Another lost sneaker? How to cover the unexpected costs of raising a kid

Money. Budgeting. Savings. They’re all stressful. And when you factor in the added expenses that can come with raising a child with learning and thinking differences, it can feel like too much.

In this episode of In It, hosts Gretchen Vierstra and Rachel Bozek welcome personal finance expert Kim Palmer. Kim is a mom to three kids and she writes for NerdWallet. She’s also the author of three books about money: Smart Mom, Rich Mom; The Economy of You; and Generation Earn.

Tune in to get Kim’s expert advice about budgeting when you have kids with learning and thinking differences.

We love hearing from our listeners. Email us at init@understood.org.

Related resources

• Long-term financial planning for a child with special needs

• Checklist: Saving for college

• Listen: Impulse buying, negative bank balances, and the ADHD tax

Timestamps 

(1:38) Unanticipated expenses

(5:54) Budgeting tools

(10:53) Emergencies and the struggle to save

(22:23) Letting kids in on the finances

Episode transcript

Gretchen: Hello and welcome to "In It," a podcast for families with kids who learn and think differently.

Rachel: Here you'll find advice, camaraderie, stories of successes and, yes, sometimes failures from experts and from parents and caregivers like you.

Gretchen: I'm Gretchen Vierstra, a former classroom teacher and an editor here at Understood.org.

Rachel: And I'm Rachel Bozek, a writer, editor, and mom who has definitely been in it. Today we're talking about money.

Gretchen: We talk a lot here on "In It" about the challenges of raising kids with learning and thinking differences. Challenges at home, in the classroom, and everything in between. But one thing we've never really gotten into is the financial strain that can come along with all of this.

Rachel: So, we decided to reach out to our various circles with a simple question "What are some of the unanticipated financial costs of raising a child with a learning and thinking difference?" And boy, did people have a lot to say about this.

Gretchen: Yes, they did. Now, I think we all know about some of these costs. All the evaluations, medication, maybe tutoring or various types of occupational or physical therapy. Maybe a psychiatrist. But in some cases, that's really just the tip of the iceberg. So, we want to share some other responses we got.

Rachel: Yes. Some of these I was not surprised by at all. And then some of them were like, "Oh wow, I never really thought about that," or "Yeah, that's totally the case." So, it's kind of a mix, which I think is really nice. So I'm going to start.

(1:38) Unanticipated expenses

Here's a list of unanticipated expenses from a parent whose kid has ADHD: Falling in love with hobbies, buying lots of things for those hobbies, only to abandon those hobbies in a couple of months. They also mentioned that because of the impulsivity and curiosity, they've had a lot of damage to their house and belongings, buying extra glasses, extra sports equipment for baseball practice as an example, because who knows where the batting gloves went.

Gretchen: In a similar vein, this mom wrote, "Honestly, we spend a lot of money fixing and replacing things that get broken or lost. Olive oil dispensers, holes in the wall, keys that have ended up in the trash, remote controls that get flung in fits of frustration, milk that gets left out on the counter overnight," etc.

Rachel: And one more that I heard from more than one person is about dental expenses, specifically for cavities because regular brushing is such a struggle for some kids with learning and thinking differences. It's kind of part of that whole executive function thing.

Gretchen: Families raising kids with sensory challenges introduced a whole host of other costs. One mom wrote clothing and food for the sensory thing. You either have to pay a ton to get just the right ones for your kid, or you end up buying different versions or brands because the things you started with feel weird, taste gross, aren't right, etc., etc.

Rachel: Yes. Another person wrote "Things that get damaged in the pursuit of sensory input, like chewed shirt collars, shoes that are worn without socks or walked in with an atypical gait. Furniture that gets slammed into, pens getting dismantled, and basically the high cost of everyday objects that are used as fidget toys."

Gretchen: And then there's the loss of income that some families face.

Rachel: One mom wrote, "It's really hard to find afterschool programs, and often parents get called out of work to go to many more meetings and appointments with their kids." She says, "I went back to work full time when my son was little and ended up having to leave within a year or so because it just wasn't sustainable. So our family had long-term income reduction."

Gretchen: Similarly, a dad wrote "Hundreds if not thousands of hours on the phone fighting with the insurance company who doesn't want to cover anything. Hundreds, if not thousands of hours testing new prescriptions with your child, fighting with them to do chores, homework, etc."

