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Tips for Individuals Planning on Adopting

Becoming a first-time parent brings with it a whole new world of financial challenges. If you are an individual or part of a couple who is planning to adopt, here are some ideas to help you navigate your decision.

Upfront Costs

Adopting a child offers the promise of a lifetime of possible returns that are immeasurable financially. But the upfront costs can be substantial. Adopting parents will pay for a home study, counseling, various document services and travel. They may also pay for the mother’s health costs, travel and other expenses. In the end, adopting a newborn could cost $20,000 or more.

To pay for the upfront costs, look at your pre-baby budget. If you are adopting an infant or young child, consider the cost of staying home, the impact on earnings for you and/or your partner, and incidental or full-time child-care costs. You’ll also want to take into consideration potential increases in health insurance and costs for medical care. Plan to set aside money today so that you can purchase the surprise items that you need without burdening your family later.

Complex Laws and Time-Consuming Process

Adoptions take time. The approval process can take months. Meetings often happen in person and during business hours. Laws vary by state, and they can be complex. Some adoptive parents hire an attorney to help with particularly thorny issues. If the child crosses state lines, you have two jurisdictions to deal with. In an international adoption, the complexities can sometimes seem overwhelming. Many adoptive parents navigate the system without legal help, but a skilled family lawyer can simplify the complexity and give you confidence.

Once the baby arrives, your family’s financial obligations change. Choosing a pediatrician, updating and navigating health insurance plans, and giving yourself more time to get from place to place with a little person all take time. Your insurance premiums may increase to cover the new arrival.

New parents should update their estate plans. Name the child’s custodian and clearly delineate what should happen with financial assets. Don’t forget life insurance! Make sure that you have a death benefit that covers the big costs: a mortgage, child care and future education costs are the most common needs to insure for.

Emotional, Physical, and Relationship Costs

With the first child, parents often feel strong emotions. Elation, exasperation, exhaustion, love, laughter and tears all are part of the first years of parenting. Sometimes new parents are surprised by the depth of negative feelings. warns that when adopting a newborn, the emotions of the birth mother and adoptive parent can sometimes create surprising and tense situations.

Make sure to budget time for yourself. Many books, podcasts, videos and audio books provide great resources and advice for a new parent, whether adoptive or not. Consider hiring a therapist. Your mental health is critical to the success of your child’s health.

Ongoing Costs

Babies have more than just the large one-time expenditures, such as a crib, changing table, car seat, stroller and so on. The financial considerations for new parents are ongoing and evolving. Two years after your child’s birth, you should expect to spend at least that amount all over again on the toddler-size version of the same items. A few years later, as the child starts school, the expenses increase even more. Your child’s interests, whether they are in the arts, sports or sciences, can quickly consume your family’s fun budget. You can save money in a 529 education savings plan, custodial account or other options.

A Special Note About Fostering

Adopting a newborn can be expensive, but newborn babies are a small number of the children available for adoption. The foster parent and adoption path is a rewarding way to make a huge impact on the life of a child who otherwise might not have the chance. The foster program will likely bring down the upfront costs from tens of thousands of dollars to all but a few hundred dollars.

Scholarships and financial aid for foster children can be a substantial help after high school graduation. And, depending on the state of residence, adult foster children may receive financial assistance.

A Proper Financial Plan

Adoption is an amazing experience that will transform the lives of everyone involved in countless ways. A proper financial plan helps you spend more time on the experiences that matter most, with your new family member in tow!

For more information on planning for an expanding family, visit and find a CERTIFIED FINANCIAL PLANNER™ professional near you.

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