My spouse, an occupational therapist, works with an NGO which runs a school for children with disabilities. She very often narrates stories of parents of these children who come to them not only to seek guidance for their child’s needs but also on financial matters. Reason, they are not able to prioritize their goals, while advice from financial advisors is restricted to product sale.
When a child is born, especially if it’s the first child, the incredible joy of parents is difficult to describe. The child becomes the center-stage of all celebrations. But very often concerns revolve around all these emotions – that of getting the desired education from school system and protecting child from all kinds of threats. However, in case of special children parents, these are concerns much larger. Regular medication, special schooling, and constant care for a child who has disabilities are but natural concerns.
The financial planning approach for parents of a special child is based on certain factors which help them in providing their child with a secure future along with meeting their own life goals. Planning for two generations – self and child, regular schooling and medical expenses like occupational therapy, physiotherapy or vocational education, child life expectancy, future income growth and help from friends and relatives are areas around which the plan is created.
Although, creating a comprehensive financial plan is thought as a time consuming exercise but with a little discipline and working on some basic areas of personal finance, parents can make sure that their child needs are adequately addressed.
- Budgeting: This is the starting point to learn about managing your money. Inflation has been hovering around 10 per cent and the cost of education is increasing by the same rate. Parents have to bear extra expenses like cost of adaptive devices, wheelchair or any other supportive material for the child. If not factored in your budget it can make managing money difficult even for your other goals. Hence, create a budget for your family and follow it rigorously.
- Family protection: For a family, the survival of a breadwinner is the key to a child’s future. If a bread-earner dies or is disabled, the family not only loses income but single parents also finds it difficult to take care of such a child. For a family living on rent, the life becomes more difficult. If they have to move from the house, then to find a suitable house with requirements to take care of disabled child is a daunting task. The expenses increase two-fold. Thus, parents should have a suitable cover, which in case of any mishap can support the family. Life insurance companies like LIC have designed products especially for disabled children (Jeevan Adhar), which if bought under MWP Act, can help immensely in giving the desired benefit to the child.
- Education: Education of special children requires more time and personal care from parents. Expenses increase for arranging transportation and customized learning material. Thus, it is necessary that money is set aside for these expenses.
- Retirement planning: There are many parents who have complained “I am worried about saving for myself as I have to transfer money for meeting my child’s needs”. If not planned, the unexpected expenses can make your retirement life miserable. Once you have created a budget, set aside money for your own retirement too.
- Wills and Trust: The biggest concern for parents of special children is about who will take care of the child when they are not around and continuity of education and treatment. Many parents want to provide the same level of benefits to all their children. But the child with special needs does not get the desired status because of legal complications or a possible disqualification from government support. Sometimes, the narrow thinking of relatives becomes the reason for child being neglected. In this scenario a Trust created for such children can provide the required support and fulfill the needs when parents are not around. The trust can take a shape based on the child’s requirements. Also the trust will ensure the assets for the child are maintained along with the eligibility for benefits of mediclaim from the government.However, if parents desire to distribute assets as per their needs, it is necessary that they write down their intention in a will. This can become an important document, should questions being asked about what they really wanted.
- Guardian: For a child with special needs, requirements do not end and it is possible that assistance is required even after they attain adulthood. In that case parents have to make sure that there is someone who is taking care of them. Appoint a guardian, who is willing to take on that extra task, whether personal or legal. In India, for appointing a guardian National Trust is working for intellectually disabled clients at 18 years of age, known as legal guardianship certificate.
Special children have special needs which should be understood and taken care of. If not planned, it can severely impact their lives along with that of other family members. Financial planning helps in identifying those needs and through it parents can make appropriate decisions for achieving their financial goals.