Rachel: You can totally hear the frustration in that list. And it's a lot. And unfortunately, we don't have any magic tricks up our sleeves to make all those expenses go away.

Gretchen: What we do have, though, is someone with a lot of experience helping families who are having a hard time making ends meet. Kim Palmer writes for NerdWallet and is the author of three books about money "Smart Mom, Rich Mom," "The Economy of You," and "Generation Earn." She's also a mom to three kids, and we're so happy to have her here today. Kim, welcome to "In It."

Kim: Thank you. I'm so happy to be here. Thanks for having me.

Rachel: So, we know that having a child with ADHD or other learning and thinking differences is going to lead to higher ongoing costs of many kinds for families. What are some strategies for managing these higher repeating expenses?

Kim: Well, one of the best things that families can do first before making any decisions about spending or how to make changes is to first look back at your spending over the last month, two months, three months. And you can use your financial institution to help you do this. For example, a lot of credit cards and banks make it very easy to log in and track your spending.

Sometimes they'll even organize it for you into categories and it lets you make informed decisions about where your money is going. Because sometimes we have, as some of your listeners said or shared, you might have signed up for something that you don't need anymore and you can cancel that subscription that your child's no longer interested in.

And so, looking back at the spending is actually such a powerful first step to making choices, because then we can decide "Oh hey, we are ordering takeout way too much or whatever, or we're spending money on this activity we're not really getting joy out of that we thought we would have when we signed up." And so, I would say that is step number one.

(5:54) Budgeting tools

And then step number two is to use a tool like some kind of budgeting tool. I love the 50/30/20 budgeting tool, which basically is a ballpark calculator that says we want 50% of our take-home pay going to needs 30% towards wants, and 20% towards any debt payments we have as well as savings.

And I like the 50/30/20 budgeting tool because it's not overly prescriptive or specific. And, you know, every family is different and it just lets us have like a ballpark goal for how we want to be spending. So, I think once you look back and then overlay this tool, those two things can be a really helpful starting point.

Gretchen: I like that suggestion. How many months did you say you should probably review before you have a kind of good assessment of your budget?

Kim: An epiphany, yes. Well, I like to start with a month and then expand to three months, because the tricky thing about spending is that it's not all neatly fitting into one-month categories. And so, while some of our big expenses, like housing, for example, we're usually paying by month. Some things are pop-up expenses like summer spending, where we are signing up for extra activities or camps for our kids. Sometimes holiday spending, travel at different times of the year.

So, I think it helps to look at a three-month chunk at a time personally because then it captures some of those extra spending that goes outside of that monthly those monthly recurring costs. And sometimes those pop-up expenses are pretty big, especially summer camp and activities like that.

Gretchen: Yeah. I actually used to use this budgeting tool that was free and online and then it went away and I was very sad. And one thing I really liked about it was that you could make up your own categories and then have things auto-feed into it. Because I feel like especially probably for families with kids who want to think differently, there might be categories that your regular old bank is not going to categorize for you correctly.

And you really want to note like, OK, this is for like the sensory stuff or this is for, you know, I don't know, whatever it may be. Are you aware of any, like free or low-cost tools where you really can be creative with categories? Or like for me, I just ended up going to a Google spreadsheet and yes, it's not that great, but that's what I do.

Kim: That, so I love that question because I think that all of us are so individual in how we spend and think about money that we almost need custom solutions that we build ourselves. And so, I actually like your approach too.

And this is what I often do for myself is I use a Google spreadsheet, I share it with my husband, and then he and I can like label things, use color coding. You can just really make it your own. And so, I actually find that tool most useful when you want to be highly customized as so many families want to be.

Gretchen: And you know, again, Kim, I like what you're saying about looking back at the budgets and seeing if there's ways to cut. I know as a family, like when I started doing all this tracking, I was like, "OK, folks, we buy a lot of takeout burritos. Let's learn how to make them ourselves," you know, because I like explained it to the kids, like, "OK, when I when we get four burritos, this is how much percentage of actual weeks of grocery bill like."

And if you look at that like OK so four burritos equaled like, I don't I'm just making up a number, like a fourth of the bill, like what? So, for me and my kids it had, having like a concrete example really explained well to them because otherwise it's like, "Well why can't we? Those are way better than the ones we make."

