Adoption Financing 101: How to Adopt a Child Without Going Broke

Adoption Financing 101: How to adopt a child without going brokeOne of the biggest hurdles that people face when adopting a child is the cost. Let’s face it: adoption isn’t cheap. In most cases, a domestic adoption in the United States could cost around $25,000 to $35,000 depending on different variables. Adopting internationally can be even more expensive, with total costs reaching as high as $50,000 or more.

Those figures may seem extremely daunting at first. And sadly, many people who want to adopt are scared away by those figures and give up on their dreams entirely, thinking there is no way they can afford it. That’s really a shame.

It doesn’t seem right that adoption should cost so much, but it is what it is. The good news is that there are many ways to make adoption more affordable.

For one thing, the figures you see above are total costs, and you most likely won’t have to shell out that amount of money in one lump sum, meaning you get to pay over time. (You should never work with an agency that asks you for all the money up front anyway!) There are also many ways to reduce the cost of your adoption, and to find or raise money to help defray the costs. You don’t have to go broke, take out a second mortgage, or sell one of your kidneys on eBay to afford an adoption. With a little discipline, determination, and creativity, you can come up with the funds you need.

One of my main goals here is to help you find ways to make adoption more affordable, so I want to share with you a basic guide to give you a few ideas. We’ll explore these in greater detail in future blog posts, but for now, here are the basics.

Step 1: Start saving

The first step to affording your adoption is to take a look at your budget and see where all your money is going, then start looking at areas where you can cut back.

Take a few moments to write down all of your expenses for the month, starting with your set expenses like mortgage/rent, utilities, insurance, car payments, etc. Then write down how much you spend on more variable but necessary spending, like groceries, medical bills, gasoline, etc. Since these costs can vary from month to month, just give them your best estimate. Finally, write down all your discretionary spending — that’s things like restaurants, movie tickets, shopping, hobbies, recreational activities, and so on. If you don’t know how much you spend, then take a couple of months to track all your spending. You can use a tool like Mint to make this easier.

Now evaluate where all your money is going. Are you surprised by what you see? Chances are, if you haven’t been sticking to a budget or paying attention to where you’re spending your money, you will be. Don’t fret about it too much; just use this as an opportunity to cut back in areas where you may be overspending.

Now I’m not a personal finance expert, but I know a thing or two about being frugal. Here are a few ideas of ways to cut back on spending. They may not all apply to you and your situation, but I’m sure there are a few ideas here that you can use:

