Whether you want to start or expand your family, adopting is a viable and heartwarming option for all. While choosing to adopt a child can be an easy decision for some, there are several components associated with the process that you need to consider, like the cost. The cost of adoption can vary depending on the type of adoption and other factors; but either way, it’s a substantial personal and financial commitment. Affording these costs may seem challenging, but there are ways to make the expenses more manageable. Here are a few funding options to consider.
Apply for Adoption Grants
Adoption grants are some of the best ways to cover the cost of adoption. Unlike loans, grants don’t need to be paid back which makes them financially smart funding opportunities. There are many organizations that offer grants for adoption, so do your research to make sure you qualify and apply to several to better your chances. There may be some grants specific to your career or demographics, so be sure to take advantage of these.
While adoption grants are great in theory, keep in mind that they can be extremely competitive and may have specific criteria in order to qualify. This can restrict your options based on specific children, type of adoption, location, and more. If you do receive a grant, the payment probably won’t cover all of your adoption expenses, but it can help cut the overall cost.
Take Out a Loan
Just like any other substantial expense, you can also take out a loan to cover the cost of adoption. Unlike a grant, you’ll have to pay back this money over time, but this is a more straightforward funding option you can use. There are specific adoption loans available that may offer interest-free or low-interest options for prospective families, but make sure whatever organization you choose to borrow from is credible and trustworthy.
Alternatively, you can look into more traditional funding options like a personal loan to help with adoption costs. This type of loan is offered by most banks, credit unions, and online lenders and can be used for nearly any purpose. If you’re a homeowner, you can also research how to get a home equity loan to cover adoption-related expenses. This is a common funding option for those looking to adopt as it has a lower interest rate than a personal loan or credit card and has a fixed interest rate which makes it easy to budget for monthly payments. Just keep in mind that your home acts as collateral for this loan, so be sure to set up an organized payment plan.
Whatever loan you choose, make sure to evaluate your current financial situation beforehand to ensure you’re in good standing. Lenders will likely have minimum credit score requirements and other criteria necessary for loan approval.
Take Advantage of the Adoption Tax Credit
The Adoption Tax Credit is another helpful financial resource for those looking to adopt. Essentially, this credit can reimburse you for adoption expenses up to a certain amount depending on your financial situation. A great advantage to this tax credit is that nearly all expenses associated with the adoption process qualify, such as adoption fees, court costs and attorney fees, travel and lodging expenses, and more. Just be sure to document these expenses and keep receipts and records of your spending should you be eligible.
The maximum amount for the Adoption Tax Credit in 2020 was $14,300 per child. Families looking to adopt domestically and internationally may be eligible to apply, but qualification is dependent on your modified adjusted gross income (MAGI). For the 2020 tax year, if your MAGI was below $214,520 you were eligible for the full amount, but if it exceeded $254,520, you could not receive any of the tax credit. For all incomes in between those amounts, your tax credit is reduced. If you’re unsure if you qualify, you may want to consult with a tax professional before pursuing this option.
Ask Your Employer About Adoption Assistance
When looking for financial assistance for your adoption, don’t overlook your employer for help. With work-life balance and employee wellness becoming a bigger priority for most companies, some employers may offer adoption benefits or assistance, so it’s worth checking in with your human resources department for more information.
Depending on your employer and what kind of program they offer, the type of assistance can vary. Your company may cover adoption fees up to a certain amount, reimburse you for itemized expenses associated with adoption, or have another policy set in place. Even if your organization doesn’t offer any financial support, this is the perfect time to ask about paid parental leave so you have time to bond with your adopted child. This quality time can be even more valuable.
Get Support from the Community
Your community can also be a helpful resource when looking to adopt. Especially if you live in a tight-knit community, there are probably many people that would love to support you through the adoption process whether that be through advice, references, or donations. Depending on how much money you need for your adoption, you can host an event, sell homemade goods, or run a bottle or can drive to raise funds.
While it’s completely acceptable to turn to family and friends for support as you go through the adoption process, it’s important to be mindful when fundraising, especially if you’re using larger crowdfunding platforms. This fundraising approach can be effective in raising money but may raise concern from others. If you do choose this option, don’t share personal details about the child you’re intending to adopt or any other sensitive information. As always, you’ll want to maintain the child’s privacy and security and protect important information about your adoption plan and agency. Make sure to be thoughtful while fundraising and consider all of your options beforehand.
Adoption can be expensive, but there are many financing solutions available to help manage the cost. As long as you plan ahead and research your options, you’ll be fully prepared to welcome your child home.