Children with special needs also require special financial planning. So, listen up parents, here’s how you can plan for your child.
An African proverb says that it takes a village to raise a child. It means that an entire community of different people are involved when it comes to raising a child in order for that child to have a safe and holistic upbringing. That said, children with special needs require special attention and care.
Additional Reading: Financial Planning For The Differently Abled
It also means the costs involved in taking care of children with special needs are relatively higher. Because, as parents, you will have to factor in expenses like the cost of medicines, therapy, domestic help, transportation, and costs for other tools or gear to empower your child.
Thus, it is critical that you either save enough money or have a solid plan to back you up on the financial front. You need to have a long-term financial plan to ensure your child is well provided for even after you are gone. And if you haven’t thought of an elaborate plan yet, fret not.
Additional Reading: How To Plan Finances For A Differently-Abled Child?
We will help you come up with an intricate financial plan to care for your child with special needs. Here’s what you need to do.
Create a monthly budget
By now you surely know what your monthly expenses look like. Whether it is paying for medical bills and therapy or other ad hoc expenses related to your child, you will have a rough estimate of how much you spend on your child.
The next thing you need to do is to create a monthly budget and set aside that amount to take care of your child. Of course, you are bound to go overboard sometimes during emergencies, but you’re more or less prepared for what’s to come if you have a budget.
Get a smart insurance plan
As parents to a child with special needs, you need to get life cover which is at least 12 times your annual income. That’s only because you need to think about providing for your child if something ever happens to you.
It will make sense for you to invest in annuity plans to ensure continuous cash flow as your child ages or for when you retire. You should also research Health Insurance policies that are available for children with special needs.
Additional Reading: Get Insured Against Disability
Build an emergency fund
While it is important for everyone to build an emergency fund. As parents to a child with special needs, this is crucial for you. This fund should be used for contingencies and expenses related to your child alone.
You may want to consider having two emergency funds, one to take care of your overall ad hoc expenses and one that is solely for your child. These savings must be parked in liquid funds and Fixed Deposits that can be easily withdrawn during times of need.
Additional Reading: Why Build An Emergency Fund?
Make a will
Creating a trust and appointing a trustee will mean that your child will not have to go through any monetary glitches post your death. The income earned from your estate or assets will be handed over to your child or can be used to take care of him/her even after you and your spouse are no more.
While we recommend having a trust set up for your child, the idea of having a will is also a great option. You can create a will to leave behind your assets and an executor who will help your child with the proceeds.
Additional Reading: Will Vs. Living Trust – What’s Better?
Invest in financial products
Saving money isn’t enough. When it comes to financial planning for your child, you need to think of investing too. Investing in financial products like Mutual Funds, Equity Linked Savings Schemes (ELSS) and other similar investments will give you high returns. This, in turn, will help you create wealth and save enough for your child.
Work on acquiring skill sets
As a parent, you must also focus on creating a sustenance model for your child. A differently abled child may possess other sharp qualities that you can look to convert into an ability. Use those skills to help your child build a sustainable life.
You can teach your child how to use his/her special skills to either make a living or start a small business from home. For instance, if your child shows an interest in art or painting, you can enroll him or her at an art class and slowly get them to work on pieces that they can sell on a website or a store. This will also teach them a thing or two about handling finances.
When it comes to finances, we have some great tips and tricks for you. Want to learn more about money? Just check out our website!