  • Eat out less and cook at home more: My wife and I love to eat out at restaurants, but a dinner for two always ends up costing us around $40 or more when you include the tip. Even the cost of fast food can add up if you eat it every day (not to mention it’s unhealthy). My advice is to save the restaurants for special occasions and find some quick and simple dinners that you can fix at home. It will save you a lot of money for your adoption and can be much healthier as well.
  • Skip the Starbucks: Yes, I know it sounds cliche to suggest cutting back on the lattes, but if you spend $5 on some fancy-schmancy coffee drink every day, that can add up as well. I love coffee and I love Starbucks, but I’d much rather brew my own coffee at home and keep my money in my wallet.
  • Cut the cable: With low-cost online streaming services like Netflix and Hulu available, why spend hundreds of dollars a year on expensive cable or satellite TV packages only to get a whole bunch of channels you won’t even watch? See if you can do without for a few months, or at least stick to the basic plans. I know it’s hard to give up Game of Thrones, but isn’t it worth it to be able to have the money to bring a child home?
  • Stop wasting electricity: Leaving the lights and the TV on when you’re not using them, or keeping the air conditioner cranked up to “meat locker” temperatures, can really drive up your electric bill. Get into the habit of turning things off (or down, for the AC) when you are not using them. If you can, switch to more energy-efficient appliances and light bulbs, or install a programmable thermostat to turn your AC down automatically when you are at work. It may not seem like much, but little things can add up to significant savings over time.
  • Become a bargain hunter: Some things like clothes, groceries, and appliances may be necessary, but that doesn’t mean you have to pay top dollar for them. Wait for things to go on sale or clearance. Check online for cheaper deals. Buy things used instead of new. Buy in bulk. Clip coupons. Do whatever you can to save money on the items you need so you can keep more of that money for your adoption.
  • Quit the gym: Staying fit is always a great idea, but those monthly gym membership fees can add up over time. You can get just as good a workout at home. Consider jogging around your neighborhood, or buy some inexpensive free weights and fitness DVD’s.
  • Quit smoking: If you smoke, not only is your habit killing you, but it’s costing you a lot of money. The price of cigarettes can add up to hundreds, even thousands of dollars per year, depending on how much you smoke. Why not use that money to bring a child home instead of using it to destroy your health?
  • Ditch the car: I know this suggestion seems a bit extreme, but if you can get by with only one car or even no cars, you can save big money. Even if your vehicle is paid off, it can still be a money pit. You have to pay for insurance, gas, maintenance, repairs, and so on. Not only will selling your car bring in a few thousand dollars for your adoption, but you will no longer have to pay for these expenses. Obviously this option is not for everyone, but if you live in a large city with good public transportation, you may want to consider it.
  • Avoid impulse purchases: Before you make any kind of impulse purchase, no matter how big or small, ask yourself: “Do I really need this?” or “Is this object really worth putting off my adoption?” Follow the 24-hour rule: give yourself at least one full day to think it over before buying it. Sleeping on it will help you decide whether that purchase is really necessary or just another luxury you can do without.

These are just a few ideas of ways you can cut back on expenses. Can you think of any others? Feel free to share them in the comments section below.

Where to save the money

Now that you’ve found ways to free up a little extra cash, you need a safe place to keep the money. My suggestion would be to open up a special savings account for your adoption. A good high-yeild money market account is ideal for this. You can open one up at your bank or credit union, or you can research to see which banks offer the best rates and lowest fees.

One online service that I have used in the past and found useful is SmartyPig. SmartyPig is a special kind of online bank that lets you set saving goals for different things. You tell them how much money you want to save up and how quickly you want to reach that goal, and they automatically deduct the amount of funds you need from your bank account of choice at the time interval you specify. Of course you don’t need SmartyPig to do this, as most banks offer automatic deductions or transfers, but I’ve found their service very helpful as it makes it easy to see the progress on your goals. You can even share your goals on social media and let your friends and family members contribute. Very useful for couples saving up for an adoption or any other expense.

Whatever method you use, having a goal and saving up money at regular intervals is a great way to save up the funds you need.

Step 2: Get assistance

So we’ve addressed ways for you to save up your own money to help cover the expenses of adoption. Now let’s look at some ways to lower the costs or get money from other sources.

The Adoption Tax Credit

For people adopting in the USA, the federal government offers assistance in the form of a federal tax credit. This credit can put a significant amount of money back into your pocket.

The tax credit can be a bit complex and confusing, but here are some of the basic things you should know about the Adoption Tax Credit:

  • The maximum amount of the credit for 2013 was $12,970 per adopted child. This amount increases to $13,190 for 2014.
  • The amount you qualify for may depend on your income. If your modified adjusted gross income (MAGI) is greater than $197,880, you will only be eligible to receive part of the credit. If your MAGI exceeds $237,880 you are not eligible to receive the credit.
  • The credit applies to any out-of-pocket expenses deemed “reasonable and necessary” for your adoption up to the maximum limits mentioned above. These can include agency and attorney fees, court costs, home study fees, travel expenses (airfare, hotels, meals, etc.), adoption profile and advertising expenses, and so on. Be sure to keep track of all of your adoption-related expenses and save all receipts so you can have them ready when it is time to file your taxes. If you aren’t sure if a particular expense qualifies, I would recommend saving it anyway; your accountant can help you figure out what applies and what doesn’t.
  • The credit applies to domestic, international, and foster care adoptions; however, it does not apply to adoption of stepchildren.
  • The credit is non-refundable. This means that you only get back what you have in federal income tax liability. In other words, if your total tax liability is less than the amount of the credit, you only get that amount. However, the remainder can be carried over for an additional five years until you get the full amount of the credit.
  • There are some exceptions for the adoption of children with special needs. For special needs adoptions, not only is the credit refundable, but you are entitled to claim the full amount of the credit even if your expenses are less than the full amount. Even if you have zero expenses, you can claim the full amount of the credit.

