Practical Financial Strategies for Foster & Kinship Families

How do you manage daily expenses and budgeting when you are a foster or kinship caregiving family? We speak with Nicole Valenzuela, a foster parent and founder of Fostering Finances, to learn about simplified budgeting practices and healthy mindsets for managing money.

In this episode, we discuss:

• What are the financial challenges that foster and kinship families commonly face?
• How do those challenges differ between kinship caregivers and licensed foster parents?
  • Are there particular challenges for LGBTQ+ and BIPOC foster or kinship families?
  • What about single foster parents or kinship caregivers?
• What are the day-to-day costs that aren’t always covered by stipends or allowances? 
• What hurdles might the informal caregivers face (those not participating in the foster care system while caring for a relative child) in accessing services or support?
• What financial supports may be available but underutilized by foster and kinship families?
• What are the Kinship Navigator Programs? How can they help — where are they found, etc.?
• What are some tax strategies or credits that families caring for foster or kin children may be eligible for?
• How can caregivers build a small financial buffer for the inevitable emergency that comes with raising kids? 
• What advice do you give around savings or flexibility?
• Suggestions for simple budgeting or expense-tracking strategies that foster or kinship families might implement right away?
• What are some low-cost ways for foster parents or grandparents raising grandkids to meet these kids’ needs while preserving their dignity?
• What other effective community-level initiatives or organizations are you aware of that support these families?
• How can caregivers locate and tap into similar resources in their own communities?
• How do caregivers decide which financial strategies to focus on first?
• What practical steps can they take to set in motion a plan to stabilize their household finances over the next 6 months?
• What are some early small wins that build confidence—say, saving a few dollars a week, or successfully claiming a benefit?
• What is a scarcity mindset and what are signs that a caregiver might be struggling with scarcity mindset?
• What are the top three ‘practical financial strategies’ you’d want every foster or kinship caregiver to walk away with from today?
• Finally, what’s your best encouragement to caregivers who feel overwhelmed by financial pressures?

Transcript

Please pardon any errors, this is an automated script.

Hello and welcome to creating a family talk about adoption, foster care, and kinship
care. My name is Tracy Whitney. I'm the host for today's episode. I'm also the host
of the Weekend Wisdom's short podcast that comes on Saturdays. And I'm delighted to
be here today to talk to Nicole Valenzuela about a topic that is crucially important
for foster and kinship families. She's going to walk us through some practical
financial strategies for foster and kinship families. Nicole is the founder of
fostering finances where she helps foster adoptive and kinship families navigate
financial challenges included in caregiving, including how to build stability and
opportunity for the children in their care. She's passionate about helping families
break cycles of scarcity and create homes where kids can thrive. You can follow her
on Instagram at at fostering finances and we're really happy to have you here with
us today Nicole. Thanks so much for joining us. I think that a lot of families
feel awkward and uncomfortable around the topic of money. It seems to be one of
those things that our our culture doesn't necessarily talk about well. And so our
goal for today's conversation is that foster parents, grandparents, aunts, uncles, or
other family members who are raising a relative's child will have some practical
tools in the flow of today's conversation. So welcome to creating a family.
Thank you. I'm so grateful to be here. So let's start out with kind of an overview
of the basic financial challenges that foster or kinship families most commonly face
that you hear about in your work. Yeah. I wanted to start off by just talking
about finance first, right? Finance at its core is super simple, right? You just
spend less than you make. And even if you want to grow your financial health,
you have only two options, right? Reduce your expenses or increase your income. Super
simple, super easy, right? But in foster and kinship care, the challenge isn't the
math, right? It's the life piece of it. Yeah. It's that child showing up at your
doorstep with no shoes and just the clothes on their back. And that being a
financial pressure that's unexpected. There is the child that you're trying to comfort
as they get in the vehicle and they're crying and screaming because they have to
head to a visit with bioparent. And that parent is their abuser. And that's that
emotional toll, right? Then it's, you know, sitting down at the dinner table and
having to explain to a child why a bunch of adults make decisions for their life.
It's the trauma resurfacing at an unexpected time that requires you to take time off
of work for therapy visits, right? So while the numbers of finance are simple,
the financial reality isn't. And for foster and kinship care,
money isn't just dollars and cents. It's the unexpected cost. It's the time we lose
at work. It's the emotional toll of trying to keep a child safe. And that's why
for families like ours, money is survival. And survival is deeply emotional and every
dollar carries the weight of safety and stability and love.
