Financing Our Adoption

Adoption cannot be fully discussed without disclosing the financial aspects of the process.  As this is a sensitive topic (yes, another one), I don't want to seem that we are flaunting finances or "buying" a child.  To stay true to the blog, I'll continue to be open and honest, but we will keep some specifics private as I don't think everything needs to be shared.

I'll begin by saying that adoption is not free.  It's far from it.  But depending on the road you take, the cost can greatly vary.

Looking at the United States for example, the price to adopt a legally adoptable child in the US from an orphanage or foster care is extremely inexpensive, and there are many state programs that cover these costs.  The HomeStudies for these cases are commonly covered or minimal as well.  There are also national programs that help with lawyer fees and whatnot.  However, adopting a newborn infant from a pregnant mom can be quite pricey: $15,000 - $30,000.  This is for couples who recruit pregnant mothers in the hopes of adopting.  Agency fees, medical bills, living expenses and legal fees must be covered.

Adopting internationally has a wide range of finances as well.  From what I have found, adoptions with African nations are the least expensive.  Latin America and Asian countries lie in the middle.  Eastern European nations are generally the most expensive to adopt from.  The fees involved for international adoption include agency fees, birth country government fees, travel expenses, HomeStudy/paperwork expenses, orphanage fees and Visa fees.  All of these can vary greatly.

When Ron and I first started looking into adoption, finances were a large consideration.  It is evident that for almost everyone finances are one of the main consideration with adoption.  Almost every adoption agency posts their fees for each country in a visible place on their website, and when I called to ask for information, the cost of adoption with that agency was one of the first things the representative would tell me.  This was extremely helpful in knowing what we could and could not afford.

As discussed in an earlier post, Ron and I knew we were essentially limited to adopting from Russia or Ethiopia once we moved to Thailand.  This was due to the adoption processes and laws of those countries as well as the US (the two-trip rule).  The price difference of adopting from Russia and Ethiopia is HUGE!

Adopting from Russia can cost anywhere from $40,000-$80,000, depending on the scenario.
Adopting from Ethiopia can cost anywhere from $20,000-$40,000, depending on the scenario.

The main difference is in country fees.  Ethiopia simply charges less for adoption than Russia does, and the costs are reflected in what the adoptive parent pays.

Ron and I then decided on Ethiopia (which was good as our heart was set on an African country).

Finances played a large role in finalizing our adoption agency.  As discussed before, we wanted an accredited agency that fits our needs, but that wouldn't break that bank.  I contacted over 30 agencies before deciding on Adoption Avenues.

For our Ethiopia adoption, the prices are as follows:

Application Fee: $250.00
Communication Fee: $200.00
Agency Fees: $4,000.00
International Fee (Ethiopian fee): $9,000.00
Translation/Processing Fees: $550.00

Total: $14,000.00.

In addition to these costs, Ron and I will have the following fees...

HomeStudy Fee: $1,600.00
Document Fee: $500.00
Notary Fees: $200.00
HomeStudy Update Fees: $1,000.00
USCIS Application: $850.00
Visa fees: $500.00
Post-Placement Reports: $1,000.00

We estimate our travel fees to Ethiopia (2 trips) to be around $4,000.00.  We will be using airline miles to cover the cost of airfare for at least one of these trips (2 if possible).

So the estimated total cost is of our Ethiopian adoption is close to $23,000.00.

This is us being open and honest!  Keep in mind that this isn't due all at once.  We have started to pay for the adoption, and will continue to do so until we bring Aidan (the name we chose for our son) home.

To put this in perspective, Ron and I won't have any labor and delivery medical costs.  We won't have an expensive co-pay for a c-section or NICU.  We will be adopting our son when he's around 1 year old, so we will not be paying for his clothes, diapers, health care and formula for his first 12 months.  When you add up all these potential fees if we had a natural born child, adoption isn't really that much more expensive!

In researching adoption, Ron and I found hundreds of couples who financed their adoptions through fundraising!  We even found a family that was able to fundraise enough money in 3 days to adopt 2 children instead of 1!  There are many grants, church groups, charities and other organizations that help fund adoptions and donate to families.  The resources available are incredible!

At first, Ron and I thought of trying to fundraise.  However, after making our budget and realizing the number of children in need of adoption, we changed our minds.  Although there are many resources available, they are not unlimited and endless.  We felt that we should not be taking those funds away from families in true need.  So we went a different route - we cut back.

