Many families wish to extend the warmth of their homes to welcome children and exchange students. For many, welcoming a new child or student to their family can be rewarding – both for the child and for your family – but the arrangement requires some planning. When considering becoming a foster parent or foster parent, be sure to anticipate the potential financial impacts as well.
First, think about the lifestyle you want to provide for the student. What experiences, family traditions or activities do you want to share with the child? How do you see everyday life with the new addition? The answers to these questions will help you prepare for the impact on your budget.
If you have any experience with raising children, you know how expensive it can be. The situation may be different when taking care of children placed in foster care. Most families will be reimbursed for at least part of the costs they incur, including medical and dental care, which are normally paid for by the state. Although it is important to note that the level of reimbursement may vary depending on your state of residence, the age of the child, the number of children placed in your home, and other factors. Be sure to consult the appropriate agency in your state to find out the level of financial support available if you are considering a foster parent role.
Whatever reimbursement you may receive, the reality for many foster families is that child care costs will likely exceed this amount. Factoring this into your financial plan will go a long way in ensuring that you are well positioned to meet your responsibilities as a foster parent.
Welcoming a foreign student
Welcoming an exchange student is a different level of commitment, but it is not without financial impact. Exchange students tend to stay for the duration of their program, which is likely a semester or an academic year. These students are generally older and able to handle their day-to-day responsibilities on their own.
In most cases, the student’s program will cover the cost of health insurance, tuition, and extracurricular activities. Additionally, many students will have their own pocket money to pay for souvenirs, school meals, entertainment, and other expenses typical of a school-aged child.
Nonetheless, you will want to be in a strong financial position to provide the right environment for exchange students. They may depend on you for things like transportation to events, as well as living space. If you include them in family activities, it can also increase your expenses. Host families may benefit from a modest tax deduction to help offset some of the costs associated with housing an overseas student. Be sure to consult your tax advisor for more information.
Get your financial house in order
Before you commit to being a foster parent or foster family, you want to be financially prepared. Some of the steps to consider include:
· Expanding your emergency fund: It is generally accepted that you should have three to six months of living expenses set aside in your cash reserve. Having additional children in your care can lead to unforeseen additional expenses, so consider having additional funds available beyond this standard.
Stick to your other financial priorities: As you update your budget to reflect your new addition, make sure you continue to fund your own financial goals, like saving for education costs, paying off your mortgage or your retirement.
Understand the child’s program or financial situation: find out what costs are covered by the state (for host families) or the program (for exchange students) and update your budget accordingly. result.
Getting your financial situation in order before hiring a foster child or exchange student will help you create a more positive experience. If your home and family are ready, make sure your finances are ready as well.