And so those, I think, are the biggest challenges that come with being a foster
parent as it relates to, and kinship family as it relates to finances. That's a
really good point. The intricate tie between our lives and our money and it's even
more heavyweighted when it's a child in crisis. Yes. So based on your experience,
how do these particular challenges maybe differ between the kinship community and the
foster community? Yeah. It's a good question because I think financially the
challenges are on steroids for kinship care provider. Foster parents receive stipends.
We receive training and different other supports where kinship, it's a lot more
limited and the needs of the child are the same, right? Kinship, care waivers don't
love less or do less for the children, but the funding and policies are not
designed, in my opinion, with them in mind. And I think the heartbreaking part is
they don't access those funds because they may not want to the trade off of the
loss of privacy, right, the loss of time with the constraints of different meetings.
And so they're choosing that love over that kind of bureaucracy. But love,
you know, it doesn't pay for the needs, unfortunately. So they're experiencing some
extra financial challenges with not having the same resources. Yes, that reluctance to
be part of the organized foster system as a kinship care provider can be a pro for
their kinship dynamic in their home, but it can also be a con. And it can feel
very stifling. It can feel very limiting, as you mentioned.
And I think, too, generationally speaking, there's sometimes a deep distrust of the
system, especially when it comes to private family matters. So those are all
significant differences between the two types of caregivers that we're talking about
today. Absolutely. Can you talk a little bit about some particular challenges that
LGBTQ or BIPAC families might face when they're talking about finances in the foster
system that we maybe don't know about or don't talk enough about? Yeah. So I think
sometimes the challenges with the LGBT plus community and the Bipop community might
seem invisible, but they're really very real and they can compound a lot of the
financial stressors. So for both of those communities, there is a pay gap and a
workplace discrimination, which is going to often lead to less income or less
stability and income, which is obviously a huge financial stressor. For Bipop
families, you know, statistically, they have more jobs that are hourly and no paid
vacation versus salary. So if they're leaving for an ad hoc appointment,
that's less income. Bipop families are also disproportionately making up the population
of kinship care. So as we just talked about, there's, you know,
same cost, less assistance. And that's going to create a financial hardship. And then
for the LGBT community, it's a support. You know, this is to be very honest and
it's not easy for me to say, but it matters. So I will. Foster care support
networks are often rooted in faith and religion. A lot of people of faith and
religion become foster parents because they're drawn to it based on their faith. And
that community, not all, but some view the LGBT plus community as sinful or wrong.
And so imagine you're a member of that community and you're hearing, you know, we're
here to support you, but we don't support your identity, right? So that can feel
very isolating for that community. And they may not choose to access those networks
and support that are very, very vital and important in some cases. So these are
just to name a few. Then there's other things that I think are beyond the dollars
and cents. Systems are not necessarily made for the LGBT community in the sense that
they're a little bit more traditional. So this is a very small example and I'll
just story tell, but we had a bonding assessment and they reached out to us and
said, okay, we need to do it with the primary caregiver. Well, our family's not
rooted in traditional family values that may have the breadwinner and the stay -at
-home parent or the traditional caregiver. We're both equally participating in bath
time and getting school, things ready for school, doing the homework. So for us,
it was, hey, we both want to be at this bonding assessment. And I don't think that
that song.
In terms of emotional hurdles, we're navigating racism, homophobia, transphobia,
and that takes an emotional toll. So, yes, the financial math of the costs are
similar for all foster and kinship families, but the context isn't. LGBT Plus and
BIPO caregivers are, again, doing the same work, fewer supports, heavier scrutiny,
and more barriers to safety nets. So that's why inclusive affirming and equitable
support systems aren't just nice to have, but they can be survival for some of
these foster and kinship families. That makes sense. Are there specific financial
challenges for single foster parents or single kinship caregivers that we may not be
aware of? Absolutely. I mean, I, for context, am a married married woman. There's
days where my wife restrates me and I'll look at her and say, you know what, I
think I'm going to keep you because this road is hard. It's a full load.
