How My Financial Plan Changed When I Had a Special Needs Child

No matter how thorough your current financial plan, having a special needs child could change everything.

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Updated May 13, 2024
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Long before your child ever arrives in this world, you will inevitably start planning. You will toss around names, interview pediatricians, and test out car seats. You will start considering the cost of things like childcare and diapers, and you might even open a savings account for future educational expenses.

If you’re anything like me, you will also probably daydream about what your child will look like and even the sports they’ll enjoy playing. However, few parents (myself included) will plan for the possibility of their child having special needs.

The financial impact of having a special needs child can vary from family to family, but there's the potential to create a hiccup in any financial plan — no matter how well-designed. Luckily, there are still many ways to adjust, learn how to manage your money and ensure that the future feels secure for your whole family.

It just requires a clever strategy, some goal-adjusting, and perhaps thinking outside the box a bit.

How my financial plan changed when I had a special needs child

I’ll admit: until my oldest child turned two, life was pretty simple. I was a military spouse, a stay-at-home mom with a casual side hustle, and lived only an hour away from my entire family.

As a self-proclaimed “planner,” I had it all figured out: where my kids would go to school, when my husband would retire, when we would pay off our mortgage, and what financial independence would look like for our family in the years to come.

The best-laid plans often go awry, though: at age 2 my son was injured, and the next year he was diagnosed with autism. Four years later, he was also given the (misleadingly-cute-sounding) diagnosis of PANDAS.

While we successfully rolled with the punches that our son’s diagnoses brought, they brought with them new challenges and concerns for the future. And all of this managed to turn our original financial strategy on its head.

What changed

As I have learned, planning for the future is very different when you have a special needs child to consider. Here’s what that looked like for our family:


  • Then: In the past, I had a side gig because I wanted to work and enjoyed the extra spending money each month.
  • Now: After my son’s needs became known, I was forced to develop a steady income. This served to not only handle additional monthly expense, but also aggressively save for everyone’s future.


  • Then: I had always planned to be a stay-at-home (or work-from-home) mom. Babysitters were easy, as I could always hire a local teenager or utilize school-based childcare if and when I needed it.
  • Now: I have since learned that not everyone can adequately care for a special needs child, no matter the level of their needs. School-based childcare is not an adequate option for my son, and in-home care involves hiring experienced (and much more expensive) caregivers. Luckily, though, I am still blessed to be a work-from-home mom.

Retirement planning

  • Then: Years ago, I calculated how much I thought I would need to live on as I got older, especially since I wanted to travel in retirement. Then, I simply invested accordingly.
  • Now: Since then, though, I have needed to revisit the drawing board, factoring in things like long-term health insurance coverage, respite care, and funding a trust for my son’s needs, many decades after I had planned on my children being financially independent.

Life insurance

  • Then: Many parents purchase life insurance coverage to ensure that their minor children are protected if the worst were to happen. Their policy typically includes enough coverage for everyday expenses and childcare until the kids become adults, and even paying for things like college tuition.
  • Now: I revisited my coverage and purchased a new term policy, protecting my children for 30 more years instead of just until they came of age. I also bought significantly more coverage, ensuring that all of my boys’ needs will be met if something happened to me.

Legal planning

  • Then: I drew up a will after my oldest son was born and revised it when my second son came into the picture. It dictated who their guardian should be, how my life insurance payout should be utilized, and my plans for their care.
  • Now: When you have a special needs child, you know that you can’t leave them in just anyone’s care. You know that whoever you choose as their guardian needs to be up to the challenge, and should also be capable of meeting all of their needs. Additionally, many special needs families will require much more than a simple last will and testament, they also need to establish a special needs trust.

Of course, every child is unique, as are their specific concerns. However, these were the biggest things that needed to shift in my own family’s financial plan when I had my son — most of which I had never even thought about previously.

Preparing for the future — 6 recommendations

Let’s be honest: few of us will ever feel fully prepared for what the future may hold. No matter how much planning you put in — from investing for retirement, getting out of debt, buying life insurance, and even saving for college — parents always have that nagging feeling that they could do more.

In my experience, this feeling is exacerbated by having a special needs child. You plan a bit harder. You save even more aggressively. You worry a lot more and think about who will love and care for your child after you’re gone, even far beyond their 18th birthday.

While I don’t think I could ever write an article that would solve those issues, there are a few things that I did to prepare for the future, which helped me feel more secure. Here are a few of my recommendations, if you are also the parent of a special needs child:

An imperfect plan is better than no plan

It took me three years to start putting plans in action after my son’s two diagnoses. I was confused about where to start, felt like I was forgetting things, and didn’t know whether I was making the right decisions.

The great thing about this, though, is that you can always make changes later. If you decide to update your life insurance coverage, you can do so and then revise your will. If you get divorced and/or remarried (check and check), you can adjust your financial plan. And if you begin to think that your child will rely on you more (or longer) than originally thought, you can revisit the numbers.

The most important thing is that you start getting a plan in place as soon as possible. Build on it over time, and make edits as needed — but protect your child(ren) now.

Buy (more) life insurance

Unless your last name is Kennedy or Kardashian, life insurance should be a serious consideration once you become a parent. That’s especially true if you have a child with special needs.

First, consider all of the typical things that you want your life insurance to cover. This includes settling any outstanding debt, paying down the mortgage on the family home, providing for your loved ones’ everyday expenses, covering childcare, and even paying for your kids’ college.

