Are you ready for a number that will blow your mind?
The average cost of in-state college fees is less than what it costs to pay for a year of child care.
So, if you think the prices for child care are out of this world, you’re not crazy—you’re right! And you’re not alone. People are trying to figure out how to pay for day care more and more.
According to a population study by the Bureau of Labor Statistics for 2021, both parents work in 62% of homes with married parents and children.2 So there is a big need for child care. If your family uses day care, let’s look at why it costs so much and what you can do to make it work for you.
How Much Is DayCare Cost?
A study by Care.com found that the average cost of day care in the United States is $9,589 per year, while the average cost of in-home care (like a babysitter) is $28,354 per year.3 Yikes! The price for this changes from state to state, so you could pay a lot less or a lot more.
Some of you might spend more on childcare than you do on rent or a mortgage. Guys, that’s a lot. And if you only have one income and are trying to figure out how to pay for child care, you may be feeling the pinch. But why does child care cost so much to begin with?
How to Know if Day Care Is Right for Your Family
Listen, there is no one way to take care of kids and work at the same time. So, instead of trying to keep up with the Joneses, I want you to do what’s best for your family. If it makes more sense for one parent to stay home with the kids instead of going to work, do that for now. And if you and your partner have to work, but the kids’ grandparents are willing to watch them, that’s fine too. So, how do you know if day care is a good choice?
If the total cost of day care is less than what you make, it might be a good choice for your family. Traditional daycares give kids a chance to meet new people, play, learn new things, and try out being on their own while you work. And nannies or in-home care can add a more personal touch with a plan that fits your needs. In either case, you can feel good knowing that your kids are safe and having fun while you work.
If your family has trouble with money or time, day care might not be a good choice. For example, a full-time, live-in babysitter might be more convenient for your family, but if all you can afford is an after-school program, you’ll have to make do with that instead.
Also think about how the daycare hours fit with your work hours. If you work on the weekends, you may need to find a nanny who can be flexible. But keep in mind that if the cost of babysitting is more than you can afford, you’ll need to find another option or look for ways to save money (without sacrificing your kids’ safety or care).
This could mean getting a new job that pays more, signing up for free or low-cost child care, or asking people you know for help. When you pay for child care, I don’t want you to go into debt or lose money.
Top 9 Ways to Child Care on a Budget
If you’ve chosen that paying for childcare is best for your family, but you still want to save money, I have some ideas. Try to keep an open mind, because some of these ideas may only work if you change your plan or how you do things with your family.
1. Work from home one day a week or choose a plan with part-time child care.
Some day cares charge by the day rather than by the week. You could save a lot of money if you could work from home once a week while also taking care of your kids.
2. Consider being a stay-at-home parent.
If you have two incomes but can’t afford day care, you could become a stay-at-home parent. And keep in mind that this isn’t just for moms. In fact, about 1.75 million stay-at-home dads live in the United States today.4
3. Ask family members to help.
If you have family nearby who is ready to help, take them up on their offer. The extra valuable time and cuddles would probably make the grandparents very happy. You also get the peace of mind of knowing that your child is well cared for by people who love them.
4. Put a few years between your kids so you only have to pay for childcare for one at a time.
No, you don’t have full power over this. But if you’re just starting to think about having kids, it might make sense to try to space them out a few years so you only have to pay for childcare for one at a time (while the other is in school).
5. Look for summer day care or grants.
If you only need cheap child care during the summer, the YMCA or other community groups might offer summer camps. You can also call the day care center you’re interested in and ask if they have any loans or scholarships available. It’s never a bad idea to ask!
6. Talk to your boss about changing the hours you work.
If you and your partner both want to focus on your jobs but don’t want to send your child to day care, getting creative with your work schedules could be a great option. Mom might be a teacher, and she might work from 6 a.m. to 3 p.m. Dad might be able to work from 4 p.m. to midnight if he is a police officer and can choose his shift. This might not work for your family, especially in the long run, but if your work plan is flexible, it’s a great short-term solution.
7. Consider a Dependent Care Flexible Spending Account (DCFSA).
A DCFSA is a tax-free benefit that parents can use to pay for day care, daycare, and summer day camps for their children.5 What are you waiting for if you can get this kind of tax-advantaged account? Go put some money aside. Just keep in mind that, like a regular FSA, you must use the money you put into a DCFSA during the plan year. (If you don’t use it, you lose it. Yikes!)
8. See if you qualify for the Child and Dependent Care Credit.
If you have a qualifying child under 13 years old and pay for childcare so you can work or find work, you might be qualified for this tax credit. If you want to know more about this, you should talk to a trusted tax expert.
9. Open your own daycare at home.
If you stay home to care for your child, why not start a side business and help other families who also need good in-home care? You can spend time with your child and make extra money at the same time. Not bad at all!
If you’re still looking for methods to save money on day care, here are a few more: Prices for day care depend on how old your child is. So, even though you’re looking for ways to save money on childcare for your baby right now, those costs will probably go down when they’re a toddler.
Also, if you have more than one child, some day cares will give you a deal. You should also check with your (or your partner’s) place of work to see if they offer any discounts for day cares near the office.
How to Plan for Child Care on a Budget
So, the main question is: Can you save money on childcare? You should try it! At the end of the day, keep in mind that you won’t always have to pay high day care prices. This is just a time of year, and it will end shortly. Your kids will be in school before you know it (cue all the tears!). When you don’t have to pay for childcare each month, you might even feel like you got a raise.
Check out the EveryDollar program if you want to learn how to budget better at every stage of your life. You can try it out for free and tell your money exactly where to go, including setting up a budget for childcare. See for yourself today!
