I have been looking into adoption recently, and was discouraged about the costs. I would love any kind of advice, or information about making it more affordable. How can a lower income family afford it?

I took the question to our adoption forum members and this is what they suggested:

>>>>>>> This is tough. I have to say it seems to be getting harder to do each time we pursue it. Further, adoption costs have gone up incredibly over the last six years and I feel they’ll continue to raise at a phenomenal rate. Here’s what we’ve done: re-financed our home at a much lower rate, and borrowing more to cover the cost of the adoption. In the end, we borrowed more $$ and brought our house payment down incredibly as well (lower interest rate). We’ve also borrowed from family; as well as used almost all of our savings. This is because we’ve chosen to adopt more than a couple of times……several times as a matter of fact.

I know some would encourage you to adopt through the foster to adopt state systems. While this means essentially no financial cost to the adoptive parents…….one must be careful to weigh the financial with the emotional costs to adopt in this manner. More often than not, adopting through the system will take (at least ) a moderate toll on the emotional well-being of family members. Be very prepared for this. This isn’t to imply foster/adopt situations can’t succeed; but they certainly aren’t like adopting babies and there is often a different way of raising these children—because of their past issues.

I’ve heard of people having yard sales, applying for grants, taking out adoption loans, etc. All of these are good. But, regardless of which direction you go, I’d say that paying for adoption means the couple will have to sacrifice in order to do so. There is a small percentage of people who are quite wealthy and have money sitting around for adoptions; but they’re not the majority. Most of us have to decide if the wants and desires of our hearts lie with having new homes, new cars every couple of years (or longer LOL), having a lot of material luxuries or paying fees in order to have children. IMO, that’s really the bottom line. Adoption isn’t for everyone; and for a lot of us, adopting children ranks higher than retirement, material comfort, and having that guaranteed nest egg for old age. Again, it’s a monetary sacrifice, and one that should be well considered before going into it.

>>>>>>> Apply for grants, request information on need-based fee reductions, see if your state offers an adoption benefit amount to offset your costs. Many do. See if your employer offers an adoption benefit. Many people do private fundraisers, yard sales, etc. to help pay adoption expenses.

Really do your homework when choosing an agency or adoption professional. There can be drastic differences in fees, hidden costs, and the expectation that you pay some birthparent expenses. Many places don’t require you to pay any birthparent expenses.

>>>>>>> We used savings, and temporarily home equity, and with both of our adoption I had a “timely” deal come through – just through SHEER LUCK. We didn’t borrow more than we knew we could recoup with the tax credit. Both time we adopted money was very tight from adoption date to tax time. – so nearly a year of monetary stress.

We were lucky in ways, my income had always been our “fun” money. Sure, we used some of it for living expenses, but because of Matt’s career, and mine, we couldn’t count on mine (he’s military, I’ve been strictly comission since I was 25), so our primary existing never touched my income.

My advice – save some money, however you can. Ebay stuff, garage sale stuff, put off buying a new car, furniture whatever. Have romantic dinners at home instead of restaurants- you can’t do that once you have kids (we had one of our anniversary dinners – complete with china and crystal in our formal dining room au natural), limit your gift giving – cards work for most people just fine, no one needs more junk. When it comes to work clothes buy 1 new suit per season per year. That way you have something up to date to wear when necessary, and perfectly acceptable stanbys the rest of the time – by 5 years old my suits were for office days only, not meeting days. But 4 years and younger – not enough difference to be out of style. Buy target instead of Victoria’s secret – yeah, I hate it too, but it does make a difference.

I do hate that when money comes up every one says consider state children, or special needs. I don’t think that it is fair to the kids to be only considered because of money issues. I think people need to look at the type of adoption that is right for their family….how they can best parent the kids they adopt first. Then look at the money. Certainly if special needs and older children are in their “range” then it is a great place to start, but money shouldn’t dictate the type of adoption.

