5 Money Mistakes Parents of Special Needs Kids Make

5 Money Mistakes Parents of Special Needs Kids Make

Children with special needs require a lot of attention and care, so parents need to be extra careful when planning their future so as not to make any plans that will put their child in jeopardy or have a serious, long-lasting effect on the child.

In some instances, when the child grows, he or she may not be able to qualify for vital benefits from the federal government or the parents might die without making monetary provisions for the child. This article is centered on parents of special needs kids and the mistakes they make when planning their estates.

1. Disinheriting the Child

When children with special needs reach adulthood, they tend to rely on the federal government to help with their fundamental needs like food and shelter. This is often done through federal means-tested programs (a program in which the recipient’s financial resources determines the eligibility) like Supplemental Security Income (SSI) and Medicaid.


Parents are often advised to disinherit their child to enable them to qualify for the federal programs. This advice is not really the best for a special needs child because these federal programs offer very low finances. A special needs child may not be able to work to get additional money to help out like their counterparts who do not have special needs.

It is more advisable for the parents to open a Special Needs Trust (Supplemental Needs Trust) for their child. The parents can put money in the trust for their child without any risk of disqualifying the child from benefitting from federal programs.

Other family members or well-wishers can also leave money in the trust or set up another one. Also, if the parents die or become impaired, the child’s trust will be able to support the child.


A Special Needs Trust needs to be set up by an experienced attorney to avoid complications. It is important not to do it on your own; an attorney can help you align your life insurance, retirement accounts, and other beneficiary accounts with the Special Needs Trust of your child.

2. Procrastinating

Parents need to plan in advance for a time when they’ll die or simply won’t be able to cater financially for their child. Since nobody knows what could happen tomorrow, the earlier we plan, the better we can secure our children financially. Parents who do not plan ahead could die and end up leaving their special needs children with no resources to maintain the standard of living they were used to. Especially for parents who own businesses or do freelance work, setting up automatic systems for taking care of business concerns needs to be done today, not tomorrow.

3. Not Making Your Planning a Team Effort

Parents cannot work alone when making an estate plan for a special needs child. The process is very complex and therefore requires the services of people experienced in special needs planning to make sure the plan goes well. They need an attorney with experience in special needs, a life insurance professional that will help plan the money needed to increase the benefits needed for the child, a CPA to prepare the tax return of the trust, an investment adviser to manage the finances so that the money in the trust fund will last for the whole of the child’s life, and also any other advisers that may be able to help in the success of the trust.


4. Ignoring the Particular Needs of a Special Needs Child

Plans that are focused on the particular needs of a special needs child have to be made. If the planning doesn’t meet their needs, the child will not qualify for government benefits. Setting up a proper Special Needs Trust will satisfy the child’s needs and also allow the child to be eligible for benefits. The trust must satisfy a lot of needs, like medical bills, annual check-ups, any special equipment (like a specially equipped van), training, education, insurance, transport, and feeding.

A properly funded Trust will go much further in providing the child with electronic equipment, appliances, and computers, fund vacation trips for them, allow them to go to the cinema and have a good living situation, and provide many other things that a parent wishes for their child to improve their quality of life.

A generic or “form” special needs trust has very strict distribution policies, and so the child may not be exposed to some things that he or she would normally have enjoyed.


5. Including a “Payback” Provision in the Trust

Payback in the trust means that if the child dies, any money remaining in the trust is given to the government and not the family. This payback clause is a mistake made by most parents. An experienced attorney can be employed to make sure that money left goes to the family instead of the government.

Featured photo credit: Visit St. Pete/Clearwater via

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.


So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.


Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.


You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.


Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via

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