About the Author
David Fulton is a Colorado Springs, CO fee-only financial planner providing Hourly and On-Going Financial Planning and Investment Management. While he works with a broad range of clients, David specializes in working with Active and Retired Military, Federal Employees, and Families with Special Needs Children.
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You've probably seen the figures of raising a child. The often quoted figure of $240,000 is seemingly absurd. Can you imagine if with the birth of each of your children you had to write a $240k check? 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.
To 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 and includes 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 purchase the oh so sexy mini-van. Which oh by the way, was the best decision of all time. Trust me on this.
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 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 Special Needs Families become sole income households as one of the parents are forced to make the tough decision to 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, but certainly one we were proud of) with the intention of her working once the kids were all in school full time. We can now kiss that income stream goodbye. Our son 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, Special Needs Families are more likely to earn less than their peers.
The 2010 Disability Status Report found that Special Needs Families 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 a Special Needs Family 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? Special Needs Families 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 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. The proverbial elephant only gets eaten one bite at a time; easy to say but sometimes difficult to put into practice.
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. Recognizing the size of the task is the first step. Taking action is what comes next. We can help you develop an actionable plan for the future.