Caring for a child with a blood or bleeding disorder can be challenging in many ways, including financially. From medical bills to special medications and care, the costs can add up quickly. As a parent or caregiver, it's important to understand the basics of managing your family’s finances to ensure that you're providing the best possible care for your child.
This section of Finance Basics covers:
Financing Your Retirement Years
How to Help Children with Financial Literacy
Where Should I Start?
Not everyone owns stocks or bonds. Your family’s biggest asset is usually how much money can be earned by working. This is called earning potential. To ensure your family’s financial health, you’ll want to make sure you budget and save what your family is earning now to build a strong financial future.
Build an Emergency Fund
You should have three to six months of money saved in case of a financial emergency. An emergency fund can help if you must use unpaid medical leave to address a health issue related to your child’s blood or bleeding disorder. Figuring out how to build an emergency fund isn’t always easy. In 2022, the personal savings rate was 3.7%.1 This means people save only 3.7% of overall income. For families of people with bleeding disorders with high medical expenses, savings can be dangerously low.
The best way is to start slowly. Here are a few tips to getting started:
- Start by making a list of all your family’s income sources, including any job compensation or benefits, government benefits, disability payments, or other sources of income your family may have.
- Next list all your family’s expenses. This can include regular family expenses like housing, food, car expenses, clothing, childcare, and entertainment. This can also include medical bills, therapy, medications, and any other medical expenses.
- Subtract your family’s expenses from any income to determine how much money your family has left over each month. Use this amount and start by adding this income to your family’s savings in small, regular amounts.
- You can also automate the process by having part of the income automatically placed into your savings account each month.
Pay Down Your Debt
Debt can be an emotional topic. In 2022, the average American carried $101,915 of debt.3 The debt includes credit cards, mortgages, car payments, medical bills, and student loans. If you cannot repay your family’s debt you may have to turn to bankruptcy. This is a legal process for those that cannot pay their debt to find relief. A study in 2007 found 62% of all bankruptcies were related to medical expenses.2 Avoiding bankruptcy is a good reason to start to pay down your family’s debt.
The first step is to stop getting new debt. If possible, avoid using credit cards. You can pay the total amount your family owes to a credit card company every single month instead of the minimum balance. It is best not to cancel the credit card as this may negatively affect your credit scores. Debt repayment won’t work until your family stops adding new debt.
The second step is to create a plan to reduce your family’s debt. You will need to figure out how to save a little more each month and use this money to pay off debt. You also want to know if your family’s debt is high interest. Interest is the amount you pay for borrowing money. If your family has debts with a high interest rate, paying that debt will be more costly.
Here are some options to think about:
Pay off highest-interest debts first and pay the minimum payment on the rest of your family's debt. Once the higher-interest debt is paid off, you then pay off the lower-interest debts.
Pay off your family's smallest debts first to build momentum toward paying off the higher-interest debt last.
Pay off debts with the highest emotional toll first. Sometimes this means interest-free debts to family or high-interest debts. The point is to focus on the debts that cause you and your family the most stress.
If you want more information about credit, interest rates, and debt, please go to the Consumer Financial Protection Bureau.
Keep the Money You Have
Finally, you’ll want to make sure to carefully check out all offers and appeals so you don’t fall for a scam. The Better Business Bureau, Snopes, your state Attorney General’s office, and other resources can help you check the background and validity of financial institutions and requests. Talking with your community and doing your research can help ensure the companies you hire are trustworthy.
Here are some important tips:
- Don’t give out your Social Security number or contact information when requested from small businesses unless it is absolutely necessary.
- If a creditor calls, question them carefully to ensure that they are who they say they are.
- Don’t be afraid to forcefully say no if someone is pressuring you for a sale.
- If you think you or your family may have been scammed, contact your state Attorney General’s office to report it. You can also report scams online at the Federal Trade Commission.
Financing Your Retirement Years
As a parent or caregiver, you may have to care for your child with a blood or bleeding disorder while in retirement. The earlier you start saving for retirement, the more time your money has to grow. It is important to plan ahead for retirement and be financially ready.
Know Your Retirement Accounts
There are different ways to save for retirement. Below are some types of retirement accounts or benefits:
This is an employer offered plan and these plans provide a specific amount of money every month for the length of the retirement.
Employer offered and funded by contributions from employees. They can be matched by the employer and grow through investment in mutual funds.
These are Individual Retirement Accounts (IRA) and Roth IRAs. They are for individuals and often grow through stock market investments.
This is the government program that most Americans pay into with every paycheck. When you reach the eligibility age, Social Security pays you a monthly benefit based on the number of years you worked and the amount you contributed. Some defined benefits plans may affect social security benefits, as do other factors. For more information about social security benefits, please go to AARP’s Social Security Resource Center.
If you have any questions about supporting your family during retirement, please go to the Financial Planning Association.
How to Help Children with Financial Literacy
Even at a very young age you can help your child develop good financial habits. There are everyday activities that your child and your family can do to teach financial literacy.
Here are some tips to encourage your child:
Not everyone feels comfortable talking about money. But talking about money choices when family members are comfortable doing so can help your child understand and build financial skills.
As your child gets older, you may consider giving them an allowance. Receiving an allowance helps children make decisions about their own money or an opportunity to save their money.
Encourage your child to put some of the money they receive into a special place at home. As your child gets older, you can even open a child specific banking account for them.
If you want more information about how to help your child learn about financial literacy, please go to Money As You Grow.
- BEA. (2023, February 24). National Data: National Income and Product Accounts. Bureau of Economic Analysis Interactive Data Application. https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&1921=survey&1903=76
- Himmelstein, D. U., Thorne, D., Warren, E., & Woolhandler, S. (2009). Medical bankruptcy in the United States, 2007: results of a national study. The American Journal of Medicine, 122(8), 741–746. https://doi.org/10.1016/j.amjmed.2009.04.012
- Horymski, C. (2023, February 24). Average Consumer Debt Levels Increase in 2022. Experian. //www.experian.com/blogs/ask-experian/research/consumer-debt-study/