Kim: Exactly. I mean, we've had a similar conversation and I realized my kids didn't fully understand. When you do order takeout, it's not just the food. You're also paying for the delivery, for the tip. Like they weren't understanding all of those costs that go into it. So, I actually really like pulling out the receipts and showing them exactly, you know, how much it costs to order takeout because it's hard for them to fully grasp that. And of course, you know, they prefer takeout to my cooking most nights, but I have to explain that to them.

Gretchen: Yeah. Yeah.

Rachel: So, you've written about financial resilience. Can you talk about this concept and explain a little bit about how it applies to parents and families?

Kim: Absolutely. Financial resilience is one of my favorite topics in talking about personal finances because I think it speaks to just making sure we're using money to feel as secure, as possible and to know that if something were to go wrong, like an unexpected expense and unexpected job loss, we would have something to fall back on. It really all comes down to having an emergency savings account.

(10:53) Emergencies and the struggle to save

And the term emergency savings is a little bit controversial because for some people it kind of triggers this like fear response. And so, people might prefer to call it something else like a safety net, a dream fund, an opportunity fund. I think it's important to pick the word that resonates most with you and makes you excited to save and put money into it.

And to Gretchen's point before you can label this yourself, you don't have to, you know, use the default emergency savings label. You can actually change the labels on your savings accounts within your bank and call it something that you're excited about. So label it something that feels good and makes you feel good to put money into it.

And then if you are able to if you have the financial flexibility to automatically fund, even if it's just $20 a week, slowly raise that amount, put it into that account and you can grow it over time. I think financial resiliency really depends on having that cushion to fall back on.

And so, just thinking about how you can start small and slowly grow it so you don't feel overwhelmed by the idea that we all need this emergency savings fund. Financial planners often say we need 3 to 6 months worth of expenses, but that is so daunting and overwhelming.

Gretchen: Yeah.

Rachel: That's scary.

Gretchen: Really scary.

Kim: It's really scary. And it almost just makes you want to shut down and not do anything. So, I think the key is really starting small and just putting a little bit away each month if you can, and then growing it over time and then just making sure it is in a high-yield savings account, so the interest rates are working for you and you can have your money growing in a safe way.

Gretchen: OK. So, going back to big expenses. So, like some, for some families, you know, getting an evaluation with for ADHD or whatnot is a significant one-off expense that might require using their savings. So, you know, if there's you're building up the savings, but then you wipe it out, right? With this giant expense, like how do you handle that? What do you do next?

Kim: Well, the first thing is it is ideal that you are building up savings and then using savings to handle a one-off expense like that. And then you slowly do try to build up the savings again. But for a lot of people, they might not have that savings account ready. And so, some people one question we get a lot is when there's a big expense like this in the health care realm, should you turn to other forms of financing like a loan or credit card?

There's all kinds of financial products out there aimed at these kinds of health care expenses. And I think it's really important to think about the overall cost once you add in any fees and interest. So, if you're deciding "OK, should I use my savings to pay for this or should I finance it in some other way that I'm being offered?" You just want to make sure you're calculating how much you're actually paying at the end of the day once you add in all that interest.

So, ideally, if you are using that savings account, I mean, this is what the savings are, therefore it's to help you get through things like this. So, I think, first of all, you don't want to feel badly about using your savings. A lot of people struggle with feeling, you know, shame or regret or feelings like that, which only compounds the stress of the whole situation.

So, you first just want to, you know, give yourself grace and realize, "OK, I built up this savings for a purpose like this, and that's what it's for. And I will build up the savings again." And then you also want to consider if there's any tax advantage accounts through your employer, for example, that you have access to, to help offset the costs of these things. So, just thinking through all of those factors can help you get through it and then just starting to build up those savings again so you're ready for next time.

Rachel: Yeah. And what if you're doing that and you're building up again? But it seems like month after month you have nothing left to put in this little fund.

Kim: It's so hard. I wish I had some easy magic answer, but it's really, it's something that you just have to take a really hard look at the spending and think, "OK, is there any little thing?" So, sometimes for a lot of people that you've already cut out the takeout. So, then it's time to look more closely at the grocery spending, and are there ways you can, you know, reorganize the way that you are shopping each week so you're spending less at the grocery store?