And for a single parent, it's, again, half the resources, half the income. They're
down a person being able to go to these court dates meetings. And so every dollar
has to stretch. And then the emotional energy from caregiving for kids with trauma
can take capacity from your ability to work on your finances. So for single
caregivers, the challenges aren't just financial, they're layered, constant, exhausting,
and yet so many step up anyway, which is incredible. A key for them is just to
find more resources and support structures. So let's talk about some of those day -to
-day experiences that any of these foster or kinship caregivers might have that aren't
covered by the stipends or allowances or other resources that we've already identified
as maybe challenging for them. Yeah. Every state is different and every family's
lifestyle and priorities and how they manage their money is different. But one
commonality I always hear from every foster parent I talk to and quite frankly what
the data shows is that the stipend does not cover everything. It's intended to,
you know, cover room and board, some clothing, personal allowance. But, you know, my
foster son is in the 99 percentile. Every time I turn around, he's wearing a
different size. So, You know, it's not covering even what it's supposed to with the
clothing allowance. And you add haircuts, extracurricular activities, birthdays, tutors,
transportation, you know, the car seat needs replacing, all of these things add up.
So if you're already a parent, it's the day -to -day things that the stipends don't
cover. And these normal things are for the child's safety for the well -being,
the normalcy, and also the inclusion of the child into that family structure. And so
foster and kinship families are stretching their own resources to cover the real cost
of giving kids, not just the safety, but a full and stable childhood. And what are
some of the hurdles that informal caregivers, those are not participating in the
foster system, encounter when they're trying to care for these kids and those
supports and services and shoes and things like that? What are some of the hurdles
that they face? Yeah, I think for the most part, it's no formal documents.
So that is going to limit their access to resources in some cases.
And they will struggle with eligibility to maybe get things like Medicaid or food
assistance or those subsidies that foster care may get. And they're,
again, having to come out of pocket on a fixed income. On top of that, the system
is confusing. So there's kind of no clear front door way to get some access to
these resources. And so there's a lot of time spent on phone calls and searches
trying to get those access. So it can feel isolating and invisible,
even though they're doing all of the hard work of caregiving. And a little bit like
Groundhog Day, because you have to get up tomorrow morning and do all the phone
calls and all the emails over again. Maybe two different people, but same thing,
different day. Yes, yes, definitely.
I'm sorry to interrupt. And I hope that this conversation is providing you with
great information and support for financial strategies with your foster and kinship
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this interview and others just like it and continue learning with us. Can you tell
us a little bit about the financial supports that may be available but are
underutilized for both foster and kinship families? Things like foster care allowances
or clothing stipends, Medicaid, any of those things that you can tell us about that
would maybe be a difference maker for families that they don't know about or aren't
using. Yeah. One of the biggest gaps I see is not just what's unavailable in terms
of resources, but more what's underutilized. So there are supports out there that
foster and kinship families either don't know about or they don't have the bandwidth
to apply for the time bandwidth or the emotional bandwidth.
So one -time subsidies, I think, are a huge one that go underutilized.
So some states offer, you know, moving in allowance when the child first comes into
care that could provide things like furniture or a new bed. There's the back -to
-school and clothing allowances for some states. I know at times I wasn't aware of
these. And so you really have to be on top of asking your caseworker. And then
there's also, I know in Arizona, it's called a provider indemnity program. So it
covers things like damage to foster parents or third parties property when there's
damage caused by a child in foster care. So it's kind of those one -time things I
think a lot of times go and then non -profit support. So a lot of nonprofits will
provide extracurricular activities support. In Arizona, it's Friends of Foster Children
Foundation. They'll cover things like swim, gymnastics, basketball, all those
extracurricular activities. And then you have things like the temporary assistance for
needy families and for kinship caregivers. even if you're unlicensed, you can often
qualify for those cash assistance. And then the kinship navigator program is one,
I believe, is also very underutilized. So let's talk about the kinship navigator
program. Can you kind of give us a brief overview? I understand they vary state by
state, but kind of a brief overview of what they are, what they were designed to
accomplish, and how kinship families in particular can find them, whether they're part
of the foster system or they're doing informal kinship care. How do they find a
kinship navigator program? Yeah, I think kinship navigator programs are like the GPS
for families who step in to raise kids when the parents can't. They can help you
figure out resources you may not even know exist like financial support,
child care, legal legal help, in some cases, school enrollment,
or even just emotional support. So you'll usually find them run through your state's
child welfare agency, local nonprofits, or sometimes even universities, but again,
state -specific. So you'll have to look through your specific state resources. So
going to your state's website and just typing kinship Navigator would be the first
step for that. Yeah.
