Discussion: Affording Adoption

We took a distribution from my husbands IRA. There is a 10% tax and 10% penalty for doing this but we are hoping that the tax credit will offset some of it. We probably will not be one of those families that gets a huge refund from the tax credit because of how we got the $ for our adoption. The second time around (if I can convince my husband that we need to add one more to our family) we will adopt through the foster care system. It is not very expensive to go this route its just a long wait and more risks. I would love to adopt from Guatemala again but I just don't think the money will be there, but if a rich relative offers well then we will go to Guatemala again. :-) I look forward to hearing others suggestions. My son is priceless so I try not to think about the amount of $ we spent to bring him home.

We financed with an IRA also. I really don't feel guilty about it at all, either! It earned practically nothing since 1998, even went down some. I was thinking, we just bought a van which cost about the same as the adoption. We didn't even give it a second thought, we just said we needed it. But why did we agonize over the cost of the adoption for three years before going ahead with it?

We got some of the money from my parents, but for the biggest part we took out a Home Equity Loan. This was great to have the funds available whenever we needed them for all of the steps through adoption. However, Parker had been home for a little while, we refinanced that HELOC into a new mortgage. Those HELOC's can kill you on the interest. But, it was the only way we could have done this!!! A second adoption is not in our near future because of funds, but I wouldn't change what we did for anything!!!

These aren't spectacular ideas from us, basically waiting and saving)... 1) When we found out how much this was going to cost (wow!), we started including a timeline of fees due in our inquiries to agencies. That helped us put a spreadsheet together based on money in savings (with additions every month) with dates, and then subtracting out expenses and payments. I did this based on estimates of how long steps would take. 2) My dh insisted we pay off our cars before we continued. When we paid off our two cars, we saw we could afford to put a minimum of $500 per month into the savings. We also had a $5,000 nest egg. 3) Then, good in the long-run but a set-back, as far as I was concerned, dh decided to refinance our house to lower the payment, but he also took out an equity line so we wouldn't pay PMI... anyway, I guess that was good, in the end. By the way, STAYING in our small, "starter" home also enabled us to save all this money. By the way, the home equity line of credit was just what we needed (not all our equity), but it was also about the same amount as the tax credit, so we did this hoping that whatever we would have to take out as a loan, we could pay back with the credit. 4) We just kept saving, and anything extra we also put in there (my small, part-time salary minus school expenses and a few extras also all went into the fund). We knew by our timeline estimate when we could start our homestudy. Tax refunds, dh's annual bonus, all went into the savings [and then a big reduction when we paid of the line of credit / home equity we had taken out in step #3]. 5) Early on, someone put up some tips about how to save on everyday expenses. I took that to heart, and the first year we were saving we REALLY cut back on dinners out, coffee, clothing, EVERYTHING... this last year, since I have been working more, we have had more money to spend on extras... but we are sort of used to living frugally, at this point! 6) Well, we didn't plan it, but our homestudy and referral were much longer than I had orignally anticipated. So when we were lucky enough to get our referral, we had to take a small amount out of the equity line for the 1st half of our country fee. 7) Fortunately, dh's bonus is due in a couple of weeks, so we are hoping that is enough to pay off what we borrowed AND pay for the second half of the adoption. 8) For travel, I am hoping we will get some free nights at the Marriot (tons of points from dh's business travel... but our attorney may request we stay elsewhere), and all the expenses we will put on credit cards, which we will then pay off with a new card that will let the balance transfers have 0% interest for 6 mo. So hopefully, that will buy us enough time to pay off credit card with next year's tax credit, if we need to. We are still not sure how we will handle growing our family with child #2. I am proud that we won't have that much debt at the end of this, but we are not getting any younger! Still, dh has said for years that he only wants one child, so I think it will take a while to convince him, anyway! Sorry so long-winded! Hope some good tips come up! D.

We refinanced our home & used the equity we had built up.Some employers have an adoption grant. We were not so lucky, but ask.

We have a Marriott rewards Credit Card. It earns points with all purchases that can be used for free nights at Marriott Hotels. We put everything on this card and pay it off monthly to avoid finance charges. When you use it at the Marriott you get 20% off meals in the resturant and 20% off gift shop purchases. We had enough points by our pick-up trip that we didn't have to pay for the room.

We've been able to save about 15k over the last year which puts us about 50% of the way there. Currently we're a dual income household with no children, once our baby comes home I'll be leaving my job. With that in mind hubby and I have started living on his income alone and banking everything that I make which is adding up very quickly. In order to live on his income alone though, we've made a few sacrifices. We traded in both of our relatively new 30k plus vehicles and started driving more economical one's which reduced our monthly payments by 600.00 a month, we've stopped eating out so much, I've started grocery shopping based on the Sunday adds and stocking up on meat and things when it's on sale, I dropped my gym membership and started using the good old outdoors as my gym, it all continues to add up. In the end we'll probably be a little short of being able to pay for the whole thing based on our savings, so we're planning on taking a little out of hubby's 401k account. If we're going to borrow anything, at least we'll be paying ourselves the interest!

