As we talked about in our previous article, managing finances in a special needs family requires extra diligence and care.
In that article we showed you how to identify money leaks – those often small, unnoticed expenses that can add up to big money over time and divert funds away from your family’s essential needs and priorities.
In this article, we will talk about how to plug those money leaks, and we’ll provide you with simple, practical strategies to eliminate them.
That way, your money goes towards things YOU deliberately choose that truly matter to your family.
Not sure where to start? Well, get ready ‘cause here we go!
1. Plugging Money Leaks with Simple Adjustments
Once you’ve identified the leaks, taking steps to plug them can make a HUGE difference in your family’s budget.
Adjust Paycheck Withholdings
One simple yet extremely effective way of plugging a money leak is to make sure Uncle Sam gives you back all the money you are entitled to.
A quick and not-so-obvious way of doing this is to properly adjust your paycheck withholdings to minimize your income tax refund.
Minimize my income tax refund? You may be wondering why you would want to do that?
A lot of people think of their income tax refund like receiving an annual bonus check from the government, and they look forward to it every year.
In reality, by withholding too much money out of each paycheck, you essentially give the government an interest-free loan!
Think about it: Does the government pay you any interest for that surplus money they send back to you?
Oh hell no!
In fact, they probably invest that money in government treasury notes that are safe and earn a little interest on YOUR hard-earned money!
Don’t feel bad. We have all been brainwashed by this from the IRS and our fellow co-workers.
Once I completed a new Form W-4 with my employer and adjusted my family’s withholdings I started to receive an extra $400 a month in my paycheck!
Want to know what I can do with an extra $400 a month?
- Payoff credit card debt faster
- Pay down my kid’s medical expenses
- Build an emergency fund
- Invest in a Roth IRA
- Take a nice family vacation
The possibilities are endless!
Cancel or Downgrade Unused Subscriptions
Subscriptions are the Black Hole of Money Leaks!
Subscriptions are literally “death by 1,000 cuts.”
Each $7.99, $9.99, or even $14.99 (thank you Disney+!) subscription doesn’t seem like much at the time, but when you add them all up, it can literally be hundreds of dollars a month wasted on things you hardly ever used or maybe even NEVER used!
Why don’t you notice them?
Because you put the auto-renewed subscription on your credit card or debit card!
You set it & forget it until the bill is due.
Then you pay it off because you have the cash to cover it and “you’ll use it next month anyways.” (If I had a nickel for how many times I told myself that… 😊)
Sometimes you don’t even notice each billing cycle charge because you’re not reviewing your card or bank statements.
Months roll by and you forgot what you even subscribed to in the first place and how much it costs.
THAT is the trap!
The worst part is that companies know this. They sucker you in with a “great deal” hoping you subscribe and then forget about it.
It’s a regularly recurring digital cash register for them that keeps pouring money into their pocket while it siphons it out of your pocket!
Are you ready to end that cycle?
Here is how to combat subscription overload and start putting some stitches on those 1,000 cuts:
1) Review all your subscriptions.
If there are services you rarely use — or have not used over the last 6 months or more — then cancel them.
If you’re wrong? You can always sign up again in the future when they offer another “great deal.”
2) Switch to a lower plan if you find you have not been using all of its benefits for the last 6 months.
3) Call the service providers and see if you can renegotiate a new deal.
For example, cable companies and phone companies are willing to work with you, especially if you request to talk to the manager and properly state your case.
Remember if they don’t want to work with you that’s ok because there are other options out there.
4) Monitor your use of the subscription plan – and the charges — for the next 6 months and repeat steps 1-3.
Saving $10 here or $20 there may not seem like much but it potentially can add up to hundreds of dollars a month and thousands a year!
Negotiate or Consolidate Debt
If you have high-interest debt (i.e. credit card debt, student loans, personal or business loans, etc.), then you may want to look into negotiation or debt consolidation options.
For example, credit card companies are willing to negotiate on interest rates to lower your monthly payments.
You can also look to move your credit card balance to a new credit card with 0% introductory interest rate OR a lower rate altogether.
