Many Americans fret about taxes all year, but joyfully look forward to tax refunds this time of year. While most tax refund recipients will dream of extravagant purchases or spending the extra cash on luxuries, few people will put their refund toward an investment of a lifetime. Once you have your tax refund in hand, think earnestly about what to do with it.
According to CNNMoney.com, last year’s average tax refund was $2,548. That’s a significant chunk of change! If you’re expecting a tax refund check this year, it may be tempting to splurge on an expensive high-tech gadget or go on a shopping spree. A better way to use your tax refund could be to invest in something permanent, such as your adoption.
There are many ways your refund could bring you closer to your dream of parenthood. You could use your refund for attorney fees, your nursery, or to begin a college fund for your future child. Maybe your refund isn’t enough to finance your entire adoption, but perhaps it is just what you need to get started. In this new economy, times it makes sense to have a plan on what to do with your refund dollars.
Here are six smart ways you can invest your tax refund check towards your adoption:
1. Save for Future Adoption-Related Travel
Most adoption situations require travel. Whether you adopt out of town, out of state, or out of the country, you can expect adoption-related travel expenses. You could use your tax refund towards saving up for airfare, gas, car rental, hotel stays, and other travel-related incidentals like food or extra diapers. If you start saving for your adoption travel today, you could be staying at a nice new Holiday Inn rather than a budget Motel 6!
2. Set Aside Funds for Payment of your Adoption Attorney
Some or all of your refund could be reserved for future legal services once you need them. Preparing or padding your adoption budget for legal expenses is a proactive step toward adopting your baby. When the time comes to obtain legal help to safely complete your adoption, you’ll be thankful you planned ahead!
3. Start a 529 College Savings Plan for your Future Child
Your refund could be a great start toward your child’s future education. A 529 plan is a college savings option that provides tax incentives for higher education expenses. Depending on your state, 529 plans can offer tax advantages, grants, and scholarship opportunities. The plans are prepaid, which allows you to lock in current tuition rates for your children, or there is a savings option. Compared to a regular savings account, contributions to your 529 plan may be tax deductible. You’ll be able to use the money tax-free for college bills, and you could get a state income-tax deduction for your contribution. Talk to your financial advisor about what type of college savings plan will be best for your family.
4. Make a Contribution to an Adoption-Related Charity
Consider using your tax refund towards adoption-related causes, which will also provide a tax deduction when you file next year! Using your refund to make a charitable contribution will help others in need. Charities such as the Lifetime Adoption Foundation provide grants for adoptive parents, educational scholarships for birth mothers who chose adoption, and food, clothing, and other help for women and children in need. Learn how you can help at www.LifetimeFoundation.org.
5. Build Up Your Birthmother Budget
Some birthmothers may need assistance with medical bills or living expenses due to their circumstances. Through an attorney, you could help your future birthmother with expenses such as medical co-pays, rent, and utility bills. In today’s economy, more birthmothers need assistance with legally allowable adoption or pregnancy-related expenses. Expanding your birthmother budget will open you up to being presented to more adoption situations, which may in turn make your adoption happen sooner!
6. Start Shopping for Your Baby!
If you’ve already budgeted for your adoption expenses, your refund could allow you to make purchases for the baby you will adopt! Prepare your child’s nursery, baby-proof your house, stock up on bedding or clothing, get your car seat or diaper bag packed, and more. Do some online research, or ask friends with children what products they recommend for your baby or to make parenting your future baby easier.
Budgeting wisely with your everyday spending, as well as with extra funds, such as your tax refund, will move you closer to bringing your baby home!