We have used my credit cards (which are still smoking ;) ), we used "leftover" money from student loans (Jason and I are both in grad school - he's part time because he works also and I am full time, and we refinanced our house. Took care of it all. So then, because Jason and I can never do things the easy way, we decided to adopt Alex as well. We used what was left of our savings and our tax refund (that gets us half way). We are also doing a huge yard sale, a small fundraiser and we are working with one of the Sisters at our church to put together a Fish Fry (Lent + Louisiana = Lots of Fish Frys). Scary, huh?? Michelle

Great thread, Steph (or shall I say, what a "faboo" thread). I loved NJRach's comment about the comparison costs of a new vehicle and the fees of an adoption--and our little ones never depreciate in value! I hate to give my answer because I know there are people scanning this thread for ideas and it was not what *I* wanted to hear when we initially started exploring adoption--we waited :rolleyes:. We waited until we could remodel a bit and refinance the house so that it would appraise for more, paid off our debts, and used some of the money that was left over to jump start the adoption. I know that when you really want to do this, you will go to all ends of the earth to make it happen, but for anyone starting out, please think about the stress that credit card and other debt will put on your new family. Sometimes it just might be better to wait, even if only for 6 months, to get some bills paid off. We also had to make the decision about fertility treatments (we have unexplained secondary infertility). We were both willing to try IVF, but we really had to come to terms with the risk. If we, personally, went with IVF, there was no money left for adoption if the IVF didn't work out. We chose adoption for its "sure thing" aspect. Best of luck to everyone! Christina

Michelle, we must have been posting at the same time--so sorry, I didn't mean to make it seem that I was referring to you with the credit cards. Let me clarify that we already had a ton of cc debt from house emergencies and knew it wasn't good to start off that way. We've had to use ours for fees here and there now that we are in the process, too! C.

We got lucky with DH old job giving him Stock which we sold and put into an IRA, we were able to use 1/2 of it to pay for fertility treatments and then were used the other half to pay for 1/2 of our adoption. For the other 1/2 we are going to take out a loan, or try to put it on a CC. We are also looking into a big yard sale, or some type of dinner type.

I am new to this forum as we previously adopted from Russia but are now exploring Guatemala for our second adoption. Anyway this is what we did: we refinanced our house and took equity out at the same time, so no loan, just our mortgage balance went back up a bit. Our family and friends hosted a Beef and Beer fundraiser, basically a big party, they hall was donated, they paid for the bartender and alcohol, the family provided the food. Tickets were $20 and that included your food, beer, wine soda and music for the night. My friends band played. People made up gift baskets and donated things for raffles. Raffles tickets were sold, there were great baskets and prizes. We had about 180 people show up, it was a blast, so much fun sharing time with family and friends and celebrating our future child. We netted 7k!!! We used this for our travel expenses and for our orphanage donations, so we were able to bring lots of great donations on both trips. It was a wonderful and emotional night and we are blessed our family did this for us!

Well, just FYI-- here in Missouri, you get 10,000 tax credit from the state as well as from the Fed. So that is huge. Our adoption cost us around 28 K. I asked my grandparents for an interest-free loan that I would pay back a little at a time when I received the tax refunds. THey said yes and loaned us 26K. We paid the travel costs ourselves which added up to around 2K.Leah

We took a 401K loan. We borrowed 10k from it and we pay it back with interest to ourselves. My husband's pay check is $50 a week shorter for the next 4 years but we can live with that. We also used money from the Home Equity loan to pay for some of it. And we saved about 10k during the process. We only allowed ourselves to eat dinner out one night a week. It's amazing how much money that saves.

We have not started the process yet and are still in research phase, but our plans are to first pay off debt. I hate the delay that is going to cause, but as another poster has said, it will be better in the long run as we do not want to start a new family with the added stress of CC debt. I will, however, likely use the lower interest card for travel.I am planning a huge garage/yard or flea market sale as well. I have asked DH to go through all of his tools and gadgets to see if he can let go of anything. I wish we had the testicular volume to go to DH's brother (money) and ask for a loan. If it was MY brother with the bucks, I would not hesitate, but ... well, you know how it could be with family/money issues. We will refi the house or get a home equity loan - and pay off a huge chunk of the balance with our tax credit. I am a business owner and just recently let 2 part-time workers out of their contracts (other reasons for this, not just our financial need). I will be doing their jobs and saving a lot of $ from that, which will all go into paying off debt and savings.