If you are wanting to try to refinance your house and/or open a HELOC, you can use that equity to consolidate all of this debt at a much lower rate and lower you overall monthly payment. (I LOVE cashflow! 😊)
Lastly, debt reduction services may be able to help reduce interest payments, giving you more breathing room in your budget.
Personally, I am NOT a fan of this because IMO these debt service management companies charge you high fees for work that you can do yourself.
However, if you already feel overloaded with the daily grind of life, it is a useful option.
2. Optimize Special Needs-Related Expenses
For special needs families, one area that is a BIG problem area for us is medical expenses.
From paying for the good therapists and psychiatrists who don’t take insurance, medications our kids need, and medical equipment they can’t live without, our out-of-pocket (OOP) medical expenses can easily cost us $10,000+ a year! (I know from experience……. 😊)
THIS is a HUGE expense for us that parents with neurotypical kids don’t have.
Here is how to minimize your OOP costs and still get your kids’ needs met:
Identify Essential vs. Optional Expenses
For special needs families, certain services and therapies are essential while others may be optional or at least less critical.
Start by sitting down and making a list of all the services, specialists, medications, supplies, and everything else that your loved one uses every month.
Once you have your list, you can try to figure out which services are essential and top priority. You can label those with a “1.”
Next look for those services that are beneficial, but less critical. You can label those with a “2.”
Any remaining services on your list should be things that, while nice to have, are more optional than anything else. You can label those with a “3.”
Now you should be better able to prioritize essential services to ensure your family’s immediate needs are met. Keep all the 1’s. Drop all of the 3’s. And try to keep as many of the 2’s as you can, and as your budget allows.
Leverage Insurance Coverage
Review your health insurance policies to ensure they cover the essential services that you and your family need.
If they do not, then you should consider adjusting your coverage to another plan that is better able to meet your child’s specific needs. Doing this can potentially reduce your out-of-pocket costs.
If you cannot adjust your coverage then you should look to see if you can switch to another insurance company that would be able cover those essential services but for less money.
But what if you are stuck with your current coverage because it is the only company and the only plan that your job provides?
In that case you should:
- Research Generic Alternatives: If possible, use less expensive generic versions of medications instead of more costly name-brand ones.
- Use In-Network Providers: Staying within your insurance company’s network can help reduce your out-of-pocket costs.
Take Advantage of Tax Credits and Deductions
There are tax credits and deductions available for families with special needs.
For example, you can deduct any unreimbursed medical or therapeutic expenses from your taxes that are in excess of 7.5% of your Adjusted Gross Income (AGI) every year.
This can include money spent on educational and rehabilitative services (including “special schools”!), some recreational services, transportation, medical treatments, capital expenditures, conferences, and more.
Another option is to save into a Healthcare Savings Account (HSA).
HSAs are the only triple tax-advantaged account available, where money can be saved pre-tax, invested to grow tax-free, and then withdrawals are also tax-free as long as they are used for qualifying healthcare expenses. This can help reduce the financial burden of those expenses.
Flexible Spending Accounts (FSAs) also allow you to save money pre-tax to be used to be used for medical expenses and dependent care.
But be careful!
Unlike an HSA the money in your FSA does NOT roll over from year to year, so if you don’t spend all of it you lose it, and it is always your responsibility to keep track of your spending and submit receipts.
ABLE Accounts (Achieving a Better Life Experience) do not provide any pre-tax savings or tax deductions, but the money that is saved into an ABLE Account is able to grow tax free and withdrawals are tax free for Qualified Disability Expenses.
Seek Assistance Programs
Look for assistance programs that provide financial aid for therapies, equipment, and medical care,
Seek out nonprofit agencies and other organizations that may provide some services and other important benefits for free or for a very low cost.
In addition, many state, federal, and nonprofit organizations offer grants or support programs to help cover special needs-related expenses.
Any and all of this assistance adds up, and every dollar of care or service that is paid for by one of these programs is one less dollar coming out of your pocket – and that lets you save more of your money for all the other essential costs you’re trying to grapple with.
Even so, if after doing all this, you find that you are still paying more than you can bear for your loved one’s special needs care and expenses, there is one more money leak plug to try.
3. Reduce Discretionary / Unplanned Spending
A great way to get started in eliminating unnecessary spending is to look at how many unplanned purchases you are making every month.