And sometimes that means planning ahead more, reducing food waste whenever you can, thinking about shopping the sales, and picking the recipes that you're making that go along with what's on sale that week. Using an app like Flipp F-L-I-P-P to search out those sales. And so, I often adjust my grocery shopping based on, you know, what I get, what I learn from all the coupons listed on the Flipp app, for example.

So, you just want to think through all of those things. So, I keep bring up food because food is actually one of our most variable expenses and the easiest thing to adjust quickly. If you are in a pinch, it's much harder to adjust housing costs, for example. So, taking a close look at the food budget, I think can be a starting point, if you've already gone through everything else, like the subscriptions, you've already looked at cutting back on entertainment expenses and other things considered wants. So, food is one to zero in on if you're really feeling stuck.

Rachel: What is the app that you suggested for coupons?

Kim: I love this app. It's called a Flipp F-L-I-P-P and it basically means you don't have to sort through Sunday circulars or all that paper. It pulls, you enter your zip code, and then it pulls in the coupons available at local stores. And you could even change like, I'm going to go to a different grocery store this week because that's where this item is on sale. So, I just think it helps you stay organized and always feels good to get a deal and to feel like you're saving money, especially with the prices so high.

Rachel: Yeah. Yeah, that's great. I never heard of that one.

Kim: Yeah.

Gretchen: Food is, yeah, food seems like one you could look at every month. And I know you said subscriptions and entertainment. Is there anything else that comes to mind that might be something you could play with in your budget?

Kim: The other one that comes up a lot is personal care expenses. So, if you might want to start doing, like I personally like giving myself manicures and pedicures. So, you know, little things like that where it can just save you money. Hair, like cutting, some of my kids let me let me cut their hair, but others don't. So, it just kind of depends on the child. But yeah, sometimes you can just do some of that at home because personal care expenses are a lot.

Gretchen: Yeah. I will add a tip that since my kids are teenagers, they want to spend a lot of money on clothing. So, we've often said, "Hey, have you looked at…" and there's sites where they buy secondhand clothes. One they use is like Depop, like literally, you know, "Do you want this shoe? There might be a shoe on there that's your size that nobody wore because they didn't like it anymore." And we found some good deals on that, so.

Kim: I love that. That is a great idea. I also have a teenager, so I'm going to have to incorporate that myself.

Rachel: I've seen like sports equipment swaps.

Gretchen: Oh, that's good too.

Rachel: So, it's like, you know, because sometimes, you know, the cleats are fine or the lacrosse stick is fine. It's just too small.

Gretchen: Yeah.

Kim: I love that.

Rachel: Keeping an eye out for those could make a huge…because that kind of stuff can be like hundreds of dollars like in a couple of months.

Gretchen: Yeah.

Kim: Exactly. Especially when kids, like, change their minds about activities quickly. And then also, my neighborhood also has they have a lot of like, if you need something, you can just email the neighborhood "Hey, does anyone have a used lacrosse stick?" And then you don't have to buy it, especially if your child is just trying something out and you're not sure. There are lifelong lacrosse player, but they just want to give it a try.

So, just asking neighbors I think can help a lot just to really minimize all those one-off purchases.

Rachel: So, taking a step back a little bit broader, any general strategies for saving on the big like what we would consider medical expenses? And in terms of like insurance or tax deductions that people might not know about or anything like that?

Kim: So, I don't have a lot of specific insight into navigating, you know, the insurance process or things like that. But what I will say is that you just want to make sure that you are your best advocate and that you are always fighting for things when things do get denied. Because I have, I've definitely experienced this where, you know, insurance denies a claim and then you file an appeal and they say, "Oh yeah, you're right, we had made an error." So, you just want to make sure you're constantly advocating for yourself to get the money that is due to you.

And then just exploring any tax advantage accounts that you might have access to. So, for example, some people's workplaces offer a health savings account or a flexible spending account. And if you're not sure, you can ask, you know, HR what you might have access to, just to leverage all available tools so you can stretch those budgets as much as possible.

Rachel: That makes a lot of sense. I want to go back to the spreadsheet conversation real quick. Something came to mind because I do hear this from different people in households where there are two caregivers or two parents, how important is it for both of them to know what's going on in the spreadsheet?

