$20K or more to expand your family? How to pay for adoption

K or more to expand your family?  How to pay for adoption

August 16, 2021

5 minutes reading

This story originally appeared on NerdWallet

Sarah Bailey’s adoption experience began in 2013 when she hooked up with an adoption agency and paid fees for a parenting course and advertised birth mothers for a year.

In 2014, and still without a successful adoption, Bailey began paying a $340 monthly advertising fee every time an adoption fell through.

“I wasn’t expecting the monthly fee,” said Bailey, director of a mental health program in Indianapolis. As the spending continued into the second year of an expected year-long trial, Bailey became disheartened.

“For me, there was a point where I almost gave up,” she says.

She persevered, and by 2015, Bailey had paid over $22,000 to adopt her son.

The cost of a private adoption can range from $20,000 to $45,000, according to the Child Welfare Information Gateway, a Children’s Bureau service under the federal office of the Administration for Children and Families.

The price may include legal fees, a home study to check the security of your living space, and counseling.

But adoption can include unplanned costs — such as living expenses and hospital costs for the birth mother during the pregnancy — that vary by agency and state, as well as the adoption timeline.

To control costs, experts recommend that families plan ahead and use multiple types of financing, from fundraising to borrowing. Here are strategies to consider.

Start with a plan

If you work with an adoption agency, you’ll usually receive a list of fees before you sign up, says Blake Jones, an adoptive parent, certified financial planner, and founder of Pomegranate Financial, a Utah-based financial planning firm.

Use that information to create a timeline of the expenses you’ll have over the next six to 18 months before signing the adoption application, he says.

Then look at the financial resources you have access to — savings, equity, grants — and tailor what you have to when you need it, Jones advises.

Build your savings is the best option, says Marta Shen, a certified financial planner at Raymond James’ Spring Street Financial in Atlanta and an adoptive parent who advises clients on managing adoption costs. Paying back a loan on top of new parent expenses, such as childcare, can be financially stressful, she says.

Ask others for help

During her adoption process, Bailey turned to her community to raise money.

Photo courtesy of Sarah Bailey

“I bought a puzzle and sold pieces so people could be a part of my child’s life,” she says. For “everyone who has bought one, I put their name on the back.”

The completed puzzle is in her now 6-year-old son’s room – a reminder of all those who helped them connect in 2015.

Aaron Johnson, a father of two adopted children from Orlando, Florida, also raised money for his first adoption in 2017. Johnson raised more than $10,000.

“We’ve been doing GoFundMe on social media, so a lot of our friends, church members, and other family members have donated to that,” said Johnson, who has started a nonprofit since adoption that provides grants to help other black families adopt children.

Apply for an adoption grant

An adoption grant — funds that don’t have to be repaid — is another way to fund adoption. Helpusadopt.org and the Gift of Adoption Fund offer grants to help cover adoption costs.

At organizations like these, you should check deadlines and entry requirements, such as parental status and financial needs. When submitting the application, you may be required to pay a fee, provide references, and show evidence of an approved home study.

Consider a HELOC

A home equity line of credit provides access to cash based on the value of your home. It allows you to withdraw money and make monthly repayments. It’s more flexible than a loan, Shen says.

Some people prefer a fixed amount they know they’ll have to pay back, such as a one-time personal loan, Shen says, while others are fine with a HELOC’s revolving line of credit. If parents are not sure beforehand how much they need, HELOC maybe a better option.

Personal loans can be a last resort

If fundraising falls short, you won’t be eligible for a grant or won’t have a home, a personal loan maybe worth considering. Borrowers with strong credit can qualify for rates between 12% and 17%.

Before taking out a loan, make sure that the monthly payments fit comfortably into your budget.
Shen advises clients to avoid too many financial obligations, which can put a strain on a new family.

This article was written by NerdWallet and originally published by The Associated Press.

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