Baby Balance Sheet: Navigating Adoption Expenses in Denver on $180K a Year
They took out a loan to cover $70,000 in adoption-related expenses.
The path to parenthood looks different for everyone. And families choosing to adopt can face some pretty big hurdles along the way.
Adoption can also be a very expensive endeavor, as we learn in our latest edition of Baby Balance Sheet. When our featured subject, a writer, and her husband began talking to a private adoption agency, she asked how most people afford adoption, which requires would-be parents to have several thousands of dollars ready at a moment’s notice.
In order to cover the adoption expenses, our subject family decided to take out a home equity line of credit. Other families are often able to take advantage of grants and tax credits. If you’re looking for more info on the cost of adoption, our writer recommended Famally, a new site dedicated to providing resources to non-birthing parents who come to parenthood via adoption, surrogacy, or foster care.
About me: I’m a marketing professional and mom of two boys.
How old are your children: I have an 18-month-old adopted son and a 13-year-old stepson.
Where do you live? Denver, Colorado
What is your family household income? $180,000
Age of parents: I’m 36 and my husband is 38.
Were you worried about being able to afford a baby? Why or why not? When infertility left us looking at more costly medical treatments, adoption, or surrogacy, growing our family became a much more serious financial decision. We knew adoption would be expensive, but we were expecting closer to $50,000 and it ended up being over $70,000.
We did what is known in the industry as a “stork drop,” where we adopted a baby whose birth parents didn’t decide on adoption until after their child was born. Basically, it gives adoptive parents roughly 24 hours to decide if they want the child.
That also meant we needed roughly $75,000 available to us at a moment’s notice, which isn’t always easy to get. Before we started the adoption process, we took out a home equity line of credit, so we would be able to easily access the funds when we needed them.
Did you have a savings goal before your baby arrived? Yes, we had a savings goal because we did adoption.
We saved $13,000 in a separate adoption account. We also knew that we would be taking out a HELOC, and we planned for that against bigger overall financial goals. We tried not to borrow other loans or take out credit card debt so we could focus on that repayment.
Our adoption cost: $70,490, which included:
Initial application with the adoption agency: $1,550
Yearly fees and home study: $1,445, paid twice because we had to renew it ($2,890 total)
Finger prints: $109, also paid twice ($218 total)
Mandatory CPR classes and trauma education: $254
Adoption book: $224.73, paid twice because we reprinted an update when we renewed ($449 total)
Adoption services and birth parent expenses: $62,156, which had to be placed in escrow as a lump sum when we got our placement
Finalization lawyer: $2,973
It’s also worth noting that our expenses were a bit lower because our baby was already born when the birth parents decided on adoption. Otherwise, the costs would be much higher. Before we started the process, we found it difficult to find information about how much adoption costs and how families really pay for it. We’ve found this resource to be helpful.
What kinds of financial tools (or tricks!) are you using to help reach your savings goals? Budgeting spreadsheets [which] account for every dollar each week. We also went without a honeymoon and vacations because we knew we were saving to adopt a baby.
Are you setting up any savings accounts for your baby—like a 529, custodial account or something else? If yes, what kind of account(s) are you using? Yes, we set up a 529 account. But it took longer because we had to wait for the adoption to be finalized and the paperwork to be filed before we could open it.
If you’re setting up a savings account for your baby, are you hoping friends or family might contribute to it too? Yes, some family members have offered to help, but they haven’t contributed yet.
When it comes to money, what part of having a baby (or raising a kid) feels most stressful? Child care, college, and thinking about adopting baby #2. It was a significant investment to adopt.
Are you receiving (or will you receive) any family help for paying for baby expenses? We had friends and family who gifted us money at our wedding that we put toward our adoption funds.
My parents bought us a crib when our baby came. Otherwise we bought secondhand or repurposed furniture, strollers, clothing, etc.
Can you share how much you spent on your baby/children in the last month? Break down an itemized list which includes childcare costs, food and formula expenses, and the amount you spend on diapers, wipes, clothes, etc. Plus any contributions to 529 and/or other savings accounts.
In the last month, we have spent:
$568 on groceries
$320 on child support for my teenaged stepson
$95 on diapers and wipes
$45 on clothes (we resell clothes to the local consignment shop and use that credit to buy new clothes)
$140 on swim lessons for the toddler
$128 on karate lessons for the teen
$70 on violin lessons for the teen
$20 on “home phone” access for our teen
$600 into college savings between our two kids ($550 for the teen, and $50 for the toddler)
$890 on our HELOC loan repayment for the adoption (the term is 10 years)
Our parents watch our toddler two days a week, otherwise I work from home during nap times so we don’t currently pay for child care. In the past, we spent $435 a week on three days a week of child care and relied on our parents two days a week.
How much do you discuss the cost of raising a baby with your partner? Frequently. We’d like to adopt again but aren’t sure we can financially do it and provide what we want to provide for our other two children.