Because I feel like there are a lot of families where there's like one person who is responsible for that and the other person is just kind of like living life, living their best life, you know, ignorance is bliss. And like, I have certainly been guilty of this in my own life. But, you know, how important is it for everybody to be aware of what's going on there?

Kim: I think this answer might be a little controversial because I know people have very strong feelings, but I really think that anyone who has spending access or is contributing income, you know, any financial connection, you really need to be plugged in to where the money is going because you're spending it, too, and it's your money, too. And so, both, if it's two people, two partners, they need to both have spreadsheet access, editing, access to this spreadsheet because each person might need to make adjustments to their own spending.

They might not realize how their spending is impacting their partner or the family more broadly. And so, I think actually I'm a huge proponent of having money dates to go over the spreadsheet together. So, once a month you can just open up that spreadsheet, go over it, say, "Oh hey, can we cut back on anything listed here? Was anything a surprise or unexpected?" I think having that review regularly, I mean, it can strengthen your relationship and it can strengthen how you're spending money because you are just aligned.

Gretchen: I find the idea of a money/spreadsheet date lovely because I may be the maker of spreadsheets, but it may be hard to get others on board with it, but I think it is a smart idea.

Rachel: Yeah.

Gretchen: And that reminds me, I mean, this is related to raising kids who learn and differently because eventually those kids will be out in the world, right?

(22:23) Letting kids in on the finances

How important and when do you start actually letting your kids in on some of this like financial literacy?

Kim: I think that you can almost never start too early. As soon as kids start asking for things, which is usually around age two and three, that you can explain, like "We can't have everything we want. There's limited resources." And I think you have to be a little careful not to scare kids because I know they can interpret things very literally.

Gretchen: Yeah.

Kim: And in my own house, I think I made an offhand comment like, "No, we can't get takeout because we want to have money so you can go to college one day." And now every time we get takeout, my son's like, "Oh my gosh, we can't go to college anymore." And so, just like thinking, just thinking, explaining in a way that does make sense to them without scaring them about the idea of limited resources.

And then I think like bringing them into the conversations that you're already, if you're already having them at home with a partner, for example, so they can understand how we're all making tradeoffs and we might be saving for something. So, we're not going to get this today because we want to go on vacation next year or something like that. Letting them overhear those conversations, bringing them into the conversation, I think just plants the seeds for when they're making those decisions themselves.

Gretchen: Yeah.

Rachel: Yeah. I think that's really great. And I think that my only question about that or just kind of like out loud thought, is the line between that, which I totally agree and I think there's so much value in, and being careful of like just for some of the types of expenses that we're talking about today.

I can imagine a kid like feeling bad about that, you know, especially if there are other kids who are not incurring said expenses, you know, like the one kid has like way higher dental, you know, budget or that kind of thing of like maybe that part isn't necessarily part of the conversation, but it's the stuff that applies to everybody.

Kim: Yeah. I'm so glad you brought that up because I think it's definitely worth thinking about that. And I do think that kids, they might even hear things that we're not saying, so.

Rachel: Yeah, they hear everything.

Kim: Yes. So, just being aware of all that and making sure we're talking through all the possible ramifications of how someone's feelings could potentially hurt. I think that's such a good thing to be aware of. I'm really glad you said that.

Gretchen: Kim, thank you so much for being with us today. This has been great.

Rachel: Yes, so helpful.

Kim: Thank you so much for having me. I had such a good time talking with you.

Rachel: Thanks so much for listening today. If you have any thoughts about the episode, we'd love to hear from you. You can email us at init@understood.org.

Gretchen: And check out the show notes for this episode, where we have more resources and links to anything we mentioned.

Rachel: This show is brought to you by Understood.org. Understood is a nonprofit organization dedicated to empowering people with learning and thinking differences like ADHD and dyslexia. Learn more at Understood.org.

Gretchen: "In It" is produced and edited by Julie Subrin, with additional production support from Cody Nelson and Ash Beecher. Justin D. Wright mixes the show and Mike Errico wrote our theme music. Briana Berry is our production director. Neil Drumming is our editorial director.

Rachel: From Understood.org, our executive directors are Laura Key, Scott Cocchiere, and Seth Melnick. Thanks for listening.

Gretchen: And thanks for always being "in it" with us.