Over the past 6 months, Ron and I have saved and saved and saved.  We cut back on a lot of little things we used to do.  We stopped eating out a lot (a HUGE money saver).  We purchased all our gas at Costco.  We bargain shopped.  We shopped at the local good will and thrift stores for baby clothes, gear, books and toys (we estimate we spent $800.00 on over $4,000.00 worth of items)!  We purchased washable/reusable diapers (BumGenius, http://www.bumgenius.com/organic.php) to save on diaper costs over the next 3 years for 2 children ($400.00 in diapers, which will save at least an estimated $5,000.00 for 2 children in 3 years: http://www.diaperingdecisions.com/VirtuesOfCloth.htm).  We sold belongings that we never used or no longer had use for (clothes, furniture, outdoor gear).  We turned our heat down, reduced our internet speed, and continued to have no cable TV.  We cut down on Christmas and birthday presents this year. 

We have been laughed at for doing so.  Yes, even I will admit that our house was a bit chilly these past few months (62-65 degrees, MAX) and I always wore a jacket!  When Ron was in Cambodia for 2 months, he ate simply and brought his own food to capitalize on the per diem pay he received rather than blowing it everyday on food and drinks, which was laughed at.  But it has been worth it.

These small cutbacks, as well as aggressive savings, have paid off.  We will be able to pay for our adoption ourselves without jeopardizing our other finances.  It's amazing at how much money we "wasted" before making these changes!

Our adoption from Thailand is completely different.  The Thai government does not charge any fees for adoption, and we will be doing the adoption directly through the government rather than with an agency.  We will still need to do an updated HomeStudy (about $1,000.00) and pay for a new USCIS application ($750.00).  But other than that, that's it.  The Thai adoption will take much longer to complete: 2-3 years, but it will be worth it!

To end this blog,  I will say that there are 2 current adoption credits that will help Ron and I with our adoptions.

1.  The Military Adoption Credit: The US military currently grants military families $2,000.00 to help cover adoption expenses AFTER the adoption is complete.  This grant is available for each child, but has a maximum of $5,000/year.  This credit, I believe, is reimbursable (meaning that if an adoption only cost $500, that is all you'll receive back).  Basically, you can't make money with this adoption credit.

On a side note, Service Members are granted an additional non-chargeable 21 days of leave for adoption travel and family days.  TriCare also begins covering children upon matching or placement, depending on the situation (and definitely upon legal adoption)!  For more information, visit
http://www.militaryfamily.org/your-benefits/adoption/reimbursement/

2.  The US Adoption Tax Credit: This tax credit expires in 2012.  Currently, the credit grants around $13,000 for non-refundable adoption expenses.  This means that if our adoption is completed in 2012, we will have a $13,000 non-refundable credit.  This can be applied for the next 5 years on our taxes.  If we owe money on our taxes, this money will be deducted from the $13,000 credit so we won't have to owe money.  However, if we don't owe any money in taxes, this credit will be transferred to the following year.  This credit is for re-reimbursable expenses only (If an adoption cost $5,000, that is the maximum credit you will receive.  Only direct adoption fees can be used in calculating the credit, so we're keeping ALL receipts).  It may help us a lot, or not at all, depending on our taxes over the next few years.

This credit expires in 2012.  There is a push to extend the credit to 2015.  President Obama included the extension of the Adoption Tax Credit in his budget.  However, it still needs to be passed in Congress.  If our adoption is finalized in 2013, this tax credit won't apply.  There is a chance the tax credit may be approved to be refundable (as it was in 2011).  If this passes, every adopted family will be reimbursed up to $13,000 for adoption expenses.  It will not matter if they owe anything in taxes.  With a refundable tax credit, you can get a tax return as well as the tax credit.  Again, you can't make money on an adoption-you can only receive back what you paid.  For obvious reasons, our fingers are crossed that the Adoption Tax Credit is at least extended, if not extended and made refundable.

For more information:
http://www.irs.gov/individuals/article/0,,id=231663,00.html
http://www.nacac.org/taxcredit/taxcredit20122013.html
 http://adoptiontaxcredit.org/legislation/

To help extend the Adoption Tax Credit:
Please "LIKE" https://www.facebook.com/AdoptionTaxCredit

Different people spend their money differently.  Some people enjoy nice cars or fancy jewelry.  Others prefer lavish vacations or a day of pampering.  Although I will admit I like those things, I love many other things more and want to do more with our money.  Ron and I joke that I am getting a rare African diamond and a precious Thai ruby in this process.  Although I will never wear these precious stones, I know that when my little gems smile, they will sparkle and glitter more than any other precious stone on earth.  To Ron and I, that precious sparkle makes every penny in this journey more than worth it!!!!

So in the end, is adoption expensive?  Yes.  Is it doable?  Yes!  With the help of agencies, grants, government aid and fundraising, as well as simple lifestyle changes and budgeting, adoption can be affordable to many families.  In our minds, we would rather spend our money on adoption than anything else.  There's no better gift than the gift of love and a family, and that's the exact gift Ron and I are giving each other, our family, and our future children for years to come!