How do I find out my ancestral nationality?

Question:

How do I find out my ancestral nationality?

I was adopted when I was younger and don't know my birth parents. I do speak to my grandmother and she's German but she said my grandfather was a couple of nationalities. I'm have no idea what my father is because his last name is Smith and that can come from a few backgrounds. So how could I find out without it costing a fortune to get ahold of records. It's hard with being adopted because I don't have a lot to go on.

Best Answer - Chosen by Asker: From the perspective of many adopted persons who start their search here... you have already what most don't, ie contact with a grandparent. In fact, many can't get that far, even by paying a fortune. So, count that as a blessing that you already have.
From there... you work exactly as usual, by dividing the elephant into bite size pieces. Meaning... one step at a time. Starting with any one of them... you use the name and VERIFIED FACTS, ie date of birth/ death and locality. From your wording, sounds as if grandpa is deceased, thus I would expect to locate him in the social security death index (it's at rootsweb.com). Death certificate is maybe less than $20, and grandma may already have it. Names of his parents should be on there. Find them in the social security death index (if they did die since about 1960). Now, you look to find death records on them, which can mean not just their certificate, but cemetery record, obituaries, maybe they were alive prior to 1930, meaning they should be in the 1930 census.
What I am trying to explain is that many records out there are free and online. MANY is the operative word here. Not all, but the further back you get, the bettter off you are... historical records are more "accessible" than recent ones.
Since you talk with Grandma... what you need her to share is not nationality, but details- her parents, grandparents etc, along with as many specifics as possible. Again.. each step, learn the sources for original sources to document those items. THE DOCUMENTATION IS WHAT YOU BUILD ON.
As for Smith being a common name, yes, it is. Again.. the one thing that often overwhelms a beginning researcher is thinking in terms of surnames or nationalities. What you want are details, and use those in a methodical way to find exactly who his parents were, their dates, where they were (or are). It focuses on what you want to find. You don't NEED all the Smiths.. you need a direct record of your Smith grandparents, then build from that. When you get to the point where you know which exact Smith ancestor was the "immigrant", then you can determine the location where he came from.
You might want to visit www.rootsweb.com, not just to see the social security index (under searches) but on the front page, you'll find a guide for beginning research.
No hobby that I know of, is absolutely free. The trick is to find how to locate exact records online, and spend what you need to, wisely.