I won’t go into much more detail here, but this should give you a general idea. IMPORTANT: Please keep in mind that I am NOT a tax expert. The above information is simply based on my own research and should be taken with a grain of salt. Tax laws can be very complicated and are changing all the time, so I strongly encourage you to talk with your accountant or visit the official IRS website for the most accurate, up-to-date information. Another great resource is the Save the Adoption Tax Credit website. It includes more information on the tax credit itself as well as ways you can contact your lawmakers about making the credit refundable.

Adoption Grants

Another way to get financial help for your adoption is to apply for adoption grants. There are many non-profit organizations out there that offer grants ranging from a few hundred to a few thousand dollars to qualifying families. That’s a significant chunk of change.

Most grants have certain requirements that must be met for you to qualify. For example, some grants may require you to meet certain income criteria. Others may only be available for families of a certain faith or religion, while others may be specifically for international adoption, foster adoption, or adoption of children with special needs.

Doing a Google search for “adoption grants” can help you find many of the grants available. I would also recommend visiting the Resources4Adoption website, which offers a searchable database of adoption grants. Other organizations that offer grants that you may want to check out include:

I recommend spending a few hours researching different grants, and finding as many as you can that you may qualify for. Then spend an afternoon or two filling out applications for all of them. It may be time consuming and tedious, but please don’t ignore this option! Even if you end up only getting one grant, it will be worth the effort.

Employer assistance

Another good place to turn to for help with adoption funding is the human resources department at your employer. Many companies offer assistance to employees to help defray the costs of adoption, so be sure to ask.

If your employer doesn’t offer adoption assistance, you might want to check out the Dave Thomas Foundation for Adoption. It includes a lot of information on adoption-friendly workplaces as well as resources to help you convince your employer to offer adoption benefits.

Step 3: Raise money

So you’ve looked at ways to cut back on expenses and get financial assistance. But what if that’s not enough? Then you need to start fundraising.

Fundraising may sound like a hassle and a chore to some, as not everyone enjoys the idea of asking other people for money. But don’t dismiss this option. People love to support a good cause, and what better cause is there than helping you bring home a child who needs a loving home? Besides, there are many fun and creative ways to raise the funds that don’t feel like panhandling.

There are far too many fundraising ideas to list here, but here are a few basic ones to get you started.

  • Sell your stuff: Chances are you have a lot of “crap” in your house that is just taking up space. Why not sell all that stuff and use the money for your adoption? Go through your closets, attic, garage, basement, etc. and collect as much of the old stuff you never use that you can find, then list them on eBay or Craigslist. Sell your old clothes to a consignment shop or your old books and CD’s to a used bookstore. Or better yet, have a garage sale. This is a great way to spread the word about your adoption and get your community involved.
  • Hold a fundraising event: Holding an event is a great way to get people together and have a good time while raising money. I mentioned one idea above (garage sales), but there are many other possibilities: silent auctions, ice cream socials, movie nights, raffles, and so much more. Try talking to your friends, neighbors, co-workers, and people at your church to see what ideas you can come up with. You may even want to talk to local businesses (especially restaurants) to see if they would be able to help.
  • Sell arts and crafts: If you have a talent for painting, sewing, sculpting, woodworking, or some other artsy hobby, consider selling your artwork. You could list them on Etsy, sell T-shirts with your designs, and more.
  • Second job or business: If you have the time, you may want to consider picking up a part-time job on the side of your regular job. This doesn’t necessarily mean flipping burgers or delivering newspapers (although you can definitely do that if you want). I’m thinking more along the lines of freelancing or offering other skills or services. Think about some of the skills you have; maybe you enjoy writing, or are skilled at photography or graphic design. If so, there are many freelancing opportunites on the web. Check out a site like ODesk or Elance to see what kinds of services are in demand. Or maybe you could offer your skills as a wedding photographer, tutor, babysitter, personal trainer, or virtual assistant.