So let's talk about some of the tax strategies that are available to families who
are doing foster care or caring for kinship children, relative children, that they
may be eligible for, but they may not know about. Yes, love taxes. So there's both
five different ones, not specific to foster or kin,
but often because of the rules, they will apply to a foster parent or a kinship
parent. And so these rules are typically the child has to be living with you for
more than half of the year. And you have to be providing more than half of their
financial support. And the third rule is they have to be a U .S. citizen,
national or resident alien. But for all five of these, if you meet those kind of
three criteria, you should be able to take advantage of these different child tax
credits. For informal kinship works, you know, if your child is your son,
daughter, grandchild, sibling, half sibling, you know, kind of any descendant of
these. For the child tax credits, pretty big benefit. It could be up to $2 ,000.
you just need that valid social security number, child has to be under 17. So
that's a great benefit to take advantage of. We also have the credit for other
dependents, which can be about $500 maxes out. And so if a child doesn't qualify
for the child tax credit either because they're older or have no social security
number, this one can be one you can access as well. And And the third one is
child independent care credit. So this is if you're paying for child care, any type
of after school program, a babysitter, while you're going to work or while you're
looking for work. The IRS will pay for a percentage of these costs.
It'll help you gain back some of those expenses that you incurred. And then there
is the earned income tax credit. And this is for lower moderate income earners.
And this can be stacked with the child tax credit. So it can be very nice. And
this you can get if the child is under 19 or under 24 and going to school as a
full -time student. And then the last one is filing for head of household.
So this is, you know, instead of filing single, you can file a head of household
if you supply, you know, 50 % of the cost of your home. And this puts you in a
better tax bracket, so it's better deductions and you pay less in taxes. So these
are all great incentives to take advantage of. Thank you for explaining each of
those so well. It's taxes is a tough topic for a lot of people, and I appreciate
the breakdown of each of those. Let's bring it down to the kitchen table for these
families and talk about how they can work on a small financial buffer for their
family. We know that raising kids also means inevitable emergencies and crises,
falls down and breaks an arm, has a scooter accident, whatever, the financial buffer
that's needed to navigate those kinds of emergencies. Yeah. So I tell caregivers to
set up what I call care pools. Think of them as just small little saving buckets
just for those inevitable type of emergencies that you just listed that come with
raising kids. And I think to be honest, the emergencies always come.
There's a pair of glasses, breaks. The car needs a repair. Late night urgent care
visits. They're all part of it. They're not rare.
They are guaranteed. So we like to say they're
But just estimate what those types of costs may run you annually and then divide by
12. And that gives you kind of the monthly amount that you want to just say little
by little. Because again, when it comes up unexpected, that's when it shocks our
nervous system and we fill the stress. But if we plan for it, it's a little less
stressful. And then you automate it. It's kind of step three. If you can set up an
automatic transfer, so the money builds without you having to even think about it.
And so you're prepped for when those so -called unexpected emergencies happen.
That's a great idea in general for any family, but specifically for these foster and
kinship families where money can be very tight and it can feel like you don't know
what's coming in and even worse, you don't know what's going out. And it helps you
track all of that more intentionally. Exactly. What kind of advice would you give to
foster or kinship caregivers, again, when money is tight around savings or flexibility
to save and spend? Yeah, similar to the care pool, right? You should have other
pools of money for different savings goals. Maybe it's not an emergency,
but it's a vacation. It's a birthday party that are, again, going to shock your
financial system once they come up. But I kind of recommend if it's something that's
going to happen within like one to two, three years, you get a high yield savings
account. And what this is is just a regular savings account that's online,
and you're going to earn a lot higher interest. And it's going to outpace inflation
so your money's not losing money while it's in a traditional savings account. And
it's really going to help you with meeting some of those care pool goals.
Do they need a minimum amount to start a high yield savings account? Can they just
start it with a $25 deposit? Yes, most of them do not require a minimum,
and you can even just start it, and you don't have to put anything in originally.
Great. So that's a good option. And then one thing I also recommend around savings
for foster care and kinship, and you mentioned flexibility. And I think the reason
why people avoid this is they don't think it's flexible. But it is a 529 account.