It could be something simple, like an impulse buy from a store on your way home.
Maybe something you saw online that caught your eye and you clicked “Buy” without giving it a second thought.
Instead of making those kinds of unplanned purchases, a better strategy is to list out what you need and set a budget for those items.
Sticking to your weekly or monthly budget is a great way to curb the “daily buying decisions” money leak!
That way if you see something you want but you are already at or close to your budget, you’re just going to have to wait until the next cycle to get it.
Not only that but waiting a day or two before buying something can help curb impulse spending altogether.
Maybe by the time the next cycle rolls around, you have already moved on and you don’t feel that you want that same thing anymore.
You’ll be surprised how much money can be saved by a little upfront planning to plug those money leaks! 😊
Next, consider making some changes to your lifestyle expenses in order to reduce your spending.
This area can be a little tricky since one person’s “lifestyle” is another person’s “necessity.”
For example, dining out and entertainment are two common lifestyle expenses many people look to attack in an attempt to plug money leaks.
But what if being a special needs parent is taking a toll on your marriage?
What if periodically going out on the town is what is helping to repair your marriage and enables you some much-needed respite time away from the demands of caring for your special needs child?
Is this considered lifestyle or necessity? Personally, I can see an argument for both.
The point here is YOU get to decide what is necessary and what is discretionary.
But you do need to make some decisions, and once you do then you can attack those discretionary expenses and find creative ways to reduce or eliminate them.
Resourcefulness matters here, too.
I’m sure if you and your partner put your minds to it, you’ll uncover low-cost or even FREE alternatives to spend quality time together without straining your budget.
4. Review and Adjust Regularly
Now the last step is simply this: you need to periodically rinse and repeat steps 1 through 3.
Your expenses will vary over time and you’ll need to do regular check-ins to ensure you promptly plug the leaks as you uncover them.
What would also help you with these check-ins is to establish a budget and review regularly.
There are a lot of budgeting apps like Empower or an AI financial assistant like Cleo that you can use.
If you prefer to make a custom budget, I have created a couple of FREE budget templates you can use to get started.
If you prefer more one on one help, schedule a call with Zeke Zimmerman. Not only is he a financial planner who looks at the holistic picture but he is also a special needs parent as well… he gets what you are going through!
Another way great way to create a solid budget and keep an eye out for things to reduce or eliminate is to involve the whole family!
Now you don’t need to tell your kids that money is tight (they don’t need to worry about adult stuff like this), but you can tell them that you want to teach them about being responsible with money.
A good way to get started could be to enlist their help in thinking about where the family can cut back or save. (It’s all in how you view the problem! 😊)
Finally, remember this…
Stay Flexible and Adapt
Special needs families often face changing circumstances.
Be prepared to adjust your budget and your priorities as your family’s needs evolve, and don’t be afraid to reallocate resources as necessary.
Think of it like a sailboat on the ocean. As the winds change, the sails need to change as well to keep you on course.
Budgeting is the same way! 😊
Celebrate Small Wins
Every reduction in unnecessary spending counts. Recognizing and celebrating progress can reinforce positive financial habits and boost morale.
One way is to have a goal “party” for hitting a milestone. It can be as simple as buying a $5 Hot ‘N’ Ready pizza at Little Caesars for a night off from cooking or splurging on the “fancy” ice cream at the store as a special dessert.
Whatever you choose, be sure to celebrate the small wins since this builds momentum on your financial journey.
Conclusion
Identifying and plugging money leaks is essential for any family, but it’s especially critical for families managing special needs.
By tracking spending, making necessary adjustments, and regularly reviewing your budget, you can free up valuable resources to support both immediate and future needs.
Careful planning and discipline will help create a financial structure that empowers your family, ensuring you can meet your unique circumstances and continue to thrive.
Be sure to give yourself patience and grace on your financial journey because you are developing new financial “muscles” and this can take time.
Finally, be sure to celebrate the small wins as they come to build both momentum and self-confidence.
Until next time…
Live The Life You Love, Want, And Deserve! 😊
Do you need 1 on 1 coaching and guidance?
Schedule a call with my friend Zeke Zimmerman here!
