Adoptive Families Blog

6 Practical Ways to Use Your Tax Refund

Posted by Lifetime Adoption on March 26, 2018

tax-refund-adoption.jpgPlenty of us look forward to getting tax refunds this time of year. Many people dream of using their tax refund check on expensive purchases or plan to spend the extra cash on luxuries. But just a few people will use their refund on an investment of a lifetime.

As a hopeful adoptive parent, your tax refund check provides you with the opportunity to invest in your adoption. So once you get your tax refund, think seriously about what you'll do with it. This money could bring you one step closer to the adoption of your dreams! Read on to find out how.

According to Business Insider, last year’s average tax refund was $2,895. That’s a major chunk of change! If you receive a tax refund check this year, you might be tempted to splurge on that tech gadget you've been eyeing or a vacation somewhere exotic. But if you're still wondering what to do with your tax refund, a smarter way to use your tax refund is to invest in something near and dear to your heart, such as your adoption.

There lots of ways your refund could bring you closer to your dream of being parents. Some adoptive couples choose to use their refund for legal fees, for baby gear, or to start a college fund for their future child. Your tax refund might not be enough to pay for your entire adoption, but it might just be what you needed to get started. 

Here are 6 practical ways to invest your tax refund towards adoption:

1. Set Aside Funds for Your Adoption Attorney

Reserve a part (or all) of your refund for legal services, so it's available once you need it in the future. A wonderful, proactive step toward adopting your baby is to prepare your adoption budget for legal costs. When the time comes to get legal help to safely complete your adoption, you’ll be grateful you planned ahead!

2. Save for Adoption Travel

Most adoptions will require you to travel, and so you can anticipate adoption-related travel expenses. A great way to use your tax refund might be to save up for flights, gas, car rental, hotel stays, and other travel-related items such as food or extra diapers. Just think: if you begin saving up for your adoption travel now, you could stay at a new Holiday Inn instead of a budget Motel 6!

3. Start a 529 College Savings Plan 

Your tax refund could be used to start saving for your child’s future education. A 529 Plan is a versatile college savings account that provides tax incentives for higher education expenses. 529 plans can offer grants, tax advantages, and scholarship opportunities, depending on your state. They are prepaid plans, allowing you to lock in current tuition rates for your children. Or, there is a savings option. Contributions made to your 529 plan may be tax deductible. You can use the money tax-free for college fees, and you could even get a state income-tax deduction for your contribution. Ask your financial advisor which type of college savings plan would be best for you.

4. Contribute to an Adoption Charity

Think about using your tax refund to support adoption-related causes. Doing so will also provide you with a tax deduction when you file next year! Using your tax refund to make a charitable contribution helps others in need. Charities such as the Lifetime Adoption Foundation provide educational scholarships for birth mothers who chose adoption, and food, clothing, and other assistance to women and children in need. 

5. Build Your Birth Mother Budget

Some birth mothers may need help paying medical bills or living expenses due to their situation. Through an adoption attorney, you could help your future birth mother with expenses such as rent, medical co-pays, and utility bills. Increasing your birth mother budget will allow you to be presented to many more adoption opportunities. In turn, your adoption may happen sooner rather than later, as you'll be available to a larger number of potential birth parents!

6. Start Shopping for Your Baby

If you’ve already budgeted for your legal fees, birth mother budget, and other adoption expenses, you might start shopping for baby items! Your tax refund check might allow you to begin to make purchases for the baby you adopt! Get your child’s nursery ready, stock up on bedding, baby-proof your home, get a car seat installed...we could go on and on! Ask friends with children what they recommend, and read people's reviews of baby products online. Researching like this ahead of time will make parenting your future baby easier.

Being smart with your spending and using funds such as your tax refund will help prepare you financially to bring your baby home at any moment!

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Topics: adoption financing, how to afford adoption, afford to adopt, raise money for your adoption