Financing your adoption


John Hakkarainen
Focus on Adoption magazine

Earlier this year, my wife and I started getting serious about the adoption process. My first question was, “How long will the adoption process take?” As a financial advisor, my next question was, “What are the associated costs?”

Each family’s cost will vary depending on their adoption path (international, domestic newborn, or Ministry of  Children and Family Development). No matter which path you take, there will be some costs. The reality of  children, and adoption, is that the costs associated with the process are only a small portion of the total funds needed to raise a child. Children take a lot of resources. If you are planning on adopting a teenager, for example, get ready for your food budget to dramatically increase.

Statistically speaking, the adoption process normally takes anywhere from one to three years. To start saving, the  best practice is to start living as if you have the child in your home now. According to a survey done by MSN Money in 2010, the average cost of a new born baby in the first year was $9,000- $11,000.

Count the costs

Now is the time to look at all of your expected costs. Once you have completed the adoption process, your  monthly expenses will increase. Some of these expenses may include higher food bills, clothes, daycare, increased MSP, new furniture, and toys. Factor in all expenses; this may also include aspects such as the costs of an openness agreement, or perhaps you will incur extra costs to ensure your child has the cultural experience and exposure they need.

Once you have calculated these costs, it’s time to look at your budget and see how your new set of monthly  expenses will fit in it. Likely you will find that you need to make some adjustments. Perhaps you are used to eating out regularly or taking elaborate vacations each year. If your budget does not allow for “extras,” I would  suggest that you start making changes now.

Budget and save, starting now

Once you have a budget and know exactly what all of your extra monthly costs will be, it is time to set that money aside each month. So, for example, if you estimate that once you have a child it will cost you an extra $750 per month, you should start saving that money now. Over the next two years, you will have set aside $18,000. This  money will help with your costs related to the adoption process, and when the child arrives you will be used to  living on less.

If you look at all of your numbers and there are no more “extras” to reduce, you will need to figure out how to  make more money or how to cut some of your fixed expenses. This may require making some big changes such  as moving, taking a new job, or downsizing to a more economical vehicle. As hard as it is to cut back (I like my  Starbucks!), we all need to keep our eyes on the prize and know that these changes are well worth it.

This exercise is very important. Once your family has expanded, you will appreciate the fact that you were  prepared. In the tax year, you will be able to claim up to $11,669 (2013) of eligible adoption expenses as a tax credit on your federal and provincial income taxes.

John Hakkarainen is a CARP Certified Financial Advisor with Sun Life Financial. He resides in Abbotsford with his wife Faith. John started his career with Clarica in 2004 and was joined by Faith in 2011. Outside of the office, John enjoys kayaking, hiking, weight lifting, and cooking. John and Faith also enjoy travelling and spending time with their cat. Contact John at, or 1-888-818-2942 Ext. 5.