As explained in other blog posts, our family views FI as a tool, not a destination. In a recent article SimplyFI was featured in on MarketWatch, I explained, “The whole point for us is not to achieve a certain number. It’s to build a life for ourselves and our children that is satisfying and reaches the goals that we have.” Part of that picture for us is to be foster parents. Here’s a little explanation on how we make foster parenting work while still aggressively pursuing FI.
First, a disclaimer. You should never become a foster parent for the goal of making money. There are thousands of ways to make good money. Any money that you receive as a foster parent is meant to be a reimbursement for the expenses you incur for your foster child(ren). It is not “income,” and it is not taxed as “income.” Again, DO NOT consider becoming a foster parent with plans to make money!
That aside, there are easy ways to keep expenses low so that you can provide an awesome home and opportunities for foster children without breaking the bank.
First, states provide a daily reimbursement rate for foster children depending on their age, need level, and your location. There is a significant range by state, but our state averages $16-$17/day/child. To receive this reimbursement, you don’t actually need to submit any receipts for expenses. The state mails you a check once a month for the daily rate x the number of children you are fostering x the number of days they were placed in your home.
All medical care is covered at no cost to the foster parents. Medical, vision, dental, mental health, therapies, etc., are all covered under Medicaid. Additionally, many Medicaid MCO’s will provide for mileage reimbursement for medical appointments so long as you have the child’s ID number and call in advance. Our child’s MCO reimburses mileage at $0.50/mile round trip.
Children under 5 years old are also eligible for WIC because they are seen as their own economic entities. For children under 12 months old, this typically covers all costs for formula and other healthy food options. For older children, you should consider the daily reimbursement range as covering food expenses. Older children also typically have higher daily reimbursement rates.
Many states have separate reimbursement categories. In our state, children receive an allotment of $150 four times a year to purchase seasonal clothing. We simply shop for the child’s needs, submit the receipts, and receive a reimbursement check. Some states also have funds for holiday and birthday presents, or you can look into local organizations that raise money for special events in a foster child’s life. There are also some instances where foster parents receive a special diaper allowance. We use cloth, so we wouldn’t use that.
Sadly, in many cases children in the state’s custody are not able to be reunited with their families for various reasons. In that case, if there are no relative placements available, foster parents are the first ones asked to adopt the child. There is a huge misconception that all adoptions are expensive. However, adopting a child from the state is practically free! All legal fees are covered by the state. The only adoption expense in our state is to pay for the changed name on the birth certificate. That costs around $50! Additionally, before the adoption occurs, the adoptive parents and the state negotiate an adoption subsidy. This is a monthly reimbursement that is not to exceed the reimbursement rate of a foster care placement. Often included in the subsidy agreement is free college tuition and Medicaid coverage until the age of 18!
Obviously, no one is going to get rich off of providing a loving home for a foster child. That should never be and rarely is the goal. I hope that you can see, however, that becoming a foster parent does not need to derail your path to FI!
