7 Expert Tips on How to Save for Surrogacy

Q: I’m reading everywhere that surrogacy costs can be upwards of $75,000. How can my partner and I start saving for this?  –Robert N.

A:  Hi Robert, this is an excellent question and I will cover some of the best ways to jumpstart your savings plan.

Surrogacy costs can climb fast and having cash on hand is important for funding the process. The first thing you need to do is figure out how much the process is going to cost. A surrogacy agency can normally give you a ball park estimate of the total cost. Once you have that number, compare it to your current savings and determine how much money you need.

Here are a few EASY tips to start getting money stashed away

1. Fund Your Health Savings Account or Flexible Spending Account

Your employer will withhold money from your paycheck and deposit it into a tax-free plan. The accounts can be used for certain surrogacy expenses and you get a massive bump in saving from tax incentives.

2. Budget. Budget. Budget.

Make a simple budget for the month. What are fixed costs and what can be limited? Mortgage, utilities and food costs are hard to alter. The rest can be reduced or removed. YNAB has excellent software that will show you where your money is going. We also have the SeedTrust Budget Worksheet to help you.

3. Sign Up for an Automated Savings Plan

Digit automatically takes money from your account in a way that won’t hurt you. It uses an algorithm to analyze your spending habits and then makes small deposits to fund your savings account. You won’t even know it is there.

4. Stop Spending Money on Starbucks and Going Out to Lunch

After looking at your budget, you will easily see the faults in your spending habits. 99% of people spend money at restaurants in an extravagant manner. You don’t have to completely stay home every night but, instead of going out to eat 3 or 4 times a week, limit yourself to one meal a week.  Even that one meal out a week, if you are married, is costing around $50 , which is $200 a month just in restaurant costs.

5. Start Looking at Monthly Bills to See if You can Find Ways to Save

Cable companies are notoriously bad for overcharging their customers. Most will negotiate better rates for their existing customers. Saving $50 or more a month is easily done. You can also get rid of Premium Channels such as HBO when Game of Thrones is not in season. Or simply purchase the episodes on itunes or Amazon. In most cases, that is cheaper than the monthly subscription rate. Insurance companies are another area you can normally save money. Cross shop other providers to compare rates.

6. Stop Keeping Up With the Kardashians

Figure out what you really need and purchase only that. When you are in savings mode it is important to keep large, frivolous purchases under control. You don’t need a new Lexus when a similar Toyota will do. That could save you hundreds of dollars a month.

7. The Most Important Tip is to Keep Your Eye on the Prize of Saving for Your Future Family

All the mentioned tips are helpful but none will work if you don’t keep focused on why you are saving. Once you map out your financial goals, do not stop until they are reached; if you get sidetracked or make mistakes, don’t give up. Unexpected expenses happen and they should be expected during the process. Once you are all done, it will be worth it.

—Edward Brockschmidt, CPA & Co-Founder of SeedTrust Escrow