Heck, I’ve just scratched the surface here. There are tons of ideas for fundraising, and I can spend many a blog post talking about them (and probably will in the future)! You are limited only by your creativity and your determination.

Do you have any other ideas? If so, be sure to sound off in the comments below.

Step 4: Borrow money (last resort)

I mention this suggestion last because I’m really not a fan of going into debt. I think you should avoid it if at all possible, and if you are diligent enough and put as many of the above suggestions into practice, you should be more than capable of coming up with the money you need without having to go into debt.

Nonetheless, if you’ve tried all the above suggestions and been unsuccessful, or you just need to come up with a large amount of the money quickly, taking out a loan is an option. There are several banks and credit unions that offer loans with low interest rates specifically for adoption expenses. A Google search for “adoption loans” can help you find some of these loans.

If you do end up taking out a loan, make sure you research your options and borrow from a reputable institution. Also, be sure to have a plan for paying off the loan and don’t borrow more than you can afford to pay back. Be clear about the terms of the loan, how long it will take to pay off, how much your monthly payments will be, and how much you will be paying in interest.

Conclusion (And One Highly Recommended Read)

As you can see, there are tons of ways you can come up with the money for your adoption, so you can no longer use money as an excuse!

By the way, if you want to read more about adoption fundraising, I highly recommend Julie Gumm’s book Adopt Without Debt. It is jam-packed with resources, ideas, and other information, as well as stories about actual families who have found creative ways to fund their adoptions. As far as I know it is the best book on adoption fundraising there is! (NOTE: Unfortunately, at this time the book appears to be out of print, so finding a copy may be difficult. Amazon has copies for sale but at ridiculously high prices, and it’s no longer available for Kindle or iBooks. I did find it available for Nook, but I don’t know how much longer it will be there. You may want to check your local library to see if they have a copy or can get a copy for you to borrow. According to Julie’s website, a new book is coming out in January 2015 which she says is “almost 3 times as long as the original and includes a broad overview on adoption.” If the last book is any indication, I’m sure this new book will be amazing. In the meantime, check out Julie’s official blog at for more information and fundraising tips from Julie.)

I thank you for reading this far, and I hope this article has inspired you to start taking action to save up the money you need to make your dreams of becoming a parent come true. If you have any other money saving or fundraising ideas, feel free to share them in the comments below.

Cheers, and as always, I wish you all the best!

Like this article? Share it!
Get Free Updates

, , , ,

3 Responses to Adoption Financing 101: How to Adopt a Child Without Going Broke

  1. Debbie August 8, 2016 at 1:41 pm #

    Me & my husband want to adopt a baby cause I had messed up & got myself fixed with my ex, something I shouldn’t of happen, & now I regret it, & I do sit around sometimes & cry about it please help me make my dreams come true by letting us adopt please, I would love to have a baby boy a healthy normal baby boy that would look as close to us as u can get we r a loving caring Christian family, & that baby will have a very good loving Christian home. Please email me back at Debbie. Tests77@yahoo. Com, oh & we don’t have a lot of money we always said it is wrong in ours & his eyes to buy a child u shouldn’t give money for a human being they just need a very good loving home like ours.

  2. Debbie August 8, 2016 at 1:45 pm #

    It was sapose to be Debbie. Festa77@yaoo. Com

  3. Debbie August 8, 2016 at 1:46 pm #

    At yahoo. Com

Leave a Reply