of joy I felt when my daughter scooped all her yogurt out of her bowl all by herself!
She was so proud of not needing any help. I let her finish the rest of her lunch while I sat down in the laundry room and cried the happiest of tears! My body shook the walls with the amount of emotion pouring out. It's a moment I won't ever forget.
Yes, the expenses are enormous, no doubt. Doing this parenting work can be intimidating, hard to swallow, and draining.
Yet, financial planning while your child is still young will let you build a base that can compound for decades.
There’s so much peace of mind that comes from building that base. The security it offers cannot be matched.
I want for you too that peace of mind, and the security that will fill your heart knowing you're doing everything possible for your little warrior!
Article written by guest contributor, Kari Lorz, who writes at Money for the Mamas, where she helps Moms (just like you) gain the skills and the confidence to manage their money better. All so they can create a secure financial future for their family! Be sure and check out Kari's article on Why Sinking Funds Are Your Ticket to Buying Anything You Really Want! and find her on Facebook.