Editors note: This is a guest post by Phoebe Stevens, a former financial adviser.
The average cost of delivering a baby in the U.S. is around $30,000, according to a 2013 study by Truven Health Analytics. You might think that it is less expensive to adopt, but adoption fees can range from a few thousand dollars to upwards of $40,000, according to the Child Welfare Information Gateway. You can scrimp and save for years to afford to adopt, or you can take advantage programs specifically designed for parents looking to expand their families. (You can view IAC’s adoption fees here)
Several organizations, such as the National Adoption Foundation and the Gift of Adoption Fund, provide grants to eligible soon-to-be parents. The Gift of Adoption fund has granted nearly $2 million to help more than 650 children be adopted. You can apply for a grant from the fund after you have had an approved home study.
The fund doesn’t consider the number of children you might have, your religion or beliefs, your race, age or sexual orientation when awarding the grant. What does matter is your financial need and your willingness to go through with the adoption. Grants from the Gift of Adoption fund range from $1,000 to $7,500. The average grant is around $3,500.
The National Adoption Foundation awards grants ranging from $500 to $2,000. The fund doesn’t look at income when awarding grants and its grants are for any type of adoption, including domestic. The foundation awards grants four times a year.
If you aren’t eligible for a grant, you might consider borrowing money to pay for an adoption. The National Adoption Foundation has partnered with two peer-to-peer lending programs, Prosper and Lending Club. Both programs allow you to borrow up to $35,000, often at competitive interest rates. The rate you receive is based on your credit score and history.
Depending on the interest rate on your credit card, you might find that using it to finance an adoption is a less expensive option. If you are eligible for a credit card with 0 percent interest or a very low rate, consider applying for it to pay for adoption expenses. The same is true of taking out a personal loan from your bank, but only if it offers a low interest rate.
Rearranging Your Financial Life
Making changes to your financial life can help you pay for an adoption. For example, if you are paying a high interest rate, above five percent, it might make sense to refinance. If you choose a cash-out refinance, you’ll receive a lump sum after you close. You can use the amount remaining after the first mortgage is paid off to pay for the adoption.
Another option is to get cash for structured settlement payments or an annuity by selling them. Instead of receiving a monthly payment over the course of many years, which isn’t helpful when you need a large amount of money, you’ll get your money in one lump sum.
You can also turn to friends, family and complete strangers for financial assistance. Start an online adoption fundraiser at a site such as YouCaring or GoFundMe. Promote your fundraiser through email or social media and ask your friends and family to spread the word. Keep in mind that some sites do charge fees and will take a portion of any money you raise.
About the author
Phoebe was a financial adviser for a Wall Street bank until she moved to the suburbs. She has a small clientele base and enjoys sharing what she has learned from them.