Having a child with special needs has a significant impact on parents’ personal finances. Maybe one parent has to reduce their working hours or has to stop altogether to become the full-time Carer. This has an immediate impact as less salary comes into the family household each year, to the long-term impact of Carers having a reduced pension in the future.
I always worry for parents when it comes to finances because the more parents struggle with their finances then the less will be eventually transferred into their children’s special needs trust. This will restrict the options Trustees will have when it comes to paying for children’s future needs when parents are no longer around to care for them.
Parents can struggle each month to stay out of expensive overdrafts and one unforeseen bill or a medical appointment can put huge stresses on their finances.
Now, most of my families have the additional pressure of COVID 19.
I have a few suggestions that I hope can help everyone manage their finances a little bit better during these tough times. The first main point I want to make is that will power is overrated and doesn’t work over the long term. It is like going on a diet and at some stage, your weight will yoyo back up. What is much more powerful is to put in place clear strategies and focusing on a positive future for your child and family when you have more disposable income.
Automate Everything
What I mean here is set up standing orders and direct debits to be taken from your bank account the day after your wages are paid in. Set up separate accounts and names them such as Holiday Fund, Nest Egg, Education Accounts, etc. Just be careful when setting up separate accounts you are not incurring additional bank charges. If this is the case then maybe withdraw cash from your main account and put the money into envelopes to store in a safe at home.
Balance your bank account every week until you are on top of everything then I recommend going to monthly checks. It is even easier to do now that you can go online and see your monthly statements. Add up all your expenses and take it away from your income and this will quickly tell you if you need to make more drastic changes. As online banking brings many benefits it also brings many downfalls as frictionless transaction are now easier than ever. It might be better to take cash out each week and leave the credit cards at home.
Special Needs Account
Open a special needs bank account for your child. This will be the account you use to pay for any private therapies, consultants, reports, medication (not covered by Medical Card). This will make it easier for you to track the yearly expenses you are incurring for your child and should make it easier for you to claim on your health insurance or complete your MED1 form each year.
Instead of receiving gifts and toys that are not suitable for your child why not try to encourage friends and family to gift money for birthdays and events to this account. You can then follow up by explaining how you used their money for therapies or to purchase specific toys that can help your child achieve a task or for a fun day out.
Spend less, save more
It’s worth reviewing regular outgoings, like TV packages, utilities, gym memberships, apps you may not use anymore that you may be able to freeze or cancel if you’re not getting value for them. Just remember to check any terms and conditions beforehand to see what your options are and when (or if) you can make changes.
Signing up to supermarket loyalty programmes, where you build up points based on the money you spend and which can offer you discounts and vouchers, may help you to save money on your grocery shopping.
There are lots of free apps and budget calculators that can help you better manage your money. Have a look at all your outgoings bills and set time aside to shop around.
Speak to your employer on working from home a few days a week. This alone could make you big savings on travel cost and lunches and you may also be entitled to claim some tax reliefs from the Revenue due to having to work from home.
If you find savings then redirect any savings into a separate account immediately.
Assess any debts
Debts that may have been affordable could now be causing you to worry if your expenses have increased or your income has dropped. If you’re having trouble with loan repayments, you should contact your provider directly to talk through what options are available to you. Financial services companies offer a range of measures to help customers in financial difficulties such as payment break on loans of up to three months for customers.
The payment break means you have the option of not making your loan repayments for up to three months and your credit record won’t be adversely affected. At the end of the payment break period, your repayments will be adjusted so your loan will be repaid within its original term, so your new repayments will be higher than they were before the payment break. Credit unions make decisions at a local level, so if you have concerns about meeting your loan repayments to a credit union, you should contact them directly.
Take action
If after trying a few of my suggestions and you are still struggling to pay down debt, clear your loan and get on top of your credit card then it might be time to get some professional help. The first place I suggest is the government’s free independent service called Money Advice and Budgeting Service. For more information https://www.mabs.ie/en/