Adoption And Debt

Miriam is excited about adopting a baby, but she's confused about how to get the money for it.

QUESTION: Miriam is debt free and adopting a baby. That will cost about $22,000, and they want to know the best way to save up for it. When the baby is placed with them, they will have to come up with $12,000. They could either do a $10,000 interest-free loan, or cash out Exxon stock. She thinks it’s all right to go into debt, but she’s missing something here.

ANSWER: You wouldn’t be taking out the loan for an adoption; you’d be taking out a loan to avoid cashing out your stock. You don’t need to be in single stock anyway. Finish your adoption fund by cashing this out, and then you’ll just be sitting there waiting for the baby. Cash out the Exxon stock and put it in an emergency fund and an adoption fund. When those are fully funded, if there is any left, I’d put it in mutual funds.