If you're not familiar with it, it is a savings account designated for college or a
trade school and it offers tax savings. And I think a lot of folks avoid it
because we don't know what's going to happen to a child in our care. The future is
unknown. But I do think this account is actually very flexible and it's a great
benefit for these kids because kids in foster care, the rate of going to pursuing
education outside of high school is about three to four percent. And so when I
first thought about opening up a 529, it's like, well, you know, I don't even know
if this kid is going to stay in my care. And I don't know if, you know, they
just put some ice in their mouth at a dog touch. So are they even going to
college? Who knows what their wants are going to be out in the future? But the
reason why I say 529 is flexible is you can transfer it. So maybe you want to go
back to school. You can always change the name from a child in your care to your
name in the future. Let's say that kid doesn't end up going to school or is not
college bound or trade school bound. You can transfer it to a retirement account as
well. And so there's a lot of flexibility with this account, even if the child
doesn't stay in your care. And I think it's a great benefit to provide a child in
foster care, kinship care, and it's what I recommend. That's great information. I
actually was not aware of the flexibility of a 529. So that's really good to know.
I mean, I'm an adoptive family, but that's good information to know because I don't
know if all my kids are going to go to college. Thank you. I appreciate that.
Let's talk about some simple budgeting or expense tracking strategies that will help
foster and kinship families get a handle on their finances and start to implement
some of these strategies that you've already discussed. Yeah. So if you're foster a
kinship parent, you're constrained for time, right? One of the simplest strategies I
share, especially for this demographic or strap for time, is what I call a three
bucket budget. And it's quick, it's simple, and it works.
Nobody knows how much and they kind of don't know when it's going to happen. Bucket
three is what we sometimes call again emergencies, but they're inevitable expenses,
things you know will happen, getting your oil changed, your tires,
repairs, the birthdays, the back -to -school shopping. You know, kind of add what
those costs are up in a year. Again, divide by 12 and save that amount monthly.
So this can feel predictable to your finances. And then here's how it works in
practice, right? You're going to take your income, your paycheck, whatever it is you
bring in and you're just going to subtract bucket one and bucket three, your fixed
bills and your inevitable expenses. And then whatever is left is your bucket two.
It's your day -to -day spending. Now, again, we said we're strapped for time and
resources. So we don't want to be tracking every single dollar. We don't want 20
categories of a budget. We just need to plan for that bucket of the day to day.
And, you know, kind of budget this out by paycheck. What am I going to do with
this money for this paycheck? So it's not fancy, but it's definitely doable. And
that's what kind of matters when you're strapped for time and energy. Yeah, that
simplified streamlined perspective can can just take a lot of weight off of the
shoulders of foster parents and kinship caregivers. It can also alleviate some of the
stress that comes in the conversations that you have to have with your partner or
with your spouse because money, again, depending on your family of origin or your
partner's family of origin, money can be a really tough topic to talk about and
kind of simplifying it down to these three priorities can, I would imagine,
alleviate so much stress and so much of the unspoken things that happen around the
way we think and feel about money. Yeah, definitely. I think it's a useful tool.
So what are some low -cost ways for foster parents or grandparents raising grandkids
to meet the kids' needs, like sneakers, you know, junior hires are all about the
brand names, that kind of thing, but still preserve both their dignity,
because it can be very humbling to not be able to provide what your kids want,
even if you're able to provide what they need, but also preserving the kids'
dignity. Yeah. I think one of the biggest worries for foster parents and grandparents
raising grandkids is, you know, how do I stretch those dollars out making the kids
feel less than and dignity can matter as much as dollars. But low cost,
I don't think has to necessarily mean low quality. Facebook marketplace can be a
good resource where folks are maybe like me or their kids in the 99 % tone and
they're just rotating through these things and they're named, they can be named brand
and the kids just grow out of them and so they're in decent quality. Community
swaps and buy nothing groups are great resources where the kids are able to kind of
pick out their clothes and has more of a shopping feel to it than,
you know, hand me down that they're just given. Second hand is another option in
terms of goodwill is a huge option that we utilize a lot and often find clothes
with the original price tag. And so that gives, again, dignity and some personal
style to being able to pick out their clothes. Again, every state's different, but
the Foster Alliance in Arizona, where I live, has brand new clothes. So that's going
to be great for preserving that dignity. I also advocate strongly for community
resources being framed as an opportunity. There's a lot of stigma around some of
these places. And I know from firsthand, you know, my parents lived off of a lot
of government resources early on in their life. And they got their very first job
interview with suits from Goodwill. And they were like, I'll be damned if you use
goodwill because we worked so hard so that you didn't have to. And so when I my
foster placement started shopping, I go, well, my mom was like, what? You don't have
to do that. You have the resources. But it's reframing it that, yes,
I'm going to use these resources because it frees up my money for more enrichment
activities, making memories. And so, you know, this is a reframe that I think needs
to happen. It's not about not having the resources for the clothes, but it but it
frees up more money for different things. Yeah, it helps you be in control of your
priorities. Exactly. I think another resource that could be accessed would be
partnering with another family, maybe whose kids are a little older than yours or
family with kids a little younger than yours and doing some clothing swaps with
them. A lot of times, especially junior high and younger, kids don't mind hand me
down.