Then, add more.

Be sure to think about whether your child will need extra support for:

  • Childcare, including respite providers or more experienced (read: more expensive) babysitters
  • Healthcare, to include added copays, deductibles, higher-cost premiums, and long-term insurance coverage
  • Living expenses, and how long you expect that your child will need to be supported (Will they need a little extra help after they become an adult, or be fully dependent for life?)
  • Various equipment such as wheelchairs, communication devices, glasses, adapted vehicles, service animals, and more

If you’re the primary caregiver for your child, you may want to spend some time valuing your current role and adjusting your insurance coverage accordingly. For instance, while my husband earns more than me each year, I have significantly more life insurance coverage than he does.

Why? If he were to pass away, I would need to replace his income. If I were to pass away, he would need to replace, well, me.

Since I work from home, I’m able to manage school pick-up/drop-off, take my son to doctor’s/therapy appointments, spend hours on the phone with insurance companies, etc.. My husband would need to pay a full-time caregiver to do these things if I were to pass away, which wouldn’t come cheap.

...But also plan for today

While life insurance is an important purchase, you also need to plan for the here and now. This means building up an adequate emergency fund and ensuring that your retirement savings account for your child’s needs.

If any family’s primary breadwinner were to lose their job, it could be rough. When you have a special needs child, though, a lack of backup savings could mean the inability to buy medication, pay for therapy, or continue insurance coverage. That’s why establishing an emergency fund is so important.

Additionally, be sure that you are accounting for your child and his or her long-term needs in your retirement planning. If your child is likely to be dependent on you in any way once you retire, you’ll need to up your target savings goals today.

Leave guidance

As I mentioned, I am my kids’ primary caregiver. This means that while my husband is up to speed many things, he probably couldn’t tell you when the kids are due for a dental cleaning, or which doctor is my older son’s neurologist and which is his developmental pediatrician.

If I were to pass away tomorrow, so much of my hard work over the years would be lost — without my ICE (In Case of Emergency) binder, that is.

I would recommend that every family create an ICE binder, which should include bank accounts, safety deposit box instructions, life insurance policies, investment information, and more. If you have young children, you can include information on their doctors, medical history, and the like. This information would be invaluable to your loved ones if you were to pass away unexpectedly, but it’s even more important for special needs parents.

An ICE binder could include things like:

  • Your child’s medical history, including doctors, procedures, and test results
  • Past/current medications and supplement schedules
  • Directives for your child(ren)’s care
  • Copies of school IEPs and intended goals
  • Small (but important) facts that seem worth noting, like the only brand of pants that your sensory child can stand and where you buy their special eczema cream

Make your ICE binder as simple or as involved as you like, and feel free to add to it anytime something important changes. No matter how much you include, I promise that it’ll give you an added peace of mind when planning for the what-ifs.

Take advantage of what’s available

Most parents I know are trying to spend less and save more each month. However, those efforts only go so far, especially when you have a child with expenses and needs beyond your control.

Luckily, there are many government programs, tax breaks, and funding sources that you may be able to utilize, which can help you keep more of your family’s money in your pocket. Many of these will depend on factors like household income, your location, and the extent of your child’s needs, but it’s worth exploring the various options available to you.

These include:

  • Finding local, state, or government grants for which you might be eligible (these can be great for funding helpful purchases that aren’t often covered by insurance, like a service animal or communication tablet)
  • Utilizing HSAs (Health Savings Account) and/or FSAs (Flexible Spending Account) to pay for eligible medical expenses with pre-tax dollars
  • Taking advantage of special programs, like ECHO (Extended Care Health Option) and EFMP (Exceptional Family Member Program) (for military families), which can help with less common or high-cost expenses

If you’re looking to build your savings or improve your budgeting skills and don’t know where to start, consider taking advantage of free platforms and services available to you. For example, robo-advisors can help you automatically invest for the future while the best money apps can make reducing monthly expenses a piece of cake.

Don’t forget yourself

One of the best things you can do for your future, and the future of your child(ren), is to take care of yourself. This can be difficult for any parent, but especially those with special needs children.

Your health is your wealth, and is a necessary part of caring for your family. You can’t pour from an empty cup, as they say, so be sure to plan for the future by keeping yourself as healthy as possible. Eat right, exercise, and find time to destress whenever you can.

You should also create and grow a support system. Special needs parenting can sometimes be isolating, so be sure to foster relationships with those around you, especially with parents in a similar situation.

The bottom line

Creating a financial plan that protects your whole family can be tricky. It’s even more so when there is a special needs child to plan for and consider.

I have learned so much about humanity, hope, and the wonders of the world while raising my son. So while life — and my financial plan — look a bit different than I originally expected, I wouldn’t have it any other way.

Author Details

Stephanie Colestock

Stephanie Colestock is a credit card expert, travel rewards aficionado, and writer who enjoys teaching people how to be financially independent and confident about their money choices. If it has to do with credit, credit cards, or traveling the world on points, you'll find Stephanie writing about it. She also enjoys teaching people how to reach financial independence, regardless of obstacles in their path (such as the crippling student loan debt she once held). Stephanie graduated from Baylor University, and is currently working toward her CFP certification. Her work can be seen on sites such as Forbes, Dough Roller, and Johnny Jet, among many others.