Although it may seem trivial, this practical side of the foster/adopt approval process is crucial. All states offer foster/adoptive parents some type of reimbursement for having children in their homes, but it is not wise to rely on this for income going into the approval process. Here are a few reasons why:

• Not all children may qualify for adoption assistance
• Reimbursements can be late or get caught in the system when they need additional paperwork/approvals
• If you aren’t relying on the state’s reimbursements for income, it will keep you from subconsciously viewing children in your home as an income stream (yes, it happens.)
• It will keep you from being in an adversarial relationship with your local state department. Missing a reimbursement check should not be a reason for a panicked call. Trust me, there are bigger fires for Case Workers to put out.

The only healthy way to look at the state’s reimbursement, is as a peripheral benefit to what you have already decided to do: foster or adopt. I encourage families to set aside $200-$500 at approval in a separate account that they can use for the initial expenses that come with receiving your first placement: buying a car seat, buying new clothes, baby supplies, etc. Some parents put all reimbursement they receive in a separate account and use that for foster children whenever possible. This can help you keep track of spending and receipts you need to submit.

Now lets talk requirements. What exactly do your finances need to look like? This probably varies widely from state to state but in Georgia the state is looking to see that you have a monthly surplus every month in your budget. Preferably this means a surplus of at least $300 (But I think you will find that is not nearly enough when adding children to your home!!). You guessed it, this means that you need to have a budget! If you don’t have a written budget that you and your spouse have agreed upon that is step number 1.

Make a Budget

Be detailed. Go through your last bank statement and add up how much you spent on utilities, clothes, recreation, gas, car payments, etc. Have you found that you have a surplus of money at the end of the month? Or are you living pay check to pay check? A great way to list out your budget is on an excel spreadsheet with your total monthly net income at the top. If you find every month that you are spending all of your income, ask yourself why. Is there any category that can be cut? Is there an area where you are over spending or needlessly spending? Getting more disciplined with your budget may just give you the surplus you need.

List Your Debts

List your debts, and be sure to factor in the monthly payments for each of those debts into your budget. Even though you still may have a monthly surplus with debt payments, one thing you will want to determine is your debt to income ratio. Excluding your mortgage, if all of your debts were called in today, could you pay them? If one spouse suddenly lost their job, would you lose your house or your car? How quickly would that happen? Do you have a negative net worth? For many there are simple ways you can reduce your debt like getting a less expensive car or using savings to pay off a credit card. This is important because many foster children are coming from home lives that are chaotic because of poor money management. If you have to close your foster home because your debts exceed your ability to pay them, that is one more move for a child, causing even more trauma and loss.

Having an Emergency Fund

Having an emergency fund is just another component of financial stability. For many having an emergency fund is the difference between a minor inconvenience and having to file bankruptcy. There is no number requirement for an emergency fund, but the typical rule of thumb is having 3-6 months of expenses on hand just in case something catastrophic happens. What if you suddenly had to pay both your medical deductible and car insurance deductible; Could you do it with your emergency fund? An emergency fund will give you the cushion and freedom to deal with job losses with no major stress, and allow you to continue the foster/adopt process with no breaks in placement for the child. This step is especially pertinent now as COVID-19 shut downs have revealed just how fragile our economy can be.

Stability of Income

One of the things required in the approval process is verification of your income. You can provide this through pay stubs and through your W-2. You will need to show that your income stream is consistent, barring any extenuating circumstances. Some things to consider: Are you paid hourly? If so, how do you provide for your family when you get sick and can’t work? If married, could you live off one spouses income? How long have you and your spouse been at your current jobs? Have you ever been laid off in your industry? Is that a frequent occurrence? Do you have any passive income streams you can utilize? If your income stream is erratic and unpredictable, or fragile for one reason or another, it may not be the right time to foster/adopt.

I hope as you read this you see the importance of assessing financial stability for foster parents. There are two major aims in assessing this: 1) The state does not want their foster parents to look at fostering as an income stream (that isn’t healthy for anyone) and 2) We do not want children to move homes due to financial instability. 

All that being said there is no income threshold requirement, you don’t have to be a homeowner, and you don’t even have to have that much extra space! While we do expect families to be financially autonomous, reimbursement can be a great help to you in your endeavor to serve children. And that is exactly what we want it to be: A Help. Not a core income stream. I want to end this post with a sample list of things that are reimbursable for foster children at least in Georgia in addition to the monthly stipend foster parents receive:

• clothes
• diapers (up to $30-$50)
• haircuts
• school expenses (yearbooks, pictures, etc.)
• extra curricular activities
• summer camps

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