in those ways, it's not just about the actual goods that are swapped. It's also
about the sense of community and belonging and your kids seeing that there are other
families like yours out there and that we're all in this together. Definitely.
Thank you for pointing that. I definitely remember having a cousin I had admired
that I'd rather have their clothes from. So yes, that's also a great resource. So
speaking of community resources and building that sense of community, what are some
other kind of community level initiatives or organizations that you are aware of that
will support foster families or kinship families? Yeah, I think another option is,
you know, community closets and food banks that are child -centered. Again, every
state is different, but Hallad's Hope chest in Arizona. You know, they don't just
hand out items. They create kind of a boutique style experience where kids can pick
through the list of items that they need. And that shifts kind of,
again, the presentation preserves the dignity and makes it feel like shopping and not
charity. And finally, like shared services that give caregivers breathing room,
some local nonprofits and churches, organize meal trains and tutoring help and,
you know, respite or babysitting. So those may not show up on a financial
spreadsheet, but they're priceless in terms of preserving both caregiver well -being
and the kid's stability as well. Yeah. And when you're giving kids the opportunity
to have a voice or a choice in what t -shirt they're wearing to school and where
that t -shirt comes from, it's communicating to the kids that they matter and you
see them and you see that this could be a hard thing for them, but it's also an
opportunity for them to express their feelings about it and kind of express their
identity as they're doing it. One of the things that's real important is access to
websites that you can kind of dig through to find organizations like these. So if
you have a church in your area that is known for its food bank, check the website
and see what else they might offer. And if you do take advantage of the food bank,
talk to one of the organizers of the food bank and ask them what other resources
in the community they're aware of because a lot of these organizations like faith
-based organizations or community -focused organizations, they network with each other,
and they're well aware of what other resources families need and where families can
go to get them. So start with the websites and then move from the websites to the
face -to -face conversations, if you can, with the organizers of those organizations
and resources. Yeah, it's great advice. One more interruption,
if I may, I'd like to tell you about our library of free courses. Thanks to our
partners at the Jockey Being Family Foundation, we are able to bring you 15 courses
for free. They are online. They offer a certificate of completion at the end if you
need that for continuing education. And you can go to Bitley -J -B -F support.
That's B -I -T -L -Y -S -JB.
caregivers decide which financial strategies they need to devote their time and energy
to focusing on first when they first get a new placement or when they are welcoming
a grandchild into their home kind of on a spur of the moment it's not necessarily
something they plan for where where do they start that's a great question where do
i even start there's so many financial fires to put out The key is to focus on
what's going to give you the most stability and peace of mind first. And that could
be different for many people. I think, again, finding resources is really going to
help with just helping you feel supported. And there's a lot of gratitude that comes
with feeling supported in the community. And it's going to shave off a lot of
expenses for you when you find those resources. But beyond that, it's covering
emergencies, right? Building those small buffers so that these incidents and
emergencies when they happen don't derail everything for you. And then I think the
second one is securing the essentials, making sure your rent, food, transportation,
child care, that's all budgeted for because, you know, what we're doing is creating
stability for these children. And so we need to make sure that those essentials are
covered. And then it's tackling, you know, debt or savings next. Once the basics are
stable, you know, start paying down those high interest debts or saving towards a
next priority goal like school shopping or long -term, you know, savings. The point
is you don't have to do it all at once. Focus on what keeps, you know, the roof
over your head and reduces stress today is going to be the most important for your
family. When you feel more stable, you can focus on the future of building toward
the tomorrow. That's great advice starting today,
focus on what you can manage and handle today. I heard a kinship provider actually
just last night was talking about at the beginning, all she could do was think
about the next meal that had to go on the table and the next diaper that had to
be changed. And after about two or three weeks of getting her feet on the ground
with those basics, then she was able to say, okay, what financial resources do I
need? Where's the gaps? And she could sit down and kind of plan for the next three
months. And then she could plan for the next six months. And she just kept making
herself hold back a little bit and just do what she could do right now and tackle
when she felt more grounded and more settled and she could tell that the child was
feeling more grounded and more settled because that's an important dynamic to remember
also if you're all about the business of handling the emergent right now and you're
