The Savings Imperative for Special Needs Families

You’ve probably seen the figures of raising a child. The often quoted figure of $240,000 is seemingly astronomical. Can you imagine if with the birth of each of your children you had to write a $240k check? That alone would probably solve our overcrowding problem. I would like to also note, that according to the Department of Agriculture, that 240K figure is the median, meaning there are many families paying even more! You can check out the report and logic here.

Untitled-ProjectTo be fair, that number is arrived by some “all in” math and includes what was spent raising your child from birth to 17 years of age to include a child’s share of housing, food, transportation, clothing, healthcare, child care and education, and miscellaneous junk we pamper our kids with. I think some of us would consider housing, food, and transportation in many cases as costs we would have spent across the entire family anyways. However, as a counterpoint, I distinctly remember the very emotional decision when our family grew to the point where we made the luxury decision to upgrade and enter into mini-van land when we purchased our Honda Odyssey (which oh by the way was the best decision of all time!).

Intuitively we know that raising a child with special needs cost more. It just does. Medical emergencies, co-pays, specialized equipment, therapies, respite care, and the many other slow drips to our checking account can raise the cost significantly. It’s been estimated that a special needs family (SNF) averages over $10,000 a year in out-of-pocket medical costs alone. But these costs are only the most noticeable and easy to track. There are also opportunity costs to consider.

Many SNF become sole income households once one of the parents must drop out of the workforce to care for their child full-time. We took great pride when my wife completed her Master’s Program in Social Work (Ok…so maybe not a golden ticket career for us!) with the intention of her working once the kids were all in school. We can now kiss that income stream goodbye. Hugh requires 24/7 supervision and it’s pretty dang hard to be taken seriously on any job when you have a kid in tow that you can’t take your eyes off of even for a minute. As a result, SNF are more likely to earn less than their peers. According to the 2010 Disability Status Report, SNF earn approximately $22,600 less than their peers and have the highest poverty rate at 32%. So take the costs of raising a child, add-on a lifetime of additional requirements and you get a very large number. According to Autism Speaks a child with special needs could require upwards of $1.4 million over the course of their lifetime. That is a big number. A really big number. A staggering number.

So what should SNF do? How can we even begin to save that amount of money, let alone paying our mortgage or rent, clothing, feeding, and educating our other children, plan for their college, and save for our own retirement? I don’t know how good you are at splitting a dollar bill 20 ways, but that is a tall order for anyone.

Have I got your attention yet? We SNF have a savings imperative. We more than anyone must have a solid financial plan in place to make it across the finish line. Winging it is probably not the wise choice. As the saying goes…Hope is not a method!

The good news is the immutable laws of money work the same way for us as they do for your proverbial millionaire neighbor next door. The time value of money, the power of compounding interest, the idea of spending less than you make all work the same. You can’t do it all at once. As the story goes, the elephant only gets eaten one bite at a time. So here is how you eat it; easy to say but sometimes difficult to put into practice:

Stop the Bleeding!

  • Gather your data, conduct a cash flow analysis, and budget!
  • Define your savings goals
  • Pay down your debt
  • Build up your emergency fund

Plan for your own Future

  • Conduct risk analysis
  • Build a retirement strategy
  • Invest wisely
  • Save, save, and save some more!

Plan for your Special Needs Child

  • Write a Letter of Intent
  • Get your estate plans in order
    • establish a Special Needs Trust
    • Will, Power of Attorney
  • Understand and apply for Government Benefits
    • housing, SSI, SSDI, Medicaid
  • Fund your Special Needs Trust
  • Adjust your beneficiary designations
  • Save, save, and save some more!

Protect yourself and your family

  • Health Insurance
  • Life Insurance
  • Disability Insurance
  • Long Term Care Insurance

Plan for your life Goals

  • Plan for college
  • Save for a house
  • Save for a car
  • Where do you want to be in 5, 10, 25 years?

That’s it. Simple right? The good news is you can do this. If you’re reading this blog you are likely the type of individual who is up to the task. That is what this blog is all about, let’s gang tackle this problem. There are families that are making it work every day. Let’s learn from them. If your one of them, we want to hear from you.

Categories: Savings


6 replies


  1. Stop the Bleeding by Learning to Budget – Finances for Special Needs Families
  2. The Corrosive Nature of Debt – Finances for Special Needs Families
  3. Withstand the Downpour – Finances for Special Needs Families
  4. 4 Steps to Build a Gritty Family – Finances for Special Needs Families
  5. What a Million Dollars Really Means – Finances for Special Needs Families
  6. Why Women Investors are Awesome and What We Should Learn from Them – Finances for Special Needs Families

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