>>>>>> Various foundations and donors enable special needs adoptions to happen with a greater frequency by advertising and offering grants. With greater visibility, these children are seen by prospective adoptive parents. Often, people are moved to inquiry by familiarity: perhaps a friend or relative has a similar condition, or there is another child in the home with the same handicap. After much discussion, personal research, and the home study, prospective adoptive parents interested in adopting special needs have a single child in mind. They are not waiting for a referral. They know what will be involved and how much they can handle. They have looked for networks in the community for support and education. They have sought medical guidance. Their homestudies are specifically approved for the adoption of a special needs child.

>>>>>>> Family and church gave us a little money, but the bulk of our adoption costs came from a personal line of credit. I have found that since we adopted, our credit union offers a loan program specifically for adoption.

>>>>>>> We are not adopting until we have the total costs of the money saved. It sucks, and I fight with dh about it all the time, but in the end I know it will be best. The monthly amount of money we’re saving each month for adoption will then be used to save for our kid’s college once we do have a baby. I want a baby more than I want air somedays, but I need dh’s support and he refused to be in debt when we can make sacrifices now, wait a while, and save. I’ve wanted to adopt for almost 2 years now, and we’re not planning to start until 1-1-11 (or 1-2-11 since I doubt the social worker will do our homestudy on New Year’s Day). Almost 4 years is a long time to wait when we’ve already waited long enough, but we’ll have it paid in full including all anticipated travel costs (dh is a financial planner so he has included the costs for EVERYTHING).

>>>>>>> Dealing the fees was difficult for us to. It helped us to finalize our decision on what country to go to. We were always heading towards China and the fact that it is one of the cheapest countries didn’t hurt. It sucks that we have to think about it that way but we have to be able to afford to raise the baby once they come home and we couldn’t spend all our money on the adoption. We’ve been saving up and with the international adoption we get to pay a little here and a little there, which helps. I found an organization that gives interest free loans to Jewish families, so we’ve looked into that. And my parents have offered to help, which I hate to do, being that I’m 39 and should I really still be getting help from my parents, but the hell with it… they have it and they are happy to share! We had spent so much money on fertility and it just never seems to end. I’m just amazed at it all… there are so many kids out there that need a good home and we all have good homes and want kids, why does it have to be so damn difficult?

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For both the credit or the exclusion, qualifying expenses include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child. An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself. The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final. A taxpayer also may be eligible to take an increased credit or exclusion for expenses related to the adoption of a child with special needs if the child otherwise meets the definition of qualifying child, is a United States citizen or resident and a state determines that the child cannot or should not be returned to his or her parent’s home and probably will not be adopted unless assistance is provided. The credit and exclusion for qualifying adoption expenses are each subject to a dollar limit and an income limit.

Under the dollar limit the amount of your adoption credit or exclusion is limited to the dollar limit for that year for each effort to adopt an eligible child. If you can take both a credit and an exclusion, this dollar amount applies separately to each. For example, if we assume the dollar limit for the year is $10,000 and you paid $9,000 in qualifying adoption expenses for a final adoption, while your employer paid $4,000 of additional qualifying adoption expenses, you may be able to claim a credit of up to $9,000 and also exclude up to $4,000.

The dollar limit for a particular year must be reduced by the amount of qualifying expenses taken into account in previous years for the same adoption effort.

The income limit on the adoption credit or exclusion is based on your modified adjusted gross income (modified AGI). If your modified AGI is below the beginning phase out amount for the year, the income limit will not affect your credit or exclusion. If your modified AGI is more than the beginning phase out amount for the year, your credit or exclusion will be reduced. If your modified AGI is above the maximum phase out amount for the year, your credit or exclusion will be eliminated.

Generally, if you are married, you must file a joint return to take the adoption credit or exclusion. If your filing status is married filing separately, you can take the credit or exclusion only if you meet special requirements.

To take the credit or exclusion, complete Qualified Adoption Expenses: Form 8839 (PDF) and attach the form to your 1040 or 1040A.

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