thinking about how do I handle groceries and bedding and the electricity today,
you also have to be thinking about how the kid is feeling about all of that and
handling all of that. Absolutely. What are some of the small kind of early wins
that would build a caregiver's confidence that would make them feel like,
okay, I do have a handle on things, and I can start thinking and planning for
three months down the road or six months down the road? What were those small wins
usually? Yeah, I'll give a couple that are more maybe like traditional finance of
some others that maybe folks might not think about. But the high -yield savings
account, I often see with my clients, it's just a 10 -minute exercise to open it
up, sometimes even shorter than that. And they see the interest that they gain,
you know, hundreds of dollars in some cases. and it's like this quick like
adrenaline rush like oh this is awesome what more can i do to jump start my
finances so that's a quick win like i said 10 minutes builds confidence the other
one is mapping out your money you know writing down your liabilities what you owe
writing down your assets sorry you're writing down your assets what you own and
writing down your liabilities what you know, your interest rates, your passwords, your
account logins. I call it a money map. It's mapping everything out, all the details
of your finances. And what I often hear with clients when I have them do this
exercise is I feel like an adult. And sometimes we need to feel like an adult,
right? So that's a quick one. And then the one that's not traditional finance is
gratitude. It shifts the focus of what I'm missing.
I don't have this. I don't have this to what you do have. And that's going to
lower the stress hormone cortisol in foster care environment. It's going to feel like
the deck is stacked against you. And it will quite literally shift that focus from
the negative to the positive. And it's going to improve your financial decisions.
Because scarcity, when we operate from that place, it's going to do one or two
things. You're either going to start hoarding money, which isn't great either, or
you're going to start spending as retail therapy, if you will. So gratitude is going
to allow you to be intentional and recognize progress in your finances,
which then snowballs to more progress and more progress. And so it's going to
strengthen at caregiver resilience. And so many people feel, right, that stipend isn't
enough. And it's not, but it's a resource that gives us more capacity to do what
so many of us would do for free. And so gratitude turns that financial care from
being a chore to part of the mission of caregiving. So you mentioned the scarcity
mindset and how it can create conditions where you're very reactive. What are some
of the signs of a scarcity mindset that we should be maybe thinking about or trying
to identify in ourselves? I think one of the signs of scarcity mindset that I
frequently see is hoarding. We're hoarding money. We're building up savings accounts
with no actual designation on where it's going to go or we're just thinking that
and like I said it could shift the other way where we're spending beyond what we
should because we're using it as retail therapy other signs are in your body right
it's your chest tightening every time you walk into a store because you're feeling
like oh my guy I don't have enough and a lot of these feelings of scarcity are in
your day -to -day behaviors, checking your balances obsessively, feeling panic or guilt
every time you spend, even though it might be a need for the child. These are some
of the most frequent ones that I see regarding scarcity. I think scarcity mindset
also could include the self -talk, telling yourself, I don't have the money to do
this, or I'm never going to dig out of this hole. And then when we are saying
that to ourselves frequently, whether we actually ever say it out loud or not, the
kids pick up on that. And the last thing we want is for our kids, whom we've
taken in under this crisis situation, to develop their own scarcity mindset. And so
self -talk is a really important thing to think about when you're struggling with
scarcity mindset. Yeah, like you said, Tracy, it doesn't always go to self -talk,
right? It's going to come outwardly. And what I have to be very mindful of is I
don't say, oh, I don't have the money for that. We don't have the money for that.
We don't. That's not in our budget. What I try to say is it's not our top
priority because you don't want to keep telling children like you don't have the
money for that it creates that scarcity mindset or you know we can't get that for
you it starts to feel like why am I not worthy why can't I have this versus just
saying it's not the top priority because even if we're a millionaire there's still
going to be things that we want that we can't have because you know we can tend
to get greedy when we start thinking about winning the power powerball and all these
things, right? So there will always come a time where we, you know, can't buy that
thing, but it's not because we don't have enough. It's just we don't. Right now,
it's not in our top priority. So you really have to be conscious of the words that
you use around these kids because you don't want to proliferate scarcity mindset with
them. Yeah, that's a really good tip. So can you give me some practical financial
strategies that you would want every foster parent or kinship caregiver to walk away
from after listening to today's conversation. Yeah. I've shared a lot of strategies
today. Hopefully everyone's still keeping it together. We talked about building care
pools, you know, accessing resources, taxes, My budgets, right?
But I want to leave you with some fresh ones because all of those are very
important, but let's keep it a little bit fresher. First, talk about money with your
kids. Talk about with your friends if you need some practice first, because nobody
talks about money with their friends either, and we should. But break the silence
and shame that so many of us grew up with. For little ones, maybe it's, you know,
three piggy banks. We've got one for savings. We've got one for giving. We've got
one for spending. For older kids, let them plan a budget themselves,
right? You get that back to school stipend. Let them plan how they're going to
spend it. Or talk about saving for a trip at the dinner table with your kids
there. That conversation plants seeds for a new financial future for these children.
Poverty is a huge reason why children end up in care, and we need to start
planting these seeds so that they hear positive conversations at the dinner table
around money. Even if you got to go fight in the room and hash it out,
when you get to the dinner table, make it a good conversation about money. The
second is budget for joy. We have a budget for court dates because every single one
I go to, I need some joy in my life, right? Family team meetings, reviews,
those can be some of the toughest days for us. And we want the kids not to see
that. So set some money aside for grabbing ice cream or, you know, a fun little
ritual that says, yes, today was hard, but joy still belongs here in our family.
That's not extra. That's part of our healing. The third, give kids a chance to
practice, right? I mentioned a little bit, like hand them a small allowance or a
set budget for something like back to school shopping. My foster son wanted to do
it yesterday, and I was terrified. So I'm like, I got to go to the store and say
yes to everything. And then I'm like, wait, let's give him a little budget. And I
was actually blown away about his abilities to pick and choose what worked for him.
And, you know, it's a learning experience. You might, they might teach you out of
budget, right? So kids in foster or kinship care don't get a lot of choices in
their life. This gives them both the dignity and experience with money. So those
would be my three fresh ones to add. I love that. I would add, learn how to talk
about money as a tool that is getting you what you need and then getting you what
you want, because when you talk about it as a tool, we don't talk about a hammer
as positive or negative. We don't have a ton of stigmas associated with hammers,
but we do with money. And so if we can learn how to talk about money as a tool
that helps us construct the life that we need and want,
I think it gives our kids a great foundation to then fight off the stigmas of
scarcity mentality and the poverty mindset in addition to all of those tips that you
listed. Yeah. And Tracy, I want to call this out because needs and wants is very
big in the financial word, like separate your needs from your wants. And I do love
it. But as I entered this space of being a foster parent, I've been careful.
budget or whatever. So again, I like to go back to those just priorities, like
listing things as priorities because our wants are important as well too.
And I want these kids to believe that they can get their wants at some point as
well. Yeah. And just learning how to put those in proper priority to work for them.
Yeah, definitely. I like that. That's great. So as we're wrapping up here at the
end of this conversation, I would love for you to speak directly to a foster care
parent or a kinship caregiver who is feeling overwhelmed by their finances right now,
who's feeling maybe a little hopeless or stressed by the financial pressures that
they're feeling. Give us just some kind of bit of hopeful encouragement that will
give them the boost to keep on going. I think to every caregiver experiencing
financial pressure, I see you. You're carrying so much and money feels just like
another impossible weight to add on to everything you're going through.
I think the truth is that finance work is not separate from your caregiving.
It is part of it. Every step you take towards your financial goals or your
financial well -being is self -care for yourself and your family.
And it plants seeds that can break literal cycles of poverty in these children and
change their family trees when you talk about money in a healthy way, which you're
able to do by working on your financial self -care. The work, it starts with you,
but it does not end with you. It creates ripples of stability, hope, and legacy.
And I want to encourage you to continue to work on your financial self -care.
Wow, Nicole, that was beautiful. Thank you so much. I appreciate you spending time
with us today. I appreciate the practical advice that you offered. You can find
Nicole at Fostering Finances on Instagram and we'll link some of the important
resources in the show notes for you. So thanks Nicole for joining us and thanks
listeners for joining us as well. Thanks, Tracy. I do also have a website,
fosteringfinance .com. You can find me on as well